Automated Amazon Repricing & Seller Ratings: How Automation Can Boost or Hurt Your Business

The two main reasons why pricing – and, therefore, your pricing strategy – is critical for selling successfully on Amazon are first, the impact it will have on your sales, and second, your seller rating on the platform itself.

Regarding the first point, one thing you can be absolutely sure of is that your customers are looking for a good deal. They might not even know what they want to buy yet … but they definitely want a good deal when they do. Amazon knows this, which is why competitive pricing is one of the most important factors in their customer-centric business approach.

This brings us to the second point. A customer-centric business approach naturally means you must offer competitive pricing to attract customers. If you do this, Amazon’s algorithm rewards your products with visibility and your account with a higher seller rating, ultimately leading to more sales.

However, always selling at the most competitive prices may work well during events like Black Friday or other seller promotions, but it’s not the best approach year-round. This is where automated Amazon repricing comes in.

With the correct strategies, you will not only improve your sales numbers but also increase your margins. This article will describe how to do this and provide you with best practices.

Let’s dive in.

What is Automated Repricing?

With prices changing over 2 million times per day on Amazon, automated repricing is a strategy used by advanced sellers to stay competitive. Repricing solutions dynamically adjust product prices based on external factors such as competitor pricing, market conditions, and stock levels.

The need for dynamic pricing on Amazon stems from the platform’s intense competition. Once a seller’s product portfolio reaches a certain size, manually managing prices becomes nearly impossible. Automated repricing ensures that pricing strategies remain efficient, responsive, and profitable in an ever-changing marketplace.

How It Works

Automated vs Manual Amazon Repricing – Which One Should You Use? 

This depends on how advanced you are as a seller and what your ambitions may be. It also depends somewhat on the categories you’re selling in.

While manual repricing gives you at least the feeling of full control over your pricing strategy, it also comes at a cost – quite literally. Manual repricing will cost you time and money, not to mention the mistakes you have to factor in due to human error.

Automated repricing only has one “downside” – it requires you to use a repricing solution, which will cost you money. However, considering how many more sales you will make, how much time you will save, and the mistakes you will avoid, setting up a repricer for your business is still definitely worth the investment. This is especially true if your product range grows – because you will very quickly reach a point where you would have to hire several employees to adjust prices without a repricing tool.

Here’s how to determine which approach is right for you:

Pro Tip: Choose a repricing tool that allows for smart pricing strategies, such as setting floor and ceiling prices, so you don’t get caught in a race to the bottom.

The Connection Between Pricing and Seller Rating

Let’s take a closer look at the impact pricing has on the Amazon seller rating. The way you price your products directly influences crucial Amazon performance metrics. Not in the least customer satisfaction, Buy Box percentage, and  the order defect rate (ODR), all of which factor into your overall seller rating.

Check out our article on Amazon KPIs to find out more about crucial seller metrics.

Customer Satisfaction

As mentioned earlier, competitive pricing increases customer satisfaction. High customer satisfaction is reflected in a greater number of positive reviews, which in turn leads to a better seller rating and increased sales.

Overpricing your products can result in negative reviews, returns, and low seller feedback ratings. However, pricing your products too low may create the perception that your product quality is subpar.

Strike the right balance – one that provides you healthy profit margins while ensuring customers feel they are getting a great deal.

Buy Box Percentage

Competitive pricing increases your chances of winning the Amazon Buy Box. By consistently offering the best price on a product – alongside strong fulfillment and service metrics – you can grow your Buy Box share, which is a crucial factor, as the Buy Box drives the majority of sales on the platform.

However, consistently selling at the lowest price isn’t a sustainable strategy, as it can significantly erode your margins. Automated repricing tools help sellers dynamically adjust their prices, ensuring they remain competitive without sacrificing profitability.

Order Defect Rate (ODR)

Poor pricing strategies can lead to a higher Order Defect Rate (ODR), which in turn results in negative feedback, A-to-Z claims, and chargebacks.

