The Amazon automated pricing feature: The good, the bad, and everything FBA sellers need to know about why it may be the worst Amazon repricing tool.
Why repricing software is (still) a mistake
I’ve spared no words talking about what a mistake it is to turn over your Fulfillment by Amazon (FBA) inventory to repricing software.
So when the Amazon “automated pricing” feature debuted, I was excited. The primary gripe with third-party repricers is that they are prohibited from “seeing” any FBA offer that’s priced outside the bottom 20. Which might be (partially) useful for toys and beauty items. But not books.
Books are unique in that there are more cheap used third party offers than any other category, which means many FBA offers are not in the bottom 20. That means you can’t reprice against many FBA offers. Which, for FBA sellers, is the whole point of automated pricing.
Yet an sutomated repricer created by Amazon would not be subject to the “lowest 20” limitation. With this new (and free) repricer, were we now living in repricing paradise? It only took me a few minutes of testing to have an answer…
Three reasons I was excited for the Amazon automated pricing feature
- With Fulfillment by Amazon, the money is in two things: Sourcing & Pricing. (Meaning a repricing tool that works = big revenue boost)
- I was paying serious money to a virtual assistant to do my FBA repricing manually.
- Then my virtual assistant quit. (That’s another story, but my FBA repricing ground to a halt and I was desperate for a solution).
Was this the automated FBA repricer we’d all been waiting for? When my VA repricer quit, I was finally motivated to put Amazon’s reprcer to the test.
How Amazon automated pricing works
Step #1: Pricing Groups
The idea is to create repricing “groups,” where different bundles of your inventory are repriced according to different criteria. (Basically how all repricing software works.)
There are two pages of options to set these options and create a group.
Here’s the first page:
The first set of options let’s you compare your price against one of two offers:
- The Buy Box price.
- The lowest price overall.
Step #2: Pricing Action
Once you set that, we move on to the “pricing action.” Basically, now that we told Amazon what offers to compare to, how do you want it to price your offer in relation to that?
Your options are:
- Price below
- Price match
- Price above
Step #3: The price to set
Then you set whether you want the price set to be a dollar amount, or percentage. (I have a lot to say about this, but I’ll hold that until the end.)
Step #4: What to compare your price to
Then you can tell Amazon what type of seller to compare your prices to.
- “Only offers with same fulfillment method”
- “Only offers from third party sellers”
Checking number one tells Amazon: “Only compare against FBA offers.”
Checking number two tells Amazon: “Ignore Amazon’s offer” (I guess).
(You can check both.)
And if you choose to compare against the lowest price overall (vs the Buy Box price), you get two additional options:
3. Only Sellers with a feedback rating within 5% of yours
4. Only offers with the same or better sub-condition
And that’s page one of your pricing options.
(Hopefully its glaringly apparent what’s missing here, but if not, I’ll explain in just a moment.)
But there’s one more page of this process: Choosing which books to put in each pricing group.
Step #5: Choose the SKUs to Reprice
First you enter the SKU, title, ISBN (or whatever) you want to add to the Pricing Group. This brings up results that include what you type in this field.
I assumed I could enter a partial SKU, and it would bring up every SKU that contained that text-string. But you must enter the whole SKU to return results – it will not let you enter a partial SKU.
Step #6: Set a minimum and maximum price
Then you go down the list of results and set a minimum price and maximum price (floor and ceiling) for each. You must enter this info for each item in your inventory.
And for each book, you hit the “+” sign to add it to the pricing group and begin repricing.
And that’s it.
What are the good things about the Amazon automate pricing feature?
The biggest breakthrough is that it lets you match the lowest FBA offer – no matter how much higher it is above the lowest merchant fulfilled offer. Remember: Every other repricer only lets you price against FBA offers if they’re priced in the bottom 20. So the ability to reprice against all FBA offers is huge.
(A lot of FBA sellers swear their 3rd party repricer can do the same. Look more closely – it can’t.)
In terms of significance, this is big. And it solves the biggest problem of all other repricers. So what’s the catch?
What are the bad things about the Amazon automate pricing feature?
Here is every reason Amazon’s repricer is not the Holy Grail
Bad thing #1: It only gives you the lowest FBA price
You can only price in relation to the lowest FBA offer – not the 2nd or 3rd.
For books with an Amazon sales rank better than 1 million(ish), I’m probably matching the lowest FBA offer less than half the time.
More often, I’m ignoring the lowest (often outrageously lowball) FBA offer, and pricing above it. That offer will sell out, and mine will be next in line.
