The 14 Biggest Mistakes in Repricing

What are the most important criteria potential buyers on Amazon look for? Pricing? Customer service? Delivery time? If pricing is among your top three options, you’re definitely not alone with this assessment. It’s no wonder that the final price (the product cost + delivery fees) is the most important metric for Amazon sellers who want to place their products in the shopping cart field, also known as the Buy Box. Don’t get me wrong, I’m not trying to downplay the relevance of other selling criteria like delivery time or return rate, but at the end of the day, one thing is always clear: the final price is the most crucial metric if you want to win the Buy Box. This is where price optimization or “repricing” comes into play on Amazon. In this article, we will cover the most common repricing bottlenecks and mistakes. Knowing how to avoid these will enable you to multiply sales, grow your businesses, engage new customers, and win the Buy Box.

What Is Repricing and Why Is It So Important for Sellers?

We may have already mentioned one or the other term that needs more explanation. Here a quick recap on the Buy Box and repricing. 

The Buy Box

Also known as the “Add to Cart” field, you can find the Buy Box on the right side of the product detail page when browsing through one of the many Amazon marketplaces.

But why is there such fierce competition for the Buy Box? The main reason is that only one seller can win the Buy Box at a time, and approximately 90% of all sales take place through it. Ask yourself: When was the last time you were on Amazon and didn’t make a purchase through the yellow shopping cart field but actively searched for alternative sellers of the same product?

Here’s the catch: winning the Buy Box is tough, but the investment is worthwhile, solely because of the visibility and sales that come your way once you have it. Accordingly, repricing mistakes can also be costly and lead to a sizable dent in your revenue. Especially when considering the introduction of the second Buy Box, the topic of repricing has never been more relevant than now. 

Repricing

This is nothing more than price optimization, which means adjusting one’s product prices according to the respective market situation. There are various factors that sellers can consider, such as the competitors’ prices for a specific product or across products, supply and demand of the product, and the incorporation of external factors like trends or seasons.

How is this done? Most professional Amazon sellers use a repricing tool, which is software that handles this tedious work for them. On the other hand, some sellers prefer to conduct their market research without the help of software and manually adjust their prices. Both methods have advantages and disadvantages. It is also important to note that not every repricing tool for Amazon is the same. But more on that later.

How does repricing work on Amazon? In general, everything revolves around the following question: How do I adjust the prices of my products on Amazon, taking into account all relevant factors, to optimize their sales?

There are several methods of price optimization in this regard.

Manual Repricing

The manual approach means that you don’t use software for price optimization and take care of the continuous price monitoring of your products yourself. This requires that you permanently check the prices of your competitors and the market conditions – you do this around the clock, even on weekends and holidays.

The advantage is that you are always in control of your Amazon pricing strategy with no external influence. In addition, most Amazon repricing tools are not offered for free. So if you don’t use a repricer, there is no cost. 

What are the disadvantages? Amazon repricing without software takes a lot of time. Also, prices may be out of date a few minutes after the last change. On Amazon Germany alone, five billion price changes take place every day. So if you get involved in manual repricing, you can’t always keep prices up to date and also don’t have much time left for other important tasks. The latter can lead to other metrics being neglected and a decrease in seller rating. Apart from that, you also have to factor in human error, repricing mistakes are much more common when processing your pricing strategy manually. This is simply because it is a repetitive and tedious task which raises the margin for error. 

Static Repricing

For the sake of time savings, Amazon sellers can turn to static repricers, which operate on the principle of “be cheaper at any cost.” Here, you have the option to set the price difference between your offer and the cheapest or Buy Box-placed offer.

Although this principle slightly increases the likelihood of winning the Buy Box, there is no rule of thumb predicting the necessary price difference. In one case, it might be 10 cents, in another 13 cents, and in a third case, your offer could even be more expensive and still win the Buy Box.

Why is that? While the end price plays a significant role in the Buy Box algorithm, it is not the only criterion. Factors such as shipping method, order defect rate, and other factors are also considered.

Apart from the small Buy Box share, the use of static repricers leads to price competition and low margins.

Dynamic Repricing

To make price adjustments on Amazon, you can also use dynamic repricing software. This software first determines the price to secure exclusive ownership of the Buy Box. Then, unlike static repricers, the dynamic repricer gradually increases the price to ensure that you keep the Buy Box at the highest possible price.

