Huge master guide to Amazon pricing & repricing

Super in-depth look at pricing & repricing for Amazon sellers: Pricing strategy, how to reprice inventory, how to set a price, how to choose a repricer, and tons more.

On Amazon, pricing is (almost) everything

At a high-level view, Amazon businesses are really simple. It comes down to two things:

1. Sourcing inventory
2. Pricing/repricing

That’s it.

If you master those two things, it’s impossible to lose money on Amazon.

You neglect everything else: Cut corners with your condition notes, be sloppy with your accounting, totally ignore returns and reimbursements, etc. And as long as you consistently source profitably inventory and consