What is Amazon Repricing? Learn the Basics - Taxify
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What is Amazon Repricing? Learn the Basics

The Amazon marketplace is a competitive place – prices fluctuate constantly.

This means one price is never the right price. Amazon sellers constantly compete to offer the best price and win the Buy Box – the ‘Add to Cart’ box that powers 90% of sales on Amazon. In this environment, at some point your prices will either be too high to be competitive, or too low to make a healthy profit – if you’re not careful. One option to navigate these challenges are repricers.

When Amazon sellers start to think about repricers, they’re commonly experiencing either a rise in competition that hurts sales, or managing an inventory that’s too large to reprice manually.

If you’re experiencing either (or both) of these problems, then it might be time to consider using an automated repricer.


What is repricing?

First, let’s review what repricing is not. It is not a race to the bottom. A pricing strategy purely based on being the lowest price will inevitably hurt your profits.

Automated repricing is when the price of a product is automatically changed.

This change could be in reaction to a competitor’s price change, or to take advantage when a competitor runs out of stock. In both of these cases, products can reprice upwards and downwards and you set the maximum and minimum price for that product.


Go automatic or stay manual?

If you want to change your prices to remain competitive, there are two ways of doing it – manual and automated repricing.

Manual repricing means going into each of your products and changing your prices by hand – a time-consuming process. Depending on the size of your inventory, manual repricing can be an impossible task that involves constantly monitoring your competitors prices for numerous products.

Automated repricers will both increase as well as decrease your prices, but never outside of the minimum and maximum price rules that you set. A repricer will also ensure your prices remain fluid – reacting to your market to maximize your sales and profits.


What should I expect from a repricer?

The core benefits of using a repricer are increasing sales, reacting instantly to competitor price changes, and minimizing the time spent on manually reviewing prices.

However, repricers come with a variety of differentiating features and pricing models. There are a few things you should consider before you decide which repricer to use.

1) Is it real time?

Not all repricing software operate in real time. In fact, some may take as much as an hour to reprice in reaction to a competitor price change. In the world of Amazon sales, an hour is a long time.

To be the most competitive seller in your market, use a real time repricer. This will ensure you react instantly to competitor changes – not an hour of missed opportunities later.

Real time repricers can be more expensive – but it’s an extra cost that pay for itself. Repricing in real time means you’re competing for the Buy Box every minute rather than every hour, and that will have a big impact on sales.

2) Is there a limit on the number of SKUs?

Do you manage a large inventory? The limit on the number of SKUs varies across repricing companies – from the thousands up to one million.

If a repricer has a tight limit on the number of SKUs you can reprice, and charge you extra when you exceed the limit, it will get more expensive as you grow your business.

If you sell a lot of products in highly competitive categories, choose a repricer that accepts a large number of SKUs from the beginning and save in the long run.

3) Does it take a cut of revenues?

Some repricers take a percentage of the overall sale, and many don’t.

Initially, a small cut may not seem like much, but if you’re making high volume sales on thousands of repriced products, a small percentage of your sales could quickly become a significant figure over time and erode your profit margin.

4) Is it a rules-based or algorithmic repricer?

There are two main types of repricers: algorithmic and rules-based repricers.

With an algorithmic repricer, you set your minimum and maximum price, then the repricer does the rest. The costs and pricing models vary by company, with some taking a cut of sales.

With rules-based repricing, you have greater influence over how your repricer works. You can reprice based on stock levels, shipping costs, make exceptions for certain products or competitors, create Buy Box strategies and more.

5) If rules-based, how comprehensive are the rules?

There are a number of rules-based repricers available to Amazon sellers. However, the number and the value of the rules on offer can vary.

If you decide to use a rules-based repricer, compare the rules of each repricer and find the one with the most comprehensive rules structure. Make sure you’re getting value for money.

Rules you should expect to have include whether a seller uses Amazon fulfilment or not, stock levels, shipping, competitor exceptions and seller rating.


Is there a solution?

Running a profitable online business is a time-consuming and challenging task with many facets, such as shipping, inventory, management and customer service, to consider. Choosing the right repricer means you take every opportunity to make a sale and achieve maximum profitability.

You get the hours back that you previously spent on manual repricing, which you can now use to work on other important aspects of your business while your repricer is making you more sales.

Rupert Heather, Content Writer XSellco Price Manager is the leading rules-based marketplace repricer, allowing you to reprice in real time, and power your repricing strategy with a variety of flexible rules.

Request a demo or try a Free 14-day trial today.

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