This is just smart FBA pricing. It yields an extra $1, $3, $10, or even $30 (and beyond) per book. Multiply by thousands of books, and pricing any other way is leaving a ton of money on the table.
The inability to price against higher-priced FBA offers is the single biggest reason I will never use Amazon’s repricer.
This blindspot alone is enough to make Amazon automated pricing totally worthless to FBA sellers. Yet there’s more…
Bad thing #2: Sales rank is not included as a pricing parameter
This is Repricing 101: You are pricing an FBA book offer with a sales rank of 2 million totally differently than a book ranked 10,000. These books aren’t even in the same category.
So any FBA repricer that doesn’t offer Amazon sales rank as a factor is functionally worthless for smart repricing.
And not only is sales rank not a pricing parameter, Amazon sales rank is strangely absent from being displayed on the “Add listings to your rule” page. So you can’t even make and sales rank based decisions one-by-one when adding SKUs to a pricing group.
Makes no sense.
Bad thing #3: You cannot enter a partial SKU and add to a pricing group
Example: I price my textbooks differently than all other books, and want a pricing group that reflects that pricing formula.
So for the purpose of manual repricing, I put the word “text” at the front of every textbook SKU.
It seems pretty basic that I’d want to enter the word “text” in Amazon’s repricer when adding SKUs to my pricing group, have it bring up every book with this word in the SKU, then add all of them to a pricing group in one swoop.
With Amazon’s automated pricing – this is not an option.
Bad thing #4: Worthless “price above” option
The “Percentage” and ” price above” option is worthless because it doesn’t factor in higher FBA prices.
Some would say: “True, Amazon won’t let you price against 2nd or 3rd lowest FBA offers, but it does let you price above the lowest FBA offer, which is good enough.”
Saying this is “good enough” is like saying your archery methodology is “good enough” if you shoot your arrow with a blindfold on and just pay someone to yell at you when you’re aiming in the target’s general direction.
Yes, Amazon gives you the option to set a dollar amount or percentage amount above the lowest FBA price. And you can set the options a couple other ways to avoid chasing lowball FBA sellers, and avoid a pricing race to the bottom.
None of this matters if you can’t see the 2nd or 3rd lowest FBA price. You will always want to price in relation to other FBA offers. So in the absence of this information, you’re essentially taking a shot in the dark and repricing blind.
- Item: Book
- Amazon sales rank: 10,000
- Amazon’s price: $50
- Lowest MF: $3
- Lowest FBA: $12
- 2nd lowest FBA: $14
- 3rd lowest FBA: $35
How am I pricing this? Probably $35. Maybe higher. But it will always be in relation to another FBA offer – and not the lowest one.
Amazon’s “automated pricing” gives us options such as pricing $10 above the lowest MF offer, or pricing 70% higher.
But why is that helpful if I can’t even see what the 2nd or 3rd lowest (or 4th or 5th) FBA offer is? Pricing a dollar or percentage amount above is 100% useless If I don’t know what other competing FBA offers are. You’re just pricing blind.
It’s a blindspot that means you’re losing money a majority of the time.
What would a dream Amazon repricer look like?
Really, really simple: The ability to price against lowest, 2nd lowest, 3rd lowest, or 4th lowest FBA offer (and possibly beyond); and set these pricing rules based on sales rank.
There would be other things I would add, but I would be more than happy with this. Very simple.
Final word on the Amazon automated pricing feature
The only thing third party repricing software is good for is pricing your lowest demand items, in that sales rank strata where you’re not competing against FBA sellers – you’re competing against all offers.
If Amazon let us set pricing parameters based on sales rank, it would offer at least one advantage over 3rd party software (Ability to match lowest FBA offer + Buy Box offer + do both based on sales rank). But it doesn’t.
As it stands, for all the reasons I mention, Amazon’s new repricer is actually worse than third party software.
Its the same repricer-story: Too many blindspots, not enough options.
In conclusion: I know flamethrowers are expensive, but taking one to a pile of money will go a lot faster than letting Amazon “automated pricing” do it for you. So if you must destroy money, just go for the flamethrower.
Peter, I’ve been using this since it came out. I understand your points, but what are the options? I certainly can’t afford (and don’t want) a VA, and so the only other option is manual repricing. I only have about 500 books right now, and always having to manually reprice just that number would be overwhelming. I can’t imagine having to manually reprice thousands of books. That’s all you’d ever be doing from the time you woke up until you went to bed. For those of us who are not in the market for a VA or hiring somebody to do it for you, I don’t see any good alternative. Please tell me what the options are. Thanks.