A significant advantage of this form of repricing over manual and static methods is that your products are much more frequently in the Buy Box while being sold at the highest possible price.

Some sellers fear losing control over product prices by using a dynamic repricer.

However, this is not the case. You are free to analyze the market situation and adjust relevant settings in the repricer based on your findings at any time. Additionally, a good repricer offers multiple strategies to choose from, which you can set for each product yourself.

Repricer ≠ Repricer

As a business investment, it makes sense to check if the software you will be putting money into lives up to your expectations. There are several things you can plan in advance when considering using a repricer. Does the company provide the strategy you need the most? Do they provide customer support in your language? 

What Can Go Wrong With Repricing? The 14 Biggest Mistakes

So we have seen that repricing is one of the most important methods on Amazon to obtain the coveted position in the Buy Box. By winning the Buy Box on Amazon, you reach more customers and increase your sales. However, simply having a repricer is not enough, you also need to know how to use one and be aware of things to keep clear if you want to make the most of it.

#1 Using the Wrong Repricing Methods for Your Business Model

There are two common ways to reprice on Amazon: either manually by adjusting your prices or automatically by using software. When you reprice manually, it gives you a lot of control over your Amazon products but, at the same time, will be more time-demanding or a seemingly endless task. Due to the likelihood of human error, using repricing software to automate manual processes is the preferable option and helps avoid repricing mistakes on a regular basis. 

Whether you are repricing manually or using a third-party tool, considering different repricing strategies is always a good idea since it allows you to select the optimal repricing tool that will match best with your sales strategy. Because the competition on Amazon can be fierce and it’s hard to keep up with the online giant’s endless market changes, we strongly encourage using software to even the playing field when it comes to repricing.

Repricing software is the most effective when you use strategies that are suitable for your product. The right strategy selection depends on certain factors. For example, if the product is a retail product, the focus should be on the profit of the Buy Box. For private label brands, on the other hand, the focus would be on price optimization dependent on sales figures or competing products’ prices.

#2 Neglecting the Role of the Price in Order to Win the Buy Box 

Chances to win the Buy Box are primarily shaped by the price. Despite Amazon not revealing the exact algorithm, many sellers and experts have affirmed the importance of the price in practice. That is why accurately setting your prices with a repricer has become one of the most popular strategies.

If the product or delivery costs start to differ, these changes will also influence the final price, meaning that adjustments should be undertaken promptly at this point. In order to stay on point at all times when it comes to adjusting your final price, repricing software works wonders for your revenue and your time management. 

Along with the price as a crucial factor, other metrics like fulfillment method, stock availability, shipping time, etc. – you can read all about them in our workbook! – play a significant role when it comes to winning the Buy Box position. 

There are a few scenarios, where your competitor’s late shipment or negative customer feedback will ensure that you win the golden “Add-to-Cart” field. The SELLERLOGIC Repricer enables you to include these scenarios in your Buy Box and Cross-product strategies. Our solution allows you to compare your prices and those of your competitors on the same and similar products, ensuring that your prices stay optimized for winning the Buy Box and your repricing mistakes stay at a minimum.

#3 Collisions of Minimum & Maximum Prices Between Amazon and Repricer Software

When using repricing software, you will very often set minimum & maximum prices for all products. However, when you start repricing, you should keep in mind that the minimum and maximum prices that may have been used earlier in the Amazon Repricer are still valid. This means that going below or above the prices would result in a pricing error. In such a case, the offers will go offline until the price error is manually removed.

There are two solutions for this. 

A good repricing tool can help you determine the minimum and maximum prices based on Amazon’s costs as well as the margin you set.

#4 Ignoring Prices on Similar Products

Also, it is very important to keep pace and periodically check competitors’ prices. Buy Box and Cross-product strategies in the SELLERLOGIC Repricer automatically do that for the same and similar products and keep repricing mistakes at a minimum at the same time.

#5 Using the Same Strategy for Every Product

There is no strategy that universally applies to all possible products. If you sell commercial goods, the Buy Box strategy is the top choice. For private label brands, it is recommended to optimize based on sales figures or across multiple products.

