What is an Amazon Repricing Tool - The Definitive Guide of how they Shape Product Pricing and Sales Volumes on Amazon!
Published by Julian
What is an Amazon Repricing Tool - The Background and Basics
Although some buyers may not realize it, when you buy something from Amazon very rarely are you buying from Amazon directly. Amazon is know as a marketplace and most listings being sold are actually third party sellers who have been given permission to sell on the platform, although Amazon do sell there themselves too. The retailers apart from Amazon are a bit like market sellers in a fruit and veg market, you may say you buy your fruit and veg from X market but in reality you are buying your fruit from X seller or X sellers at X market.
On a huge marketplace like Amazon, buyers can find multiple sellers for almost any product. Shoppers compare different products as they compare features, specifications, reviews and prices before making a final decision on which product to buy. As a buyer you will notice that after you choose your product and look at the product page, you see an 'Ad to Basket' button, followed by a price and this is known as the Buy Box and in Amazon Selling circles this is highly prized!
If you look at the listing more carefully you will also notice more prices on the listing, usually under links 'New' and 'Used' (Sometimes 'Refurbished' too depending on the listing). Each of these includes more sellers selling the same product on the very same listing. If you click on these links you are shown a list of these sellers in ascending order by price, you can also see the feedback score of each seller too (The feedback score is based on customer feedback on previous purchases and makes up an additional part of sellers metrics – more on this later).
It's important to understand that the seller who occupies the buy box, is usually (not always) the cheapest and as most buyers don't usually check (approx 70%) the 'New', 'Used' and 'Refurbished' lists that therefore most sales are made from the Buy Box even though it is not guaranteed to be the cheapest and all sellers are selling exactly the same thing. Hence the reason the Buy Box is so sought after! So the question is how do Amazon sellers get the buy box and stay there and how does Amazon Repricing Software secure this?
It is vital to remember that as a seller you can sell your items in two different ways on the Amazon platform when you 'Ad a Product to Amazon' for sale in the back end of Seller Central (The Selling Control Panel for Amazon Sellers):
1: The first option is the Amazon default choice and is where you find the product already listed and sold on Amazon by another seller and then sell your product within the already created listing as either 'New', 'Used' or 'Refurbished'. If the product you want to sell is already for sale on Amazon you need to choose this option as per Amazon's policies. Once you get your offer on an already created listing, the next step is to secure that buy box where most sales are generated.
2: The second option is to create a brand new listing for your item; strictly speaking this should only be done if there are no other listings on the marketplace for the same product and should only be used when you have a unique self branded product. If the product you are selling already has a listing created on the marketplace and you create a new listing instead of listing within the already previously created listing you are breaking Amazon's TOS. *If you are selling self branded products, you have no competition in the 'New', 'Used' and 'Refurbished' lists therefore you would not use Repricing Tools as such.
Amazon Repricing is concerned with (Option 1), where you are competing with Sellers on the same listing.
Getting the Amazon Buy Box
Getting the Buy Box is the essential step to success with an Amazon business and as Sellers know that having the lowest price is a fundamental factor (not the only factor) in getting the buy box, sellers usually start by manually logging into Amazon Seller Central and lowering selling prices one by one dependant on competitors current pricing until they finally reside in the buy box.
The problem with this is that they later find at a random time a competitor then lowers their prices too and they lose the Buy Box again, the Seller then reacts by lowering their prices again, followed by the competitor too. This constant monitoring, changing pricing, waiting for Amazon to update (which can take 5-45 minutes), waiting for competitors to change their pricing, is not only time consuming but also results in a race to the bottom (lowest price), until the product becomes unprofitable. Sellers who adopt this strategy find it is a full time job if you have 100 or even a 10 listings and ultimately their lines start losing them money.
Amazon Repricing & Seller Republic
This is where Automated Repricing comes in and Amazon Repricing Tools like Seller Republic. An automated system which monitors not just one listing but all your listings, works far more efficiently and is far more cost effective than any employee could possibly be. With 100% accuracy Repricing Tools makes sure you don't lose money, they change prices instantly when it needs to and even takes into account more than just the price so you get the buy box without losing all your profit. These additional factors are known as metrics and are part of a backend Amazon algorithm which among others takes into account your feedback score, fulfillment type, support response time and delivery time. Combining these factors along with your price allows a more accurate higher selling price to be calculated that still gets you the buy box and gets you out of the race to the bottom pricing game. Repricers are intelligent too, they don't just reprice down, they reprice up too, they check your margins and can be set to ensure you never go out of profit; fundamentally they work to not just increase your sales, but most importantly your profits!
Services like this from Seller Republic are paid for services, but if you think of it like this regardless of how much extra money Seller Republic can make you through speed, intelligence and effectiveness, how much is your time worth? Do you expect $10 an hour, $20 an hour, $100? Well Seller Republic costs approx $20 a month (depending on your package), so if you are currently spending 1 or 100 hours a month on changing your prices, this is a no brainer (Most Sellers spend about 40 hours a month when repricing manually). Seller Republic is contract free, has full usability, can be set up in minutes and is considered the easiest way to increase your profits right now. The Seller Republic system connects straight to your Amazon account and prices start at less than $10 per month.