Price Matching Strategy: Definition, Uses, and Benefits
In the competitive world of e-commerce, it’s crucial to implement an effective price-matching strategy with software. Here’s everything you need to know.
Price matching is an invaluable strategy in the e-commerce landscape. It involves actively monitoring competitors’ online prices and using software to adjust your own for maximum efficiency and profitability. Price matches can significantly boost conversions by keeping your listings competitive against other sellers and attractive to prospective customers.
On competitive listings, it can be hard to break through the noise. But one of the most effective and efficient ways to match prices and stay visible on online marketplaces is by using an automated repricer.
What is price matching on Amazon and Walmart?
Price matching on Amazon, Walmart, and other online marketplaces is an increasingly popular strategy used by digital merchants to compete with each other more effectively. Essentially, sellers use software algorithms to track competitors’ prices, then make a price adjustment in order to stay competitive — or even get a share of the coveted Buy Box.
Automated repricers make it easy to stay competitive and maximize profits by programmatically adjusting listing prices in real time based on the competition. They can scan your competitors’ listings for changes in pricing, availability, or product condition and automatically adjust your own listings accordingly. This helps ensure that you’re always offering the best possible price while still maintaining healthy profit margins. With comprehensive data points about the changing competitive landscape, sellers can leverage automated repricing solutions for rapid price changes within pre-established parameters.
Who Should Implement a Price Matching Policy?
The internet has revolutionized the e-commerce landscape, offering unprecedented levels of convenience and access to a wide variety of goods. For online sellers, this presents an ever-growing opportunity for success – however, you should monitor the competition to maximize profits and drive growth.
Price matching is one direct way online sellers can remain competitive on major e-commerce sites like Amazon or Walmart. Such strategies are absolutely critical if you want your offer to stand out from the crowd. Shoppers naturally flock toward favorable deals that tick all their boxes regarding quality and budget. Furthermore, sites like Amazon and Walmart display lower-priced offers more favorably than higher-priced ones when all other seller metrics are comparable. If you want a share of the Buy Box, you'll need to be sure you're price matching effectively.
At the end of the day, if you sell on any online marketplace, you have something to gain by employing price-matching strategies using a good repricing software.
Key Considerations When Price Matching
There are a few key considerations you need to take into account when configuring your automated repricing software.
Competitor Prices, Including Marketplaces Themselves (Like Amazon)
The most obvious factors to consider are the prices of competitors. To stay competitive and increase sales, you should configure your repricer to monitor competitor prices closely. This can allow you to stay ahead of the competition by keeping up with current pricing trends and offering the lowest possible price for a product without sacrificing profit margins or brand reputation.
Alternatively, you can simply aim to keep pace with larger sellers like Amazon — that way, you will avoid charging more than they do for the same product (and thus motivating customers to pick the other seller).
At the same time, you will avoid pricing things too low and undercutting your profitability or even initiating a “race to the bottom” that will tend to favor the bigger seller, especially if you are on that seller’s platform and paying them fees that diminish your relative profits. In these situations, it can be better to have a repricer that seeks to match other sellers, sharing the spotlight and allowing the quality of your product or service to make the difference rather than a cheaper price.
Good repricing tools like Flashpricer allow you to sync your costs for each listing, then they automatically track competitor pricing trends and calculate selling fees, in order to generate data-driven pricing decisions to give you an edge without ever selling for a loss. By leveraging this technology, sellers increase their chances of becoming top sellers in any given category or product line.
For online marketplaces like Amazon, automatic repricing gives sellers access to up-to-date competitor listings being offered both by FBA and Merchant Fulfilled Networks. This allows them to guard against unrealistically low competing bids, preventing unfair price manipulation across multiple versions of the same product. For example, Flashpricer allows you to ignore poorly-rated sellers on a listing, who may offer a lower price but provide a terrible customer experience. In this case, you would not want to match prices with that seller, knowing that your strong reputation and positive reviews can command a higher price.
Winning the Buy Box
Winning the Buy Box is the key to success for sellers in any online marketplace. This critical placement allows you to remain competitive and drive sales, even when other sellers are lowering their prices.
Repricing software simplifies this process of price matching by automating it, allowing you to focus on other aspects of your business while still competing with other sellers. These aspects include optimizing product listings for SEO search results, offering competitive shipping rates and delivery times (which is particularly important during peak periods like the holiday season), and providing outstanding customer service that includes prompt responses to inquiries.
