Basics: Repricing Your Products on Amazon FBA
Dominate the buy box, generate sales, and move inventory.
Howdy! Today we have a basic overview of product repricing on Amazon. If you’re a new seller who’s starting to build inventory, listen up.
When I listed my very first products on Amazon, I remember popping open the Seller Central app every day. While I awaited my first sales, I would stalk the prices of my products.
Seemingly every hour someone would undercut me by a few pennies.
$19.99.
Then $19.97.
$19.95.
And so on.
And since I sourced some slower-moving products, these guys weren’t getting bought out either. So, 2-3 times per day I’d update my price to match.
Fast forward a couple months and now I’ve got a few dozen products in the warehouse. Everyday I’m waking up and I’m updating prices one product at a time through the app. As I’m scrolling through I notice something.
“Wait a minute. I just updated that price. Someone undercut me already?”
I felt like an idiot as I realized people had automated their repricing. Of course they did. How else would huge sellers manage their prices?
But perhaps the bigger realization was how badly it was impacting my sales.
When someone would update their price within minutes of me, they were getting the Buy Box immediately. And I would only get it back if they sold out or I changed my price.
Of course, doing this manually meant I got that Buy Box for ~15 minutes, 2-3 times per day, when I updated my pricing.
In other words, a max window of 45 minutes per day to sell my items.
Needless to say, it was painfully obvious I needed something to manage my repricing now that I had more SKUs and deeper inventory levels. Manually repricing is fine in the early stages for an Amazon seller, but actively repricing your products is how you move inventory quickly and efficiently—especially on high competition listings.
Let’s dive in.
The bad pricing habits you learned from COVID
If you’re a seller that started out during COVID supply chain issues, you probably picked up some terrible pricing habits. Sorry, COVID Amazon gurus.
During COVID supply chain days, you had the unique scenario where everything was in low supply. As a seller, you were conditioned to accumulate inventory, raise your price as high as possible, and hold it there. And it would work! People were paying outrageous prices for electronics, toys, etc. Unless you were price gouging essentials, you were rolling.
But now? Times have changed. In many categories, supply is now abundant. And when supply is abundant? Prices trend down.
For those still worshipping at the alter of restock bot Discord owners, you’re probably buying up inventory and watching your profits slip away as you “hold the line!!” with your top-dollar prices.
If you want to keep trying that, I wish you the best of luck. For the rest of you, we’ll break down why it pays to simply sling product and move on.
A basic example of why margin isn’t everything
At $300, your product makes $100 profit. It sells 1x a day for avg. $100/day profit.
At $280, your product makes $85 profit. It sells 1.5x a day for avg. $127.5/day profit.
At $250, your product makes $55 profit. It sells 3x a day for avg. $165/day profit.
On a monthly basis, your $300 price point will make you $3000 profit per month. Your $250 price point will make you $4950 profit per month. Of course, this scenario assumes you don’t have a finite amount of supply.
Exceptions to the rule
Before I have to hear about it, yes there are exceptions to what I talked about above. You can afford to maintain very high prices in the scenarios of imbalanced supply and demand such as:
Q4 holiday season (high demand)
Seasonal items (high demand)
Careful here. What sold like wildfire in previous years won’t necessarily sell the same next year. Shoutout to those still buying inflatable pools.
Discontinued products (low supply)
Hot product drops, like video games, toys, merchandise, shoes, etc. (high demand + low supply)
The power of frequent Repricing
Now, hopefully after reading my anecdote in the intro, it’s pretty obvious why you can’t just reprice products once a day. Active, frequent repricing is where the real magic happens.
Repricing every 15 minutes can make a world of difference compared to repricing once per day. Think about it—if everyone else reprices every 15 minutes and you reprice once a day—who’s going to dominate the Buy Box?
Hint: It’s not you.
On a high competition listing, you might win the Buy Box for a 15 minute window. But somebody else is going to take those other 1,425 minutes.
Automating Repricing with Repricers
Obviously, you’re not going to manually reprice every 15 minutes. We need software to do this for us. Fittingly, these software tools are called repricers.
Repricers can automatically adjust your prices based on your competitors’ pricing, your buy cost, your inventory levels, and the Buy Box history. Some popular options (in no particular order) include:
BQool
RepricerExpress
Informed.co
Aura
When searching for a repricer, consider the frequency at which it reprices + available integrations. Almost all repricers will advertise some AI or ML features. We want speed and as little hands-on work as possible. For example, if you have a lot of different SKUs, consider a repricer that integrates with your inventory management software. This means the repricer can automatically pull in your cost data and set your price minimums.
Warning: You do not need a $99/mo repricer if you just opened your Amazon account and have 4 SKUs with 25 total units. Pulling this number out of my butt, but I’d say earn your first $1000/month before considering a repricer.
For paid subscribers, you can find my personal repricer recommendation in The Vault.
Dangers of repricing like an idiot
Repricers are awesome, but they can also lead to some nasty showdowns. Imagine two sellers with repricers, both set to undercut the other's price. Next thing you know, you're in a full-blown price war (a.k.a. price tanking).
This is why we do not set our repricer to simply undercut for every product. We should have different pricing strategies for different listings.
Most commonly, we should be matching the Buy Box price. And we should have a repricer that knows how to raise the price once the Buy Box has been won, depending on the competition.
Again, for paid subscribers, we’ll cover exact repricing strategies and settings in next week’s post.
Conclusion
If you’re new to Amazon, just being aware that repricers exist will help you start to understand your competition a bit better. No need to grab a fancy repricer if you’re not already profitable. A repricer can’t fix bad sourcing.
If you have a couple hundred units in the warehouse and are earning $1000+/month, start to look at repricers. Again, consider speed and integrations.
Once you make a purchase, give it a go for a month and see what happens. Track your profitability and sell-through rates before and after.
In future posts, we’ll cover exact repricer strategies and settings. I’ll also be releasing a post on how to sneakily undercut competition without triggering a price war. Until next time!
A quick favor: If you found this post helpful or enjoyed reading, please let me know in the comments below or on Twitter: @BowTiedSlinger. Your words encourage me to keep on writing.