For resellers competing on the Amazon marketplace, constant adjustment of product price is a regular occurrence. Amazon sellers achieve this with the help of an Amazon repricer, usually a third-party solution. A repricer is the go-to pricing tool for Amazon sellers to help them stay competitive within the fast-moving Amazon marketplace.
Introduction to Repricing
Repricing: Brief History
With the evolution of eCommerce, repricing was introduced into the digital landscape. The concept of repricing in its simplest form refers to the method of updating the prices of products or inventory.
The majority of businesses, especially those immersed in eCommerce, update product prices based on specific rules or algorithms instead of simply relying on the traditional paper price tag. Hence, ushering the age of repricers.
Amazon Repricers: Things Sellers Should Know
When it comes to pricing, Amazon was quick to adapt and implement modern technologies into its pricing strategy. Amazon makes use of big data, machine learning, and other advanced technologies to augment its pricing rules and strategies.
The main goal of Amazon's Retail Pricing Team is to improve pricing strategies to a point that less human input is required.
Fortunately, the goal of providing reliable pricing solutions is not solely exclusive to Amazon. Third-party software developers and companies were likewise given the opportunity to offer price optimization solutions to online retailers.
Amazon Repricers and the Buy Box Connection
In order to thrive in the online retail industry, sellers started to adapt price management and implement price optimization technologies. Amazon sellers, in particular, consider repricers as an irreplaceable asset for their online retail businesses.
An Amazon repricer is a seller tool that aids in changing the price of products on Amazon. With around 2.5 million price changes occurring on Amazon on a daily basis, it has become necessary for Amazon sellers to utilize repricers in order to keep their prices highly competitive and win more Amazon Buy Box.
The Amazon Buy Box plays a crucial role in the increased profitability of an Amazon seller. The Buy Box is considered prime real estate on the Amazon platform, for more than 80% of Amazon sales transactions materialize through the Amazon Buy Box.
The Buy Box is located on the right portion of the product detail page. Technically speaking, the "Add to Cart" and "BuyNow" buttons constitute the coveted Buy Box. For sellers who are notable to win the Buy Box, their offers occupy the “Other Sellers on Amazon” section.
For Amazon to provide shoppers with the best customer experience, they only award the Buy Box to sellers who comply with the Amazon algorithm. Specific details of how the algorithm works have not been disclosed by Amazon, but price optimization is one of the key factors that helps sellers win more Amazon Buy Box.
Amazon FBA sellers, in particular, are highly competitive when it comes to winning the Amazon Buy Box. FBA sellers will reprice their listings in order to win or regain their Buy Box ownership. Due to the highly competitive landscape, utilizing a repricer enables Amazon sellers to improve their repricing strategy and increase their Buy Box win rate.
Factors for Winning the Amazon Buy Box
Apart from the listing price, there are other factors that have been observed to influence the Amazon algorithm in awarding the BuyBox. Here are some of the factors Amazon sellers should take into account to win more Buy Box:
BuyBox Eligibility: In order to win the Amazon Buy Box, you must be Buy Box eligible. This means that you must be a subscription-based Professional Seller, have a sufficient order volume, and have good performance metrics.
Feedback Rating: Since Amazon prides itself on customer satisfaction, its system tends to award the Amazon Buy Box to Amazon sellers who have excellent feedback ratings.
Fulfillment Method: It has been observed that Amazon highly favors sellers who are enrolled in their FBA program since Amazon handles the entire fulfillment process under the FBA program.
Other Performance Metrics: Amazon is obsessed with customer service, which is why it consistently pays attention to customer experience. For that matter, Order Defect Rate, Return Dissatisfaction Rate, Late Shipment Rate, and Refund Rate are also checked by Amazon.
Overview on How a Repricer Works
Generally speaking, the function of a repricer is to adjust Amazon product listing prices. Relevant reports and notifications are downloaded from Amazon to your repricing software via Amazon MWS API connectivity.
Once downloadable reports have finished populating the repricer, it will then check the listing and analyze the offers from other Amazon sellers in order to determine who to compete with on a particular listing.
Normally, a repricer will give you options to help narrow down the competition. Such options include but are not limited to competing with: (1) buy box eligible sellers; (2) sellers having particular ratings; (3) sellers enrolled on a specific fulfillment program.
For any changes in the marketplace, the repricer will receive an update from Amazon. Thus, allowing it to reprice listed items according to specific rules or chosen repricer settings.
Alternatively, more advanced repricers offer automated repricing instead of relying on predefined settings or manual user input.
What Are Your Repricer Options?
Sellers can choose a repricer depending on their goal or the repricing strategy they have in mind. To help you narrow down your options for a repricer, here are the types of repricers used on Amazon today:
A manual repricer is best used by sellers who have few items in their inventory. Using a manual repricer for your Amazon business simply means going into each product and changing each listing price manually, making manual repricing a time-consuming process for high-volume sellers. This type of repricer can very easily start price wars and almost never moves the listing price up, which means a race to the bottom of the price structure.
In contrast to a manual repricer, a rule-based repricer provides more leeway for Amazon sellers. Unlike a manual repricer where you have to manually change the prices of each listing, a rule-based repricer will adjust the listing price based on predefined rules found within your repricer settings.
With this type of repricer, sellers are given access to some of the commonly used pre-defined repricing rules. This type of repricer is reactive as opposed to proactive so it reacts to each individual price change made by your competitor, instead of learning, analyzing, and creating strategies based on market conditions and competitor behavior. This type of repricer can also cause profit losing price wars.
Algorithmic & Automatic Repricers
An algorithmic repricer, or sometimes known as an AI repricer, automatically adjusts listing prices through computer algorithms. Consequently, sellers are freed from the tedious task of manual price adjustments and they don’t need to rely on limited predefined repricing rules to perform price changes. Since algorithmic repricers learn from the competitive environment and devise tailored strategies to outsmart the competition, no set-up is needed by the seller.
Algorithmic repricers, like Seller Snap and Profasee, uses AI Game Theory tactics to reprice products, which leads to a dynamic pricing strategy. This type of repricing technology is a game-changer in the Amazon industry for it can quickly respond to specific competitors, significant marketplace changes, and other Amazon notifications.
Both small-medium retailers and high-volume sellers can rely on the AI repricer for dynamic repricing strategies to help increase the Amazon Buy Box win rate and boost profitability.
The benefit of an algorithmic repricer has been substantiated by the study conducted by Northeastern University revealing that sellers who use an algorithmic repricer perform better than other sellers who do not use this type of repricer.
Additionally, the same research likewise detailed that "Amazon is much more likely to feature sellers in the buy box who use an automated practice called algorithmic pricing."
Is Amazon Repricer Worth It?
An exceptional repricing strategy is required to achieve competitive pricing on Amazon. In order to achieve this goal, continual price changes are necessary.
Amazon repricers, especially automatic AI repricers, are worth investing in for 2021. With the help of a repricer, you will not only achieve competitive pricing for your items, but it will also help streamline your Amazon business.
The use of a repricer will speed up your repricing process while decreasing or avoiding human error. Hence, allowing you to allocate more time to other aspects of your Amazon business, such as marketing and advertising.
With a repricer at your disposal, your repricing strategy will likely be governed by logic rather than emotions, such as panic, fear, anger, and anxiety that could lead to impulsive decisions.
Algorithmic repricers automatically analyze market data, competitors’ behavior, and price changes in order to deliver optimized price adjustments. It inevitably positions you ahead of your competitors who are unable to adapt or are yet to realize the benefits of dynamic repricing.