Peter Valley says
In many situations it can literally be a better option to not reprice *at all* than to use a repricer. I have spent the majority of my Amazon selling career repricing manually (and am doing so now until I hire another VA). My pricing schedule is to do the poor demand items weekly, and the rest whenever I have the time. Not ideal, but better than repricing software.
Well all right then; I’ve decided to eliminate the Automate Pricing and just do it manually. For me, this will basically mean setting a price and then forgetting about it since watching all these prices continually would be the ultimate headache and source of boredom.
Mike Monticue says
Terry you can try the “Manage Inventory” page, set the sales rank to be visible, choose the price settings to “match lowest price in same sub-condition”. You can choose individual books to match or not. Using this you can then click through directly to the book listings if you are repricing a high-priced book or whatever; I use this for several thousand books and it works ok. Also helps to use dual monitors.
Parrish Patten says
What you just shared seems to make sense and is effective. I look forward to trying it out to see if it works for me. I am also looking forward to hearing Peter’s opinion about it. Thanks so much for sharing Mike!
I agree with you Peter. This repricer stinks overall. I find it so inconvenient to use I only use it on SKUs I have more than one of (replenishable SKUs). The way I get around the flaw you mention is to set my low price high. So for your example:
Amazon’s price: $50
Lowest MF: $3
Lowest FBA: $12
2nd lowest FBA: $14
3rd lowest FBA: $35
I would also be shooting for $35 so I would set the low price limit at $34.95 and then set the repricer to go a penny less than the low FBA price. Not the most satisfying solution, but it does the job. At least if the price goes up to $50 I will go up with it.
And my main complaint is how hard it is to use. It needs to be integrated into the inventory page so I can see things like rank, price, etc and reprice right then and there. I only have been using it on maybe 5% of my inventory. It just sucks too hard for most of the rest.
Peter Valley says
That is a partial solution, I agree. I’ll talk about that in my next article, where I cover the “good” ways to use it.
I also do not use it, but my reason is if I set a low price, and tell the repricer to “beat” the low price, if one other seller also reprices to beat the low price it would lead to the potential 1 cent offer by both of us. Other AZ options have similar drawbacks, as you pointed out
Not sure about the Amazon repricer, with which I have no experience, but most other 3rd party reselling software allows you to set a platform below which your pricing will not fall. Good repricing software also raises the price, which may give you a higher sales price. For instance, if I am selling a book for $11.98 and another seller beats me by a penny, and I beat him by a penny, the price will drop until I hit my platform – let’s say that’s $9.98. My competitor drops below that. He sells a copy at $9.97. The next higher price above mine is $18.00. As my competitor sold his copy, my software bounces my price back up to match the higher price (or beat it by a penny or a percentage, whatever my repricing parameters are), and I catch the next customer and make the sale at $17.99.
That’s assuming all else is equal, of course. I may make a sale before him because my condition is better, or is better described, or I have a better feedback record.
I went to a 3rd part repricing software this year after many second doubts, but my sales rate and profits both doubled as soon as I did. In retrospect, I wish I had done it earlier. I just couldn’t devote the time to manually repricing any more, it was driving me crazy as my inventory increased.
Peter Valley says
The fatal flaw here is that if that $18 offer is an FBA price (which it should be) and it’s not in the bottom 20 (which it rarely will be), the repricer can’t see it.
Peter, I started checking my listings to see if my repricer missed any FBA prices that weren’t in the bottom 20. I had to check about 30 books at random before I finally found one that didn’t have at least one FBA offer in the bottom 20. I finally found one, where the first FBA offer was up at position 25. And my repricer had found it and matched it. I’m not sure what’s going on there, unless it’s because I give my repricing software access to my account, so it’s able to pull up the information, just as I can. That would be my guess, at any rate. I’ve also set my settings to ignore any FBM sellers and only match FBA sellers, so maybe that is why it is finding them.
Peter Valley says
This change happened in 2012 is is fairly well documented. Here’s a sample link:
Richard Long says
I agree, Peter. It seems to me that Amazon’s primary goal is quick turnover of FBA inventory, regardless of whether the sellers make money or not.
Thanks for the article.
I took a look at the Amazon repricer when it first came out and I abandoned it almost immediately. The deal breakers for me were not being able to view sales rank and having to import each SKU in one by one. With over 6,000 book in inventory and more being added every day the entire process is too cumbersome. I could see it being a useful too for a seller with a low number of SKUs and higher stock quantities but for the used book seller where the bulk of our inventory is one copy of one SKU it’s worthless,
Peter Valley says
I wanted to keep my grievances to a minimum, so I didn’t even cover having to add each SKU one by one. Totally time prohibitive. Agree.
