The “Amazon price ceiling” has a loophole. Hard to believe? Read on…
I’ve always said things like:
“Amazon’s price is the ceiling.”
“You cannot out-price Amazon and still get sales.”
“Buyers always prefer to buy from Amazon over you, 100% of the time.”
And all of those are true, or true in enough – which is to say, true 99% of the time (especially the last one).
I’m going to teach you a trick for breaking through the price ceiling.
I.e. How to get more for your FBA offer than Amazon.
Here’s a premise to understand before we get into that:
No one wants to buy their book from you. Not one person on this earth.
Every single human on this earth would prefer to purchase from Amazon over you. It’s not that you’re bad, it’s that Amazon is so good.
The only circumstances in which someone will buy from you over Amazon are:
- You’re cheaper.
- They don’t notice you’re not cheaper.
Fortunately, the first one applies to most books.
Now I’m going to tell you how to capitalize on the second.
The premise of the FBA “sleight of hand” technique
To understand how and why this works, we have to lay some groundwork…
Let’s say you’re an Amazon customer. You say to yourself: “I’m going to go buy the cheapest Prime-elgible copy of Monkey Mustaches for Dummies on Amazon.”
A lot of people login to Amazon with this agenda (the “cheapest copy” part, not the weird monkey book part.)
They’ve already primed themselves (no pun intended) to go right for the Buy Box, click “add to cart”, and call it a night.
It is a legitimate (and usually correct) assumption that the cheapest Prime copy is in the Buy Box. If its not the cheapest, its going to be close enough to not matter.
(Stay with me, I’m setting up the punchline here.)
It’s also legitimate for the buyer to assume the Used copy is cheaper than the New copy. This “fact” is not even questioned.
All available stats we have indicate the majority of all sales happen through the Buy Box. So in theory, most buyers looking for a used book will go straight for the Buy Box. Do we all agree on that?
These customers aren’t even looking at Amazon’s price. This might be a small percentage, but there is still a slice of Amazon customers who are so focused on “buying a used book,” they never look at – or notice – Amazon’s offer. At all.
We can sell to these people
For these customers (the ones who don’t ever notice Amazon’s price), it doesn’t matter how high our FBA price is. Our book’s price is not being compared against Amazon, because they’re not even noticing Amazon’s price.
The trick is to understand that these customers are a small percentage of total traffic. Let’s just say 1 out of 20 people never even notice Amazon’s price. We have no way to know the true numbers. But let’s just go with 1/20.
So now you’re thinking: Why would I want to wait for the 20th person to come along? I could sit on this book forever that way.
And that’s true. I don’t want to wait that long either. But we don’t have to.
Here’s the big reveal:
When a book is very well ranked, a certain percentage of buyers each day or week simply won’t notice Amazon’s price is lower, and buy yours.
With well-ranked books, these buyers might come along once (or more) a day, instead of once a month.
That’s the trick. This only works with very well-ranked books.
The ideal circumstance for this trick is as follows:
- Very well-ranked book (to play it safe, better than 10k).
- No FBA offers under Amazon’s price (duh)
- The used and new prices are very close (as is the case with many very well-ranked books)
When those three factors fall into place, its pretty much a guaranteed win.
And yes, this works.
How should you price books like this?
Same rules apply. Price as you would were Amazon not selling the book at all. Just ignore Amazon’s price completely.
Remember: This only applies to used books
Essentially, we’re exploiting the layout of the Buy Box, and our offer being in a different place than Amazon’s. And since Amazon only sells New books, the only way to occupy different product page real estate than Amazon is to sell a Used book.
What’s my sales rank threshold for the FBA “sleight of hand” trick?
There’s no hard rule here. I personally apply this to books ranked 10,000 or better.
There’s no reason you won’t get sales for books with a worse rank than this. Or you might choose to be more conservative. It’s totally subjective. Test different sales rank strata yourself.
Just remember, we’re capitalizing on that small percentage of people not noticing (or caring) that Amazon’s price is lower.
So let’s do some math.
Let’s assume (totally randomly) that this applies to 1/20 people, and look at two examples around this (random) figure.
Example #1: A book ranked 150,000, selling one copy a day.
Let’s say a book holds a steady rank of 150,000, or selling about 1 copy a day.
By this math, your high-priced offer will sell in the next 20 days.
But then consider that a lot can happen in 20 days. Specifically, you’re likely to get undercut by another seller in that time.
So this really isn’t likely to be a consistently victorious strategy. You might sell some books here and there, but it won’t be consistent. And how many books with this rank don’t have FBA offers under Amazon’s price already? Not many.
Example #2: A book ranked 5,000, selling 15 copies a day.
Now we’re talking.
The available evidence indicates a book with an Amazon sales rank of 5,000 is selling about 15 copies a day (ballpark figure here).
If 1/20 people are going to ignore Amazon’s price, you should see a sale pretty fast. Maybe in under a day.
And the real number may be 1/10, or it may be 1/50. Who knows? The better the rank, the faster you’ll get a sale.
Going deeper: What’s the next move here?
If I had a book like this, I would basically ignore Amazon’s price.
Let’s say Amazon was selling their copy for $49.95. Lowest merchant fulfilled offer was 29.95. And no FBA offers.
If it was a textbook, and it was ranked 5,000, I would go $99.95. If any other type of book, I might still go $99.95. At least $75.
Pricing is a very subjective thing, so I wouldn’t fault someone for pricing on either side of this. But $99.95 feels like a nice round number. And from there, I’d just wait it out.
Advanced profit hack: Listing New books as Used
I’ve never tried this next one, but only because this is a circumstance you don’t see often. It’s the usual formula, with one added element:
- Very well-ranked book.
- No FBA offers under Amazon’s price
- The used and new prices are very close
- You have a New book for sale
In this instance, I would take that New book and list it as Used. Because then you can list it higher than Amazon’s price, and break through the price-ceiling by securing our place in the Buy Box.
Thought you couldn’t beat Amazon? You just did.
PS: Had success with this tactic? Post in the comment below.
PPS: Is there an elephant in the room here with regards to the ethics of this? I don’t have a strong opinion (and will probably agree with anything you say below), but curious if people have strong feelings. The comments are your soapbox.
PPPS: My “Outsourcing Your Amazon Business” webinar is back.
I couldn’t believe how many people showed up for the last one.
I don’t do webinar replays, so I’m blocking out Thursday evening to do this again LIVE for everyone who couldn’t make it.
I’m covering a step by step system for outsourcing the 3 most time consuming parts of your Amazon business (Sourcing, Pricing, and Prepping/Shipping). Totally free.
It’s this Thursday @ 6pm Pacific / 9pm Eastern.
PPPPS: If you didn’t hear about this webinar last week, take a look at everything I’m covering here.