Which tactics increase profits without a race to the bottom?
Amazon and Walmart change their item prices millions of times every single day in order to stay competitive. As a third-party seller trying to compete with major corporations, you'll need all the pricing help you can get. Repricing strategies help keep your items at the top of search results and the use of a repricer makes the process even easier.
In this blog post, we'll discuss the top 8 pricing strategies for Amazon and Walmart and how you can use a repricer to get the most out of each strategy.
Manual repricing vs. automated repricing
Manual repricing is the process of manually adjusting the prices of your items in response to changes in market conditions. While manual repricing is possible to accomplish on your own, it requires constant vigilance and can be very time-consuming.
Stores with large inventories won't be able to complete the research and execution required to reprice every single item in a given day. On top of that, manual repricing exposes your store to human error. You could wake up to find out you've sold a ton of product, only to realize the items were priced wrong and you're actually losing money on each sale.
Automated repricing, on the other hand, is the process of using software to automatically adjust the prices of your items throughout the day. The method is done using a repricer software of some kind. A repricer is able to monitor the prices of your items and the prices of similar items on Amazon or Walmart. When a change is detected, the repricer will automatically adjust your price to match, or beat, the new price.
The obvious advantage of using a repricer is that it takes all the guesswork and human error out of changing the price of your items. As long as you have a good repricer, you can be sure that your prices will always be competitive.
This approach frees up your time so that you can focus on other aspects of your business and leaves the heavy lifting to the software. Additionally, automated repricing is more accurate than manual repricing, which means that you are less likely to lose money due to human error.
Best repricing strategies for sellers
If you're selling products on Amazon, you need to have a plan for repricing your items. After all, price is one of the key factors that shoppers consider when making a purchase. By repricing your items regularly, you can stay competitive and increase your chances of making a sale.
Here are the best Walmart and Amazon repricing strategies that will keep your items ranking high in search results and give you the best opportunity to succeed as a third-party seller.
Exclude your competition
Many third-party sellers fear that using a repricer will drop their sales too low, cutting into their profits and possibly causing them to lose money.
The truth is, repricers like flashpricer have a feature that allows you to remove competition with low ratings. Sellers with lower ratings or non-FBA sellers are forced to lower prices for the opportunity to compete with higher rated sellers, causing your repricer to equal your prices with theirs. These types of sellers can be excluded from your list so your prices remain stable while still being competitive.
Excluding your competition can help you gain further insights into how competitive your items are and give you enough information to make informed decisions in the future. Businesses should use this strategy if they feel the data they are using is incorrect. If you take specific actions in your store and you aren't getting the results you want, try getting more specific on who your actual competition is.
Focus on item condition
Make sure you're pricing your items according to their condition, whether it's new, used, or refurbished. You don't want items that are used to be priced higher than the same items that are new. There is an option to reprice items that are in the same condition using a repricer so you don't have to worry about complex pricing for all conditions.
Without using this setting, your items could suffer from price changes that don't accurately reflect what the market is demanding. Businesses that are struggling to maintain focus on a specific product can benefit from focusing on the item condition. If you're feeling lost about what changes need to be made to your items, double down on a specific condition instead of offering new, used, and refurbished items.
Set minimum prices
Repricers are looking at items similar to what you offer and shifting the prices depending on what it sees. That means even if a competitor's product is priced lower than what you need to make a profit, it will still change your price to match theirs.
Solutions like flashpricer allow you to set minimum prices for your items. This way, you guarantee that you'll never sell an item for less than what you need to make a profit. Setting minimum prices will help you avoid the race-to-the-bottom strategy that many third-party sellers fall into.
Remember to include all fees and shipping costs when setting your minimum prices. Without including these extra costs, your repricer will be using incorrect data to change your items and your store will no longer be competitive.
Set maximum prices
Just as you set minimum prices for your store, it's just as essential to set maximum prices. There are times when sellers seek the highest price possible to get the largest profit margins. This is typically when competitors start falling off a listing and remaining sellers start hiking prices.