So what do you do, Alan? Do you use a repricer?
Phill Calle says
Although the repricer certainly has its flaws, which you covered well, Peter, I think that you and some of the commenters are too focused on what’s missing rather than what works.
First, like a lot of sellers, I have a large inventory. So the way that I price is to set a price and leave it there. I only manually reprice textbooks and those books that seem stuck. Doing anything else is too time consuming. When I price my books, I enter the lowest price I would accept at that moment for the book. I can enter that information in again for the repricer, leaving that price as the floor. Is it worth the hassle? I think it is because by doing so I can put those books into a group that has a rule that allows for an increase in price.
Second, even if you do not trust the repricer (or don’t trust it for certain books), being able to put books or other items into groups will make your manual repricing go quicker. You can set your floor and ceiling for a particular book to be the same, so the price you picked initially will never change until you change the floor and ceiling in the repricer. I know a lot of us use SKUs for this: We add “text” or “txt” to a SKU to make it easier to find our textbooks when we reprice. Now we can just add them to a group created by the repricer, so we can have them all in one place when we reprice manually.
I do think that Amazon’s repricer has tremendous room for improvement, but for a product in Beta, I like what I see.
Honey Wesley says
Um, Peter, looks like you just spelled out very nicely the plans you need to take to a programmer to have the “Zen Repricer” created! Just sayin’…
Peter Valley says
Believe me, if it were possible it would have been done already. Amazon restricts FBA data, simple as that.
Mike Monticue says
Everything Amazon makes to supposedly help sellers is crap. I wish they could just add some parameters to the “Manage Inventory” page “Match Lowest Price” feature such as ignore “Acceptable” Condition, block specific Mega-Sellers, see # of offers, etc… it wouldn’t be perfect but it would help the speed of repricing by hand.
Karl Kranich says
I manually reprice using a Google spreadsheet that takes some of the Amazon reports and generates a list of links to the FBA offers for each of my SKUs and links to a price edit page on Seller Central.
I’ve wondered if others would be interested in the spreadsheet, or if others have a better way of handling manual repricing.
If you manually reprice, how do you streamline it?
Brandon Letosky says
Hi, I know this comment is unrelated to this topic, but do you have any advice or news on what to do with long tail items now after Amazon just announced that they are now charging Long Term storage fees on every unit after 6 and 12 months?
Hah, I just posted the same question!
This is really bad news. I find it amazing that Amazon would even do this, because they have to know this will kill used books on the platform. But maybe that’s their plan…
Brandon Letosky says
Haha booksellers think alike!
It will for sure kill the used book market, especially anything that is over 1,000,000 rank wont even be worth sending in, maybe get away with up to 1,500,000 but that’s stretching it. With the fees there planning on instituting it is going to be catastrophic. The only solution may be going to Merchant fullfilled for long tail tail items which would create an unbelievable amount of additional work and stress…
Peter Valley says
I disagree with this strongly, and I’ll post thoughts in full (including math to back it up) shortly.
Awaiting this one. I make a living at long tail. Everything I sell is between 1-16 million. Sometimes it takes 2 years for me to sell a book. Amazon has been great, but what I noticed in the last 3-4 months is that I’ve had to lower prices a whole lot. So many FBA sellers are bringing their prices down to absurd levels (why are there even books for $3-4 FBA???) If I have to pay longterm storage fees for thousands of longtail books, it would kill the whole thing…
So yeah, Peter, can’t wait to get your thoughts!
Alice Richards says
I hope you do this soon. The free removal period is up in 13 days, and the way it stands I’m thinking of removing most if not ALL of my FBA stock … thousands and thousands of books.
This kills FBA for books and long tail. Looking at what we have, our bill in Feb will be for thousands of dollars.
I’m not going to go back to FBM, either. I’ll look at selling books on another platform.
If we all leave Amazon, what will that mean for Amazon customers? Most book buyer love the convenience of Prime. But everyone is getting out.
Please, Peter, let’s hear your thoughts!
Notice how it didn’t kill ised books.. only helped them
This is all good, but the news I just got about Amazon ending the long term fee assessment for single items is so huge I can’t think about anything else. Any thoughts? If this is true it will kill FBA for books and just about everything else overnight.
Didnt kill nooks at all… Only helped them
alivelaugh @amazon says
So what do you do, Alan?