What is Repricing Software?
Repricing or Repricer software automatically adjusts the price of a product as a result of a change by your competitor. It is also designed to take advantage of when your competitor runs out of stock.
Why would you use a Repricer?
Repricer benefits sellers who sell on marketplaces like Amazon and eBay to an extent (more of that later). If you sell on Amazon, you are positioned right next to your competition and if you are uncompetitive, you can disappear in to the mist. A typical third party screen for an item Preparing a spreadsheet, scouring a marketplace and marking down all your competitors prices is a tiresome process. It's also a costly one. You would either need to employ someone to do this for you or do it yourself, which would eat in to your money-making time.
When would you use Repricing?
- You have a lot of competition and this is affecting your sales
- You have a large Amazon inventory and adjusting prices is too time consuming
- You won't to free up to make more money
The last bullet point should be relevant for everyone! Competition is a massive subject on Amazon. Unlike eBay, Amazon sellers must sell under a single listing rather their own page. Therefore it's almost impossible to get return business, which makes every potential sale very important.
It is extremely difficult to get return business on Amazon
Ask yourself, how many times have you ordered something off a third party seller and you can't recall the company name!
What you may have heard...
You maybe reading this and a fellow retailer may have said to you "Yeah, repricing is pointless, it's just a way to lose money". There's a whole list of myths regarding repricing including...
- It's a race to the bottom
False: The good automatic repricer's can readjust prices if your competitor goes out of stock. That way you can maximise the value of each sale
- I'll have no say in what my price is
False: When you setup your repricer you will initially set a minimum and maximum price, to ensure you stay within your boundary
- I'll end up selling for a loss
False: A repricer will factor in your costs, shipping and sellers fees to work out a profitable price for each product
- I don't have enough SKUs for a repricer
False: Even if you don't have a lot of items repricer works around the clock, even when you're sleeping. If you do, or are looking to sell abroad with EFN, this is great for time zone differences
- I'll be selling everything for a penny
False: There are some sellers who do sell things for a penny. They aren't making money though! They may have a large inventory or are trying to get positive feedback or sales to their own website. When WebRetailer questioned 1,500 Amazon Sellers recently, other than inventory management software it was the 2nd highest software solution used by sellers.
Is repricing as big a deal on eBay as it is on Amazon?
It certainly is a lot less common on eBay. As I mentioned earlier with Amazon being a single listing, eBay allows sellers a lot more freedom on how they display their products. Such as...
- Creating their own personalised page with products
- Use stock images
- Offer collection
If you don't have any retail experience eBay is a much easier way of starting up. Due to this and it's seemingly non competitive nature, repricing isn't really worth exploring in detail with eBay.
Why repricing is so important on Amazon
- Competitive: Ensures your products remain competitively priced - resulting in more sales
- Less admin: Save hours manually adjusting prices
- Visitors: Amazon is very dymanic - it has over 5 million unique visitors per day
- Pricing: If you price too high you lose sales, price too low you make no money
- Buy Box: Increases your chances of winning the Buy Box
What is the Buy Box and why does it matter?
The Buy Box is essentially the retailer who wins the race to the 'Add to Basket' button. As you can see from the example below 'Hst Store' are very likely to gather the majority of the sales from this page. Despite there being two other sellers of the item and 'Well-Goal' offering the Jack cable at the same price.
90% of all sales are made through the Buy Box
Is it just price that influences the Buy Box?
Whereas price is a big factor and that's where a repricer helps out, there are other determining factors involved as well.
- Price: Product cost & postage
- Availability: Ensure you items are in stock
- Customer Service: Feedback, delivery times, experience
- Fulfilment: FBA or shipping yourself?
On the last point of fulfilment. The main reason why sellers see an increase in sales when using FBA is that Amazon rewards sellers for using the service. They have received criticism for this, as sellers who ship items themselves felt they were being unrewarded when FBA was rolled out. Not only will FBA give you a better chance of winning the buy box, but you are allowed to offer the following Amazon services:
- Super Saver Shipping
- Amazon Prime
- Gift wrapping
We will shortly be writing an ebook on Amazon FBA, so watch this space!
How to succeed with Amazon Repricing
So far we've covered what repricing is, why you would use it, dispelled a few myths and explained the Buy Box. So what are a few tips and tricks to ensure you're utilising it to the max and reaping the benefits as a result.
- Using FBA? If so, you can be confident that you can price above non-FBA users and still win the Buy Box
- Not using FBA? You will need to much more aggressive when pricing against FBA users
- Have good feedback ratings? You can bid more strategically against competitive sellers with less ratings
- Foreign competition? If you have foreign competition, higher your price. Amazon rewards domestic sellers
- When do I price up? Always set your product price higher when your competitor is out of stock, to increase profit margin
- Stagnant inventory? Price more competitively to shift items clogging up your warehouse
- How well do you know your competition? Set specific retailers to compete with and others you just want to ignore
Additional Repricing features
The repricing software market is very competitive, however from what I've seen personally the three I'd recommend would be RepricerExpress, XSellco or Appeagle. Here's a couple of great features that these platforms offer that could be of benefit to you. Automatic Scheduler: Have certain days where your sales drop off? You can set a schedule where you can be more aggressive on certain days of the week. Price Replicator: Do you sell on multiple channels? If not, you should be! Have a product listed on eBay and Shopify that you want to put on Amazon? You can use the same price across all channels with a replicator, to ensure there's parity. Has repricing worked for you? Have you had success with it on eBay? Know of any great software solutions to share with our readers? Leave a comment below!