Instead of your store following suit, you can remain more competitive by setting a maximum price for your own items.
Win the Amazon Buy Box
Any seller on Amazon will tell you that the key to success is winning the Buy Box. The Buy Box is an area on a product detail page where customers can begin the purchasing process. When you win the Buy Box, your product is featured prominently on the page and is more likely to be purchased by customers.
Repricers like flashpricer base their price changes on the Buy Box and even check every hour for any changes even if it doesn't receive a notification. There are a few requirements you must meet for your store to be eligible for the Buy Box including:
Professional selling account
Low Order Defect Rate
Low Cancellation Rate
Low Late Shipment rate
Sufficient Order Volume
Although Walmart has developed its own proprietary algorithm that it uses to rate sellers, it functions similarly and uses price as a major factor for winning the coveted box. Unfortunately, the Walmart API is inconsistent and you won't get accurate data unless you're using a tool like flashpricer.
As long as you can keep up with pricing and meet all other eligibility requirements, you have a good chance of securing a Buy Box.
Include shipping in your price
Including shipping costs in your repricing strategy will help tremendously when setting minimum and maximum pricing. Without including the additional costs, you may unintentionally sell an item for too low or too high.
Luckily, flashpricer will automatically include shipping costs when comparing your items to the competition. You won't have to do any extra work or calculations and can spend your time marketing your products.
Since all the competition data you'll be getting includes the shipping costs in the overall total costs, you'll want to do the same so the data is accurate. Repricing strategies will be largely dependent on your actual item costs so make sure everything you input is correct.
Go beyond the Walmart API
The unfortunate truth is the Walmart API puts out incorrect data on pricing 40% of the time. Third-party sellers using the API for Walmart repricing strategies are missing out on crucial data that can help them stay competitive.
You could continue to use the API in hopes Walmart will fix the issues, or you could use a tool that accurately reflects the front-end data from the Walmart Marketplace. Flashpricer combines the API data and cross-references it with front-end data to give you real-time pricing advantages.
No more guesswork is involved and your items will be more competitive than other sellers who are only using the Walmart API for repricing strategies. If your business is struggling to be competitive in the Walmart Marketplace, you'll need to use a more accurate repricer like flashpricer.
Use market demand as the only seller
Don't get caught in a trap because you're the only seller offering a particular item that you don't need to reprice. In fact, it's even more important for you to reprice because you could be missing out on easy opportunities to make more money.
Flashpricer also works especially well for listings without competition. i.e. for brand owners and people whose primary business model is private label.
In these situations sellers have a predetermined price that they typically retail their product for. This price may work for your own Wix, Shopify, Squarespace Bigcommerce or custom built website, but the playbook is not the same when selling on marketplaces.
There are many factors that flashpricer takes into our proprietary private label repricing algorithm, which includes machine learning on sales velocity, at different price points, which it is testing at different times of the day, week and year, then overlay the best sellers rank and your ad spend to find the best price to sell the product at a specific time of day throughout the year for the max sales to profit ratio.
Whoa! That's a LOT of datapoints, we will also make sure you want to to be selling at these prices and you are at least achieving a minimum profit goal after all selling fees. It has taken years to develop these types of algorithms and they only get better over time!
Supply and demand ultimately rule any market and as demand for your particular item goes up, you could take advantage by offering higher prices. Without a repricer, you'd be missing out on free money that wouldn't have cost you any extra labor or resources.
The same can be said in reverse. If not many people are interested in your product, your repricer can lower the costs to make it more appealing for shoppers to take action.
Using repricing strategies
Pricing your items correctly is essential for maximizing profits as a seller on a third-party marketplace. The best way to ensure that your prices are always competitive is by using automation software like flashpricer to reprice your items regularly. Automated repricing is faster and more accurate than manual repricing, which means that you can free up your time and focus on other aspects of your business while still getting the best results. Get exclusive access and beat your competition by signing up for the flashpricer early access today.