October 20, 2018 by Price-Fuel
Aside from shopping for clothing, consumers are buying just about everything they need from Amazon sellers and Amazon’s marketplace. If you’re a regular Amazon seller, you might struggle with timing the rollout of your next major price increase.
Figuring out how and when to let consumers know that you want to roll out a price increase is almost as important as the number itself.
Here are six methods for choosing the timing for your price increase.
When it comes time to price your wares on Amazon, your customers could be surprised by the high price of products they expect to be cheaper. If you’re not prepared to tell them why something has gone up in price, you can’t expect them to want to pay more for it.
If they see your company sending big bonuses to your executives and huge increases to shareholder accounts, they won’t be sympathetic to rising costs. However if you can give them something concrete they can understand, you can surely convince them of higher prices.
If there has been a natural disaster or a tax program in the news that has raised the cost of your products, customers will understand that. Saying that you wanted to open a new warehouse won’t be as easy for your clients to identify with.
If you’ve got a strong clientele that has been with you for years, they won’t mind a small price hike. If you have contact information, send them an email long in advance of a price hike. For products that haven’t gone up in price in many years, you’re allowed to increase the price and explain that costs have increased.
For newer customers, it can be hard to increase your prices and still have them stay faithful. Your best bet in this case, if you feel your clientele is still in a growth period, is to stay below the competition. So long as you’re still cheaper than the alternatives, people will think that your prices are fair.
Let your customers know when it’s been 10 years since a price increase.
If you’ve created products that will soon have more attachments, features, and extensions, let your customers know. If the value of your products is set to continue for months or years beyond the initial purchase, that could be a huge benefit to buyers.
In some industries, there are trade magazines that spread rumors about products. While you could rely on rumors, you could also send out some press releases and talk about exclusive features that will be offered to Amazon buyers. Treat your Amazon purchasers to an additional bonus and you could raise your prices without problems.
If you plan app integration or any kind of digital expansion, your customers could see the added value right away. Most customers are looking for ways to integrate all of their favorite products, making digitally integrated products are hot right now.
When you’ve got a lot of stock on hand, you might be tempted to increase your price due to other factors. However, this will cause your sales to slow down and make it harder to turn your assets into funds.
Use a days of supply measurement so that you can determine how much you need. If you usually sell around 10 pieces a day and have 100 pieces on hand, that’s 10 days worth of stock. If you expect a shipment in a week and have over a month worth of stock, you might want to actually drop your price rather than raise it.
If you can’t afford to take on that cost, then you’ve got to manage your current backstock and figure out how you can be better prepared for next time.
Your “bestseller” ranking gives you some insight on how your products are selling. The rating will change hour to hour. Sales are recalculated from hour to hour.
If you think you want to increase the price of your products based on this ranking, be careful. If you’ve got a steady sales rhythm, increasing the price could upset that balance.
If you suspect you won’t recover from the short-term effects of your price increase, wait before increasing it again.
It makes sense to set individual goals for each ASIN or product group. Let’s say whenever you sell more than 1000 units a month you would like to switch from growth strategy to profit based strategy.
The 1000 units idea can be a result of available stock and/or BSR positions and connected sales numbers that you have discovered for the specific product. Whenever you sell more than 1000 units you could increase your price a little and see what happens for 3 days. Let’s say the market agrees and your sales stay the same.
Add another steady increase. Through this method, you can endure that you’re balancing out your sales potential while hitting your maximum pricing potential.
While you’re struggling to decide when you want to roll out your next price increase, you could be weighing dozens of factors. The only thing that you really need to worry about is how you’ll frame it for your clients once they figure it out.
Most people don’t notice an Amazon price increase until they go back and check their records so have your reasons in order and on display when they ask about them.
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