The Amazon Pricing Strategy That Will Destroy the Competition

The Amazon Pricing Strategy That Will Destroy the Competition

Wrong pricing, fake reviews, or simply poor customer service can end your Amazon adventure sooner than you imagine.

For many, this makes Amazon complex, but your pricing strategy for Amazon should be simple and be based on the needs of the consumer in mind.

Pro tip: check out SellerApp’s Amazon price trackers blog to find out the best Amazon price trackers.

You aim to make the most sales you can Get authentic product reviews, and provide your customers with the highest level of service for customers on Amazon customers.

Before begin, always remember your ultimate goal:

You’ll want to establish a long-term reputation on Amazon that will lead to Amazon advertising your product on your product’s details page.

If you go to the “Customers who bought this item also bought” section, Amazon will automatically promote all of your other items.

3 Steps to Selling Successfully on Amazon

1. Optimize your product detail page.

The basic features aren’t excellent.

Before you can even begin contemplating how to generate traffic, put your marketing budget into action, or improve your Amazon pricing strategies, you must get the basics right.

On Amazon, this means that you must improve your Amazon product detail page to take advantage of the organic results of Amazon’s search engine.

Therefore, it’s best to optimize your products to be able to rank on Amazon’s search results.

2. Create your rates to be listed on Page One on Amazon.

If you price incorrectly, you’ll be unable to sell any product at all.

In general, there are two aspects that you must consider when selling every single item that you offer on Amazon.

  1. You’re looking to earn money
  2. You’re looking to maximize your profits

In the beginning, you must take a look at all your expenses and determine what your price are to earn a profit on Amazon when you include these costs.

It is important to determine the price of your floor. Your price should be competitive and relevant to the most relevant keywords to ensure that your item is on the first page of Amazon results.

How to Calculate Your Amazon Floor Price:

To be able to operate in a green manner it is essential to understand the total cost of your expenses and consider them all, and then establish the price floor.

Below is the list of expenses you need to factor into consideration when calculating your budget.

Product Acquisition Cost

  • Shipping
  • Customs
  • Payment wiring
  • Amazon Commission
  • Amazon FBA Fees
  • Customer Return Fees
  • Fees for returns related to your own
  • Variable overhead allocation costs

There are additional costs that are specific to the category that you must take into consideration. For instance, if, example, you sell clothing Amazon will be charging you FBA charges for returns shipping charges for customers.

How to Find Your Upper Price Floor:

Keep in mind that your main aim is to get your items ranked at the top of Amazon results. This is where the magic happens, and then you can sell in bulk.

But, it’s only not a problem to bring your products to the top of the page with big market pockets. However, you would like your product to remain on the first page and create organic, sustainable, and profitable sales.

To ensure that your products be featured on the first page You must take into consideration your competition.It is simple to assess. You just need to search the key three keywords to find your product, then look at the cost of the results on page one.

Now, consider the following question: are your prices within the price range of what that you can find? For instance, the top price that you can find on the first page is $40. The floor for your upper price is $48. If the price you offer is more expensive than your competitors, you’ll probably not make it to the first-page list of Amazon result pages.

3. Maintain consistent pricing, with exceptions.

To establish trust with customers and to build a long-term sustainable brand on Amazon Maintain your prices steady.

Of course, there are some there are, of course, exceptions.

  1. The most common reason for price fluctuations is to improve your sales rank. This leads to more organic sales later.
  2. The third reason for price reductions is the cross-selling of your products which, in the end, will result in higher sales rankings for all the products which are included in the cross-selling promotions.

Usually, this means cutting down your costs to break even or even below profitability. This is usually performed during the launch of new products.

My company differs from our standard pricing primarily in the following situations:

New Product Launches

  • We provide a 15% discount at the time of launch for all customers.
  • We provide discounts of up to 50% on discount on prices for returning customers via our email list.
  • Cross Selling
    • We can offer discounts of up to 40% on bundle sales. e.g. If a buyer purchases an iPad case, he’ll receive a discount of 40% on the purchase of an Apple pencil case
  • Black Friday, Cyber Monday, or Other Holidays
  • Stock Clearance
    • If you’re in the position of having excess stock it can be helpful to get rid of excess stock. It could also help revive an item that is dead.

In the end, before you consider cutting prices to a point below profitability be sure to keep in mind that you’ll be able to have fun (i.e. succeed) being a seller on Amazon only if you can make organic sales that have a reasonable profit margin.

Remember that your main objective with Amazon is to place your item on the first page of Amazon results so that you can profit from the sales generated organically generated by the huge Amazon client base.

Recommended Guide: Benefits of Amazon FBA.


Stella Sharon