I used to be one of them. This is why I stopped.
You’re listing a copy of Hedge Funds for Dummies. The lowest Fulfillment by
I used to be you. Now I’m on the other side of the country, looking at your listing, and cursing you. I’m going to tell you why.
The #1 Commandment of Selling with Fulfillment by
“Thou shalt not underprice any FBA seller.”
Chant it. Repeat it. Live it.
I think this is so important, I dedicated three pages to declaring it in my first book
I had to write this article because the past month has been the worst. This last textbook season (which just ended) had me feeling hopelessly plagued by shortsighted FBA-price-undercutters.
No one can say these people are just practicing “smart business,” because their practices translate into less money for everyone (as I’ll explain) – not just me.
This season, I probably had more textbooks in inventory than any year ever. August and January are always my biggest months.
As I obsessively repriced my textbooks over the last month, I watched book after book get underpriced by 1 or 2 cents, and found myself constantly yelling to the heavens:
Who are these people?! What are they thinking?!
Truth was, at one time, they were me.
My secret life as a foolish, shortsighted underpricer
Four years ago, I did what a lot of people do when listing books on
And the next week, when I went through and (manually) repriced, I found the lowest price was now $9.95. Naturally, I repriced to $9.93. And so on.
And if I happened to revisit my newly-repriced books a few hours later, very often they were already underpriced by 1 or 2 cents. And so I followed suit, leapfrogging towards penny-book-status.
How one bold FBA seller shamed me into sanity
One day I was repricing and underpricing everyone like I always did, and within an hour received an email. It was from one of the sellers whose books I had underpriced. It went something like this:
“What is wrong with you?! Pricing your book one penny less than other sellers is insane!!! Sellers like you are ruining
Amazon!!! This is insanity!!! Be responsible and match the lowest price! If sellers like you keep acting this way, soon all books will be a penny and no one wins!“
This sounds like an overly-dramatized recreation, but it really was this hostile and riddled with exclamation marks.
But despite the tone, it got to me. He was right. It was totally insane.
So I stopped.
And only when I stopped underpricing other
Why you should never underprice another FBA seller
1. You create a race to the bottom.
You underprice by a penny. The next guy manually underprices you by a penny. The next guy’s repricing software is set to underprice you by a penny every hour, and so on. Instead of three sellers each waiting their turn and getting $10 for a book, they each get $5.
And by the way: They didn’t get that $5 any more quickly than they would have gotten the $10. They just think they did.
2. You’re in business to get the most money, not the quickest sale.
And desperately underpricing everyone is in direct odds with this mission.
Bringing us to…
3. Underpricing is predicated on a false assumption.
The assumption is: “The more often I underprice other sellers, the quicker I’ll get the sale.”
As I’ll explain below, this just isn’t true.
4. You are triggering repricing software that will destroy you.
A lot of sellers have repricing software set to match (or underprice) sellers every hour. And if you or any other seller is doing the same thing, watch the prices plummet…
Sure there are settings to prevent every book from dropping to a penny, but why trigger an accelerated march in that direction?
5. You’re not a drug addict.
No one should be this desperate to get the next sale. You’re (hopefully) not a drug addict. It shouldn’t matter that much.
Remember: You don’t need to be the next sale. You don’t want to be the next sale. You want to be the highest priced sale.
Why you should instead match the lowest price
Actually, there are many occasions where you should price higher than the lowest price. I estimate I price about 25% of my listings higher than the lowest FBA price when I think they’re too low, and wait my turn. But this is not meant to be an extensive tutorial on pricing…
When you match the lowest FBA price, you still have a 50/50 chance of getting the top spot.
And you didn’t have to sacrifice your dignity to get it. You didn’t have to contribute to the deadly “race to the bottom” to get it. You didn’t have to contribute to making FBA unprofitable for everyone to get it.
But let’s say you matched the lowest price and didn’t get the top spot.
First of all: Who cares? It’s not a race.
That aside, not getting the top spot doesn’t mean not getting the sale. Buyers will see there are two equally-priced FBA offers, and make a decision based on condition, feedback, and the product description.
Underpricing to get the Buy Box?
You’re probably wondering about the Buy Box. It’s a common myth that the Buy Box goes to the lowest priced offer. That’s just wrong.
The majority of all sales come through the Buy Box. So if underpricing by 1 or 2 or 10 cents won’t get you the Buy Box, what exactly are you trying to achieve?
To recap: There is no reason to think your offer will sell any faster because it’s priced 2 cents lower than the next guy. And there’s no reason to think it won’t sell next because it’s not the lowest.
Underpricing is a lazy and ineffective practice based on a false assumption.
It’s really easy to just match the lowest FBA price
Go into the “All Inventory” page, select Manage Inventory, and under the settings, select “Listings with Same Fulfillment Method.” Then go through and when you don’t see a green check mark, click “Match Price.” Easy.
Don’t get me wrong: There are times when I will underprice
Basically, if I see a competing FBA offer that is at odds with my pricing formula, I won’t hesitate to underprice them.
For example, a really poorly ranked book that is priced significantly more than $3.99 higher than the lowest merchant fulfilled offer. I don’t think that’s an intelligently priced book, and I’ll price as though it didn’t exist.
There are other examples. But in most cases, I won’t do it.
Remember the Golden FBA Rule
“Do unto other FBA sellers as….”
The #1 reason is to maintain a basic code of FBA decency, so Fulfillment by
In the book category on
And if we don’t all do our part, FBA will be next.
As Fulfillment by
This lengthy editorial is my small part in keeping FBA profitable for everyone.
So… Just match the lowest FBA price and no one gets hurt.
Does anyone here live near a Hastings? They’re this cool used (and new) book / music / video game / DVD chain that only operates in small to midsize towns (no cities). There’s a few dozen of them all around the Western 2/3 of the US.
They had a labor day sale where I made an absolute killing. All used books – no matter the price – were “5 for $20.” Seriously, they were letting $30 textbooks go out the door for $4. It was insane.
I wanted to send out an email about this, but by the time I caught on to it, it was too late. But keep it in mind for next year.
Thanks to everyone who cast their vote in the last post for what to do with the six hours of sourcing footage I took.
As a refresher, I talked about how a friend and I got six hours of raw book sourcing footage, and documented what ended up being a $1,000 day. And then how I was concerned if I released the whole thing, everyone would be so bored by the end they wouldn’t watch it.
Here are the results:
- Release the full six hours: 74%
- Edit it down to 90 minutes: 26%
I’ll defer to popular opinion here and put out the full six hours. As to exactly how that will work and in what format, I’m still deciding. (Feel free to comment below with thoughts).
Thanks for the input.