Every factor to consider when pricing books on Amazon: Condition, Best Seller Rank, pricing history, more.
Video: The 7 Factors of the right price
Every pricing decision is based on multiple factors. We’re going to break down every piece of data you need to review in order to set an optimal price.
Whether you’re setting the initial price, or repricing, the relevant data you need to defer to is the same. Some of these are more important than others, and some may only apply to certain product categories. When I’m pricing/repricing my book inventory, I always consider all of these.
Your thought right now might be: Wait, I need to review seven different data points before I can set a price? In practice, this isn’t that complicated. And I’m going to make this very simple.
Pricing Factor #1: Sales Rank aka Best Seller Rank
“Sales Rank” is defined either as the period since a product has last sold (for Ranks of a higher number), or how many units it has sold that day (for Ranks of a lower number).
For the benefit of those who don’t know how Rank works, here’s a quick rundown. Let’s use the Books category as an example. When a book sells a single copy, no matter if it’s current rank is 10 million or 200,000, it’s “best seller rank” jumps to around 150,000. That’s about the average Rank of a book selling an average of one copy per day.
From that moment forward, the Rank begins to drift upwards (to a higher number) slowly, until it sells another copy. At which point it starts the journey all over again.
And what if a book is selling multiple copies a day? When you see an average Sales Rank of (roughly) better than 100,000 to 150,000, that indicates the book averages more than one sale per day. The numbers become difficult to estimate with any accuracy, but as an example, we can confidently say a book with an average Sales Rank of 30,000 is selling multiple copies a day.
It’s important to understand that Sales Rank means something different in each of the 20+ Amazon product categories, since each category has a different number of total items. But whatever the category, if you understand Best Seller Rank, you can always look at that figure and get a rough estimate of how often that item is selling (Sales Rank cannot be interpreted precisely).
With all this in mind, here’s a fundamental pricing rule that is key to understand:
The better the Sales Rank, the more boldly you can price.
It’s incredible how common it is to see sellers ignore Sales Rank in their pricing and repricing. Even crazier, almost no repricing software allows you to set repricing rules based on Sales Rank. Pretty staggering.
Stop and consider: Does it make sense to price an item that is selling 10x a day the same as an item that hasn’t sold in 10 years? Most sellers do exactly this.
To use the two extremes, lets say you have a book ranked #1 on Amazon. That book is selling thousands of copies a day. It almost doesn’t matter how high you price it (up to Amazon’s price, which is always the ceiling). It’s going to sell. The sales volume makes it inevitable.
Now let’s say you have a book ranked 10 million. That book hasn’t sold in years. Whether you’re an FBA or FBM seller, even matching the lowest price might be too high. If the book hasn’t sold in years, it needs all the help it can get. And a dramatically lower price may be called for (depending on what the Keepa charts reveal).
So while Sales Rank isn’t a crystal ball that will tell us when a book will sell again. Just because something sold seven days ago, doesnt’ mean its going to sell every seven days. But it’s the only data we have that gives us a clue.
With a very high demand item, it may mean pricing your FBA offer far above all the lowest competing offers. With a very low demand item, it may mean pricing below the lowest overall price. But Sales Rank is always central to every pricing decision.
Pricing Factor #2: Sales Rank History
This is actually more important than Sales Rank. If you have access to Sales Rank history, ignore current Rank and defer to this entirely.
Let’s go back for a second. Remember when I explained that a book with a Sales Rank of 300,000 could have been ranked 10 million this morning? Sales Rank is just a snapshot in time, and can be deceiving.
Sales Rank history, however, is a different story. A simple graph showing the sales history for an item is much more useful than current Sales Rank. If you have access to such history, you can ignore the current Rank and focus entirely on its historical patterns.
The tool I use for this history is Keepa. There are others. Keepa displays Sales Rank graphs on the product pages for every item on Amazon. Extremely convenient. This is a paid feature, but it pays for itself.
You can see the average Sales Rank. You can see the worst Sales Rank in a given time frame. And you can see the highest an item has been ranked. All of this is extremely useful in making precise pricing decisions.
Pricing Factor #3: The Merchant Fulfilled price
Whether you’re an FBM seller or not, the Merchant Fulfilled price still matters.
If you’re an FBM seller, the MF price matters for obvious reasons – those are your competitors.