Therefore, pricing requires the segmentation of goods based on factors such as high or low demand or seasonal sales. Let’s explore various SELLERLOGIC Repricer strategies for the most common cases.

#6 Changing Prices Manually: Human Touch Versus Algorithmic Accuracy

In fact, some sellers still regulate prices manually. However, no one can match the speed and accuracy of an algorithm. The majority of the repricing strategies listed in the previous section cannot be remotely performed manually.

#7 Setting Your Min & Max Range Improperly

There are other common repricing mistakes, for example not setting minimum and maximum prices appropriately and realistically:

If you set your minimum and maximum prices too close together, you have little room for maneuver, as the price range becomes too narrow, thereby reducing the chances for your prices to be optimized.

#8 Using Multiple Repricers at Once

It’s important to remember that repricers differ in mechanism and quality. Choosing the right repricer based on your business needs is paramount. It is especially useful if your repricer supports different strategies from rule optimization to dynamic price adjustment. Fixed, dynamic or mixed pricing can be maintained depending on your needs.

On Amazon, dynamic pricing is clearly what you should be going for: the automated algorithms are shaped by the pricing strategy, which takes into account competition, supply and demand, and other external factors.

#9 Disregarding FBA as an Option – Shipping Matters

The use of Fulfillment by Amazon (FBA) offers you several advantages: access to dedicated Prime customers who are more likely to make purchases, prioritization in Buy Box placement, and consequently increased sales despite lower fixed costs.

What’s more, FBA sellers can offer their products at a higher price compared to sellers who handle shipping themselves. 

Here’s a real life example: An FBA seller offers a product for €30 with free delivery and secures the Buy Box. On the other hand, a seller who handles shipping themselves charges €24 plus €6 for shipping and does not appear in the Buy Box.

#10 Shelf Warmers in Your Inventory

Repricing requires reports that are requested from Amazon. Until you have these reports in your inbox, some time can pass. The more products are listed in the report, the longer it takes Amazon to generate it. Unnecessary shelf warmers in your inventory thereby slow down this process and should therefore be discarded as soon as possible.

#11 Going Out of Stock 

Going out of stock isn’t technically in the list of common repricing mistakes, nevertheless it still is a problem for Amazon sellers. If you don’t have any inventory to sell, you won’t be able to win the Buy Box, and you won’t be able to make any sales.

Repricing is no longer useful in this case. Moreover, running out of stock has a negative effect on Amazon Best Seller Rank rating, which takes time to “heal.”

In summary: make sure your stock doesn’t run out.

#12 Not Calculating Overall Costs

Traditionally, Amazon repricing has become a so-called “race to the bottom,” in which sellers lower their rates to stay ahead of the competition. Naturally, if you don’t keep a close eye on your spending, this technique won’t work.

To prevent a scenario like this, just think about the total costs. Direct costs such as product prices and delivery, along with indirect costs like employee wages, may significantly influence your profits.

Your Amazon sales costs widely rely on your fulfillment method and product categories. SELLERLOGIC’s Repricer offers automatic calculation of minimum and maximum prices taking into account these costs specifically.

#13 Multiple Listing of a Product in Similar Condition

Due to technical limitations imposed by Amazon, the repricer cannot function with multiple listings in the same condition. Amazon does not provide the necessary technical capability for this. Generally, there can only be one listing per condition and shipping method (FBA, FBM Prime, FBM). Therefore, instead of having 5 separate listings for a product in “New” condition, only one listing with a quantity of 5 needs to be created. The same applies to used products.

#14 Repricing Mistakes – Using “Lazy” Repricers

Using a repricer that doesn’t respond to Amazon price notifications but instead retrieves prices only a few times will not get you far in terms of price management on Amazon. Such systems are inadequate because the set price can become outdated within seconds. If the repricer takes several hours to react to the changed market situation, the Buy Box share and consequently the orders go to other sellers who use a fast repricing tool.

Final Thoughts

As you can see, many of these repricing mistakes can be circumvented by running a tight ship and keeping a close eye on your pricing strategies. This will help you win the Buy Box and scale revenue. Luckily, winning the Buy Box is not rocket science but mainly about keeping the customer as happy as possible. Using software is a noteworthy option that allows you to do this en passant while focusing on other factors such as profitability and growth – provided you know how to use your software properly.

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