August 31, 2018 by Price-Fuel
There are over one million ecommerce companies in North America alone. If you’re running a private label business, not only do you have to compete with tons of other smaller businesses, but you have to find a way to lure buyers away from huge brands.
With today’s technology, anyone can start a business. Keeping your business profitable is quite the challenge, though. If you’re serious about success, this article will walk you through the 7 most important tips you need to know for your Amazon pricing strategy.
With this information, you can find the best way to compete with big sellers while still churning a healthy profit.
Most shoppers use Amazon’s search engine to do their shopping instead of relying on recommendations. In order to generate the most traffic to your products, private label sellers fare best when they’re listed on the first page of Amazon search results.
Think about it: have you ever clicked beyond the first few pages at any point in your life when researching anything? Amazon hosts millions of products. If you’re lost on page 38, your product will never sell.
How do you get on the first page? There are a couple things you need to do. Research the top 3 keywords buyers will use to find your type of product and investigate how other sellers are pricing.
After you’ve listed your product with a top keyword title to ensure you can grab attention, you can move on to figuring out your ideal cost. Top Amazon sellers recommend that you never set your product as the cheapest item available.
Getting ranked on page 1 is, of course, a little more difficult than simply finding the right pricing point. You may have to consider launching & PPC strategies and other on-page optimization tactics. But without the right pricing point, those tactics might have no results.
Every seller knows that there are fees that take away from your earnings like manufacturing and shipping costs. However, Amazon sellers need to be familiar with all the fees. When you sell on Amazon, be wary of the following costs:
Starting a spreadsheet to keep track of all these costs can make the process of learning how to price your product easier. Once you’ve calculated your costs to sell, a safe starting guide for finding a selling price is to add roughly 30% to your costs. Keep in mind that it’s worth doing a little more research before settling on this safe figure, though.
Your minimum price for an aggressive strategy – for example, to boost market share – should be at breakeven. Some sellers even calculate a small loss in the beginning.
When you research other Amazon seller pricing, especially the prices of items on the first page of search results, you can find the maximum price you could get away with for your own items.
Of course, selling at the highest price doesn’t always work to the seller’s advantage. Finding a happy middle ground between the safe 30% increase from your costs and the highest price on the market is your best bet to generate a lot of sales while still making a nice profit.
If the demand is high, you can also increase your price to an even higher level. Still, many sellers recommend to stay in a fair pricing window in order to generate recurring customers.
Nobody can resist a good deal. In fact, people will spend more money than they intended if it means they can also save more. It may sound counterintuitive to lower your prices to make more money, but science backs the claim that deals generate more revenue.
Participating in holiday sales like Black Friday/Cyber Monday, Labor Day, and Christmas will make a lot more buyers interested in researching your products.
Offering bundle deals is another great way to sell more of your inventory.
Many shoppers use Amazon search by price tools to find the best deal. No matter what market you’re in, prices are always going to fluctuate. This means that you need to keep up with all new trends to keep your spot on the first page.
Sometimes if you sell smaller ticket items, you’ll never have to worry about changing your prices since any other market fluctuations will be small. However, this tip is especially important for private labels who sell big-ticket items where discounts can lead to substantial savings.
Building a loyal following is an excellent way to run your e-commerce business. One way to stay in touch with buyers is to build a marketing email list.
Serious shoppers always track Amazon pricing to save some money. If you can directly inform the public of sales and special deals you’re offering, you can get them interested in buying more from you.
To build your marketing email list, you could offer an initial discount to first-time buyers who sign up to join your list. This will not only tempt buyers to test your products, but if they are happy with what they bought, then you’re one step closer to creating a longterm buyer-seller relationship.
Since many people prefer to stick with brands they trust and love, treating loyal customers right can go a long way in terms of boosting your sales.
Many sellers can be overwhelmed by calculating the best prices. Human errors happen a lot more than you think. If selling is your primary income, then you don’t have a lot of room for mistakes.
Luckily, technology can work a lot faster and more efficiently than we can. If you want to get an edge on your competition, then you need to use all the tools available.
To make your business less stressful, technology can keep track of market trends, research competitors’ prices, and adjust your own prices to maximize your profits. The best part is that these online tools never sleep. When you team up with technology, you’ll ensure that your business is always operating at 100% capacity.
As you’ve read, there are a lot of factors that you need to consider for your Amazon pricing strategy. Price Fuel can make your job easy by determining optimal prices with thorough market research.
For more information on how our services can revolutionize your business, check out our features. If you love what you see, you can even get a free 14-day trial.