For example, if you set your prices too low, your company may struggle with profitability, forcing you to cut costs on fulfillment or customer service. This, in turn, leads to poor customer experiences and an increased ODR.

A smart repricing strategy helps circumvent these issues by maximizing margins, maintaining high seller ratings, and reducing the risk of negative feedback – all essential factors for your long-term success on Amazon.

Effective Amazon seller rating optimization does not rely on just one factor, but many factors working together. Find out more about how to improve it in our article on the Amazon Buy Box.

How Automated Repricing Helps to Win the Buy Box

The best repricing strategy on Amazon for sellers who sell wholesale products is, hands-down, the Buy Box strategy. Here’s how it works:

To win the Buy Box, you first need to assess the price at which competitors are selling the product. Then, you can undercut them. If your other metrics are also strong enough, this will earn you the Buy Box and the increased visibility that comes with it. You’ll notice you have the Buy Box because your sales will increase. From there, you can gradually raise your price until you’re just under the point where the Amazon algorithm removes you from the Buy Box.

This is the sweet spot you want to hit as a seller – selling at the highest possible price while still benefiting from the visibility granted by the Buy Box. The challenge, however, is that you don’t know exactly where this optimal price point is, meaning you risk losing the Buy Box by raising your price too much without realizing it. Another drawback is that this process can be time-consuming, taking your attention away from other important aspects of your business.

When looking for effective ways to win the Buy Box, using automated repricing is the best approach. Not only does a repricer automatically detect the Buy Box threshold, ensuring you don’t unnecessarily sacrifice margins, but it also allows you to scale this process across as many products as you like – without taking up your time.

Potential Downsides of Amazon Repricing

As with all automations, there are a few pitfalls to consider as a seller. These are price wars, margin erosion, and the risk of over-automation.

How to Avoid Price Wars

Since repricers are built to undercut one another, the possibility of triggering a price war is quite high. A race-to-the-bottom scenario may be great for buyers and Amazon, but it is certainly not something you want to start as a seller. The good news is that this is very easy to avoid. If you are repricing manually, simply set a minimum price (e.g., the price at which you know you’ll be selling at a loss) and stop undercutting your competitor once you hit that threshold. If you’re using a solution like the SELLERLOGIC Repricer, simply set a minimum price (price floor).

Margin Erosion on Amazon  

Repricing mistakes also include failing to take your margins into account. While staying competitive is crucial, it doesn’t mean you should do so at the expense of your profits. Constantly matching low competitor prices may cut deeply into your margins and lead to financial strain. This can easily be avoided by setting floor prices to protect your margins, ensuring you maintain a sustainable pricing strategy.

Don’t Risk Over-Automation 

Repricing strategy risks like relying entirely on automation without regularly reviewing and adjusting your strategy can lead to undesired outcomes or missed opportunities. For instance, your repricer might react too aggressively to competitor price changes or ignore factors like seasonality or your inventory levels. Even though an automated Amazon repricer takes a lot of work off your shoulders, it still needs necessary adjustments to fully reflect what you want to achieve. So be sure to reserve a time slot in your schedule for adjusting your strategies.

Best Practices for Using Repricing to Boost Seller Ratings

There are a few best practices in finding out how to apply automated pricing strategies in order to maximize your sales. This depends on what your goal is. Here are the most common scenarios and how to handle them:

1. Choose the Right Strategy for Your Business Model

2. Leverage Buy Box Targeting

3. Monitor Competitor Pricing

4. Apply Dynamic Strategies

To learn more about this topic, read our blog article on 9 Repricing Strategies Every Seller Should Know.

Final Thoughts

The connection between automated Amazon repricing and seller ratings is close-knitted. Sellers that are serious about their status on Amazon should consider getting an Amazon repricing software like the SELLERLOGIC Repricer. Covering all strategies you need as a seller, the Repricer is not only developed to raise your margins, but also save you time and reduce errors. If you’re trying to figure out how to improve your Amazon seller rating with the least amount of time investment, getting the SELLERLOGIC Repricer is the way to go. 

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