If you’re an FBA seller, the MF price still matters because it’s a starting point in establishing the lowest your FBA price should be. If you’re an FBA seller and you plan to price a high-demand book $15 above the lowest FBM price – you have to know what that FBM is in order to price $15 higher. The Merchant Fulfilled price is a starting point.
Remember there is a Sales Rank threshold above which you’ll want to consider ignoring FBA offers completely and only competing with FBM offers. So for poorly ranked products you’re listing FBA, the Merchant Fulfilled price is relevant for the same reason it’s relevant for MF sellers: Those are your competitors.
Pricing Factor #4: The FBA price
Of course, this is relevant for FBA sellers only.
For products of medium-to-high demand, you are ignoring FBM prices entirely and only competing with FBA offers. There’s enough sales volume for these products that you can afford to lose some potential sales (to buyers who are interested in the cheapest offer only) and wait for a buyer willing to pay more for an FBA offer. There is no need to price-match a FBM offer when demand for an item is strong.
Pricing Factor #5: Amazon’s price
“Amazon’s price” refers to the price that Amazon is selling this ASIN for if you buy from them directly. Amazon isn’t selling everything (or even most things), but when they are, it’s essential to acknowledge their price.
The reason is simple: Amazon’s price is always the ceiling. You cannot price higher than Amazon and get a sale. It’s theoretically possible, but highly unlikely.
Every customer on earth would prefer to buy from Amazon over you. You may have a great feedback score. You may have a cute store name. But you’re always going to lose to Amazon. Everyone knows Amazon. They don’t know you. Familiarity and trust always wins.
That means you can only compete against Amazon on price. Nothing else.
Pricing Factor #6: Condition
Condition is a factor in how you price, and how quickly your item will sell, however not to the extent most sellers think.
How does condition affect pricing? Here’s a few notes:
- There is no significant difference in sales between Good, Very Good, and Like New conditions.
- Therefore, no matter what the condition of your item, you should consider Good, Very Good, and Like New offers competitive, and price accordingly.
- Acceptable condition offers sell better than most sellers think.
- No matter the condition, for FBA sellers, condition is not a sound justification for underpricing another FBA seller.
The only condition you may consider factoring in is Acceptable. What if you’re selling a Very Good condition offer – should you ignore Acceptable competitors? What if you’re selling an Acceptable condition offer – should you underprice better-condition competitors?
There’s no data-driven answer to this, but my experience strongly indicates you should consider Acceptable condition competitive to all other offers in most instances.
A couple of possible exceptions (but I would not suggest taking these very seriously):
- If you’re selling an Acceptable condition offer, and the demand is low, you might price your offer more conservatively than non-Acceptable offers. Sales aren’t coming around that often, and its possible you lose sales to better-condition competitors.
- If you’re selling a non-Acceptable item, you might consider ignoring Acceptable condition competitors. There’s enough sales volume that you will still capture a higher-price sale from buyers who feel strongly against purchasing Acceptable condition offers.
Keep in mind that Acceptable condition offers can still get the buy box.
Acceptable condition is not the same as an item not being for sale at all. This is the mistake many sellers make. Don’t bid yourself down based on false assumptions.
Pricing Factor #7: Subcategory of product
There are market forces within each category that can influence your pricing subtly in different ways. Personally, I am only knowledgeable of these subcategory differences in the Books category. While I believe every category has their own version of the Book subcategories I’m going to outline. In other words, each category probably has certain products you can price higher as an FBA seller than other products.
(To invent an example out of thin air, I suspect that in the Toys category there are products that are mostly purchased last minute for travel. Games for the car maybe? And because they are time-sensitive purchases, FBA sellers can command crazy FBA prices. Just a theory.)
Of all the Pricing Factors, this one is the least important – and hardest to learn. So do not worry if this is over your head.
Here are subcategories in the Books category that have unique pricing characteristics:
- Textbooks: the vast majority of textbook sales go to FBA sellers. They are very time sensitive purchases. Professors assign a syllabus, and students have only a few days to obtain the book or risk serious consequences.
- Audiobooks:I don’t know what this is, but I’ve had a terrible time commanding an FBA premium for audiobooks.
- Travel books: Like the Toys example, people buy these last-minute and need them to arrive by a certain date.
Again, don’t take this one too seriously.
In conclusion
This is one of the most important concepts in the Amazon pricing strategy.
You should be considering – to one degree or another – each of these factors in your pricing and repricing decisions.
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