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Amazon’s-pricing-strategy:-A complete-guide

“Selling on Amazon”, “Amazon’s pricing strategy” and “making a profit out of business on Amazon” are three different terms. These terms create most out of business on Amazon.

As per Statista, In the first quarter of 2021, Amazon’s net income amounted to 8.11 billion U.S. dollars, up from the results of the preceding quarter with 885 million U.S. dollars. Amazon’s net sales amounted to 108.5 billion U.S. dollars during the same fiscal period.

Shopping via Amazon

Online product sales are the biggest revenue segment of the e-tailer, followed by retail third-party seller services. Amazon not only processes vendor sales but also enables third-party sellers to sell their goods through the platform. In the first quarter of 2021, more than half of all paid unit sales were generated by 3P sellers. During a February 2019 survey of U.S. Amazon shoppers, it was found that the most popular Amazon shopping categories were electronics, followed by apparel and footwear. Key factors that drive consumers to shop via Amazon are broad product selection and low shipping costs, as well as competitive pricing. Increasing product sales also led to increased logistics expenditure for the retailer. In 2020, Amazon’s fulfillment expenses amounted to 58.52 billion U.S. dollars, up from 40.23 billion U.S. dollars in 2019”.

Seeing the below graph says that selling on Amazon can build your business and ruin it as well if you are missing the opportunity.


Introduction to Amazon’s pricing strategy

Selling on Amazon through Seller Central is an easy challenge to perform. But making a profit out of it is a difficult task. For making the most out of Amazon you need to price well. Also, a good pricing strategy keeps you ideal in the face of the Amazon Seller Performance team.

The key strategies include the following points to be considered while selling on Amazon.

  • Listing products on Amazon
  • Writing product description
  • Keyword stuffing
  • Product photography

How to start selling on Amazon?

In order to start selling on Amazon, you have to register your business on Amazon Seller Central.

Take note of the following steps to be taken to start selling on Amazon.

  1. Open your web browser and search Amazon Seller Central.
  2. Click on Sign up.
  3. Follow the instructions by Amazon to complete registration on Amazon.

What’re Amazon fees for starting a business?

There are two types of accounts on Amazon:

  • Standard Account: It is free of charge with a limit of 40 item listings per day.
  • Professional Account: It is valued at $39.99.

Shipping costs: How to deal with it?

Shipping costs are reduced when you find a very local supplier in the area. Or in the second option, you can choose to work with Amazon FBA. In both shipping costs can be reduced and customer service can be made excellent.

How to list products in the Amazon marketplace?

Listing products on Amazon is a skill. Keyword stuffing is necessary in order to rank your product in Amazon search results. Also, proper Social Media Optimization (SMO) and Social Media Marketing (SMM) should be done for the product. This becomes very necessary when you’re selling on a social media platform.

However, this is a matter of another chapter.

How to write an Amazon product description to increase profit margin?

Copywriting is a skill used to write ads for any platform. Attractive copywriting can make patent customers online as well. Plus you can get a buy box on a consistently good performance and lower pricing each and every time.

What are repricing tools available?

Renown System, a group of virtual assistants, provides software called Renown Genius. This software takes care of repricing and is great repricing software. Promoted by valuable clients, this software got skills. Those skills are listed below:

  • Inventory management software
  • Auto repricing with automated overall pricing.
  • Bulk listing 
  • Out of stock resolution
  • Profit calculator, etc.

What should be Amazon’s pricing strategy while selling on Amazon?

At Amazon, the lowest priced, keyword-stuffed product wins the buy box every time. Let us discuss The possibilities that can be undertaken to get more sales while selling on Amazon.

  1. Research about your competitors and their reviews as well.
  2. Employ repricing if there are many competitors to handle.
  3. Buy software like Renown Genius and employ automation. In repricing so that you don’t have to check all the time.
  4. Consider adding products that have no or little competition like private label products.
  5. Request customers to leave reviews. Do NOT be pushy though.

What should be the selling price?: Getting the buy box

Our selling price should be focussed upon getting the buy box. Buy box is directly connected to the number of items sold per Amazon account. Both the terms are directly proportional to each other. Let us discuss the main points to put into consideration.

  1. Deduct shipping times to under fourteen days or as soon as possible.
  2. Reduce the number of returns and replacements by providing good customer service.
  3. Write the product description in a manner to reduce cancellation rates( say good copywriting)
  4. Products sold through FBA get a buy box more often than a regular seller as they have lower delivery times.
  5. Again, appeal to the buyers to rate your seller profile by providing the right link to your profile.

What is repricing?

Repricing is putting a product-based competitive price on Amazon in order to increase sales. There are various softwares like Repricer Express, Renown Genius, OAgenius which are automating repricing. Otherwise, it was a task that required hard work.

Setting a price: What are the possibilities?

Setting a price is most suitable and needed for building a sustainable development on Amazon. Let us discuss now what we can do.

  • The main aim of the price reduction module should be to increase the sales rank. And, therefore increase overall organic sales.
  • When you are launching a new product be sure to offer a discount. This and these kinds of tactics are often used by performance sellers.
  • Do not make an exception during holidays. Everyone offers something at a discount. You too should.
  • Do not over fluctuate the price.

Deciding minimum and maximum price: HOWs and WHATs

Deciding on minimum and maximum price is one aspect of increasing sales in your Amazon account. There can be two strategies for it:

  • Selling Private label: Here the max. and min. price is decided as per value-based pricing.
  • Selling non-private label: Here the maximum and minimum price is decided as per competitors’ price.

How to do it while selling private labels?

Putting it in a straightforward way, I will say, “ Amazon customers do not care about your sales targets or your pricing strategy. All they want is a good product with value-based pricing. 

While selling private labels you got the opportunity to sell as per the requirements of the customers. And if the customer’s demand is value-based pricing then secure it for increasing sales in your Amazon account.

The points to ponder here are:

  1. Create short stories about your product and include them in the product description.
  2. Share user experience as per promotion perspectives relating to the actual product.
  3. Send “Thank You” notes to everyone who buys the product along with your contact number.
  4. Do market researches about what the ideal market price should be. This keeps you away from sales fluctuations over time.

Conclusion: Final thoughts

As long as one sticks to the guide, Amazon’s pricing strategy should be fine by all means. By the way, what would be your’s pricing strategy while selling on Amazon? Do comment in the box below.

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