Amazon pricing

Simple tips to price your Amazon products

Consider your total cost

First and foremost, analyze and calculate the total cost of the product

For a manufacturer, the following costs will be involved

  • Raw material cost
  • Overheads
  • Tax

For a retailer, the following costs will be involved

  • Cost price
  • Tax

Once you have calculated the total cost of the product, define the profit margin for the product. The selling price can usually fluctuate (+ or -) depending on some of the factors that will be discussed henceforth on this blog.

Analyze your competition

 When you are selling on Amazon, you are one among plenty of other sellers and there will be at least more than 10 sellers who are into the same/ similar product segment as you are.

Which means, buyers have multiple choices to go with. To stay ahead of the competition, it is important to price your products accordingly.

Let’s say, you have somewhere around 10 competitors. It is vital to consider all of them, determine their pricing trends and then go forward with pricing your products.

Chances of winning the sales are high if you are in line with the market trends. In simple words, price it just like the other players in the market with a maximum 10% of the variation, low or high as preferable.

Never price it too low or high

 Some of the sellers assume that lower product pricing can help them stay ahead of the competition. Yes, it certainly helps to attract sales. But there are two other things you need to make sure

  • If that could cope up with your cost price/manufacturing cost + overheads
  • Some buyers assume that lower product price equals lower quality, and they may not consider purchasing from you

On the contrary, pricing your products too high can also bring down the volume of sales. Therefore, it is best to be a moderately priced player in the market.

Consider flexible pricing

 If you had analyzed the pricing trends of Amazon sellers who are successful, you would have noticed that they don’t price the products at a constant value. Instead,  they adopt flexible pricing strategy. They do so, in order to stay ahead of the competition and achieve more sales.

Drilling down, this is how the flexible pricing (named as Auto pricing on Amazon) works

  • Product pricing fluctuates with reference to the buy box price
  • Product pricing fluctuates with reference to the lowest price

Product pricing fluctuates with reference to the best price.

Being profitable on Amazon

It is pretty simple for private label products

 If you are a private label seller, then pricing the products is comparatively simple. What you have to do is, calculate your total costs, fix a profit margin and define the selling price.

As a private label seller, you escape a lot of competition and can have more control over defining the selling price for the products.

Final thoughts

 Having a great product with the best pricing is not the only necessity to win sales. Not even a single buyer goes for a product that has negative feedback and reviews. An exclusive one-stop solution: Insight Mailer can help you handle negative feedback and reviews, as well as achieve good seller reputation with increased positive feedback and reviews.

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