Let the repricing software handle the price matching. You can focus on tweaking other important elements.
Demand and Quality
Aggressively monitoring the Buy Box and low FBA seller prices for individual listings requires an in-depth understanding of both. When a customer’s demand is high for a particular item, repricing software should be able to act quickly by adjusting list prices accordingly, keeping an eye on how competitors and the online marketplace at large is reacting to the demand. At the same time, keeping an eye out for when a competitor goes out of stock or leaves a listing is super important. When these events occur, good repricers like Flashpricer recognize the opportunity to reprice you upwards.
With appropriate attention paid to these two factors, successful price matching can occur even within fast-paced markets where competition remains fierce.
A price-match strategy should always aim to maintain profitability while staying competitive. This entails understanding the sales windows of a product on each marketplace – from launch dates to discount periods. Repricers use algorithms to monitor competitors’ prices and regulate the selling price accordingly so you can match or beat other offers during your products’ pre-defined sales window.
Repricing software can automatically bid competitively during the sales windows for each product. Setting a price ceiling is also an option – that way, you don’t risk pricing yourself below optimal profit levels during periods of heightened competition. This is especially important on Amazon and Walmart, as both marketplaces will deactivate your listing if you are priced inordinately high.
The Advantages of Programmatically Price Matching for Online Sellers
Programmatic price matching lets sellers remain competitive online, improve their bottom line, and stand toe-to-toe with FBA or third-party sellers on individual listings.
Maintain Competitive Prices in a Competitive Industry
Obviously, the foremost advantage of price matching lies in its primary function. Price matching software automates and speeds up the process of constantly monitoring marketplace prices so that sellers are always able to stay ahead of competitors in the marketplace.
Instead of manually updating pricing several times per day, these systems can instantly update product listings whenever there’s a change in competitor’s pricing data, ensuring accurate tracking and efficient repricing operations at a large scale. This alone saves hours spent comparing prices from multiple sources and leads to improved outcomes due to increased listing visibility and conversions due to placing products more frequently in Buy Box deals.
Increase Sales Figures
As you use automated repricers to quickly and accurately match your competitors’ prices to ensure you remain competitive in the marketplace, you’re able to avoid being undercut by competing businesses. This is the foremost advantage of repricing: making sure your customers have no reason to buy from competitors instead of you.
Additionally, because repricers need to properly match marketplace listings, they make it easy for sellers to keep track of pricing trends across different markets and adjust prices accordingly. This constant vigilance keeps you in line with the competition, or even a step ahead — with the right repricing software.
Compete Against FBA or Third-Party Sellers on Individual Listings
Online marketplaces like Amazon and Walmart offer several unique factors that sellers need to take into account — from the coveted Buy Box to a much higher concentration of competition, which even includes the brand behind the marketplace! This is why sellers try many different ways to compete against FBA and other third-party sellers. Most of these methods, however, are resource- and time-intensive. You could offer unique products or services, provide better customer service (that stands out from the rest), or run aggressive promotions and discounts to drive sales.
Then there’s price matching via programmatic repricing software. It’s an efficient way for online sellers to stay competitive against FBA and third-party sellers that does not require significant amounts of investment. Using automated repricers allows you to quickly adjust prices in response to changes in the marketplace based on the rules you set — practically in real time. Automated repricers can also monitor competitor pricing across multiple marketplaces, allowing sellers to offer customers the best possible price on individual listings. The return on investment of the right repricing software is simply too significant to ignore.
Software That Makes Competitive Pricing a Breeze
As you can see, e-commerce repricing software platforms such as Flashpricer are essential tools for marketplace sellers, helping them to remain competitive and maximize profits. Repricing is all but necessary to ensure success when you are selling on fiercely competitive platforms like Amazon or Walmart marketplaces — especially when your competitors are leveraging the same tactics and tools!
Automated repricing allows sellers to adjust prices quickly in line with market forces like competitors’ prices, their own sales history, and the BSR (best-seller rank). Sometimes, it may be beneficial to match the prices offered by a larger competitor rather than exceeding or undercutting the price. An automated repricing process also frees up time that would otherwise be spent manually repricing items so sellers can focus more attention on expanding their business operations.
The right repricers can even be used to balance out your other sales channels. Flashpricer lets private label sellers match the prices of their other channels, setting markups or decreases accordingly, based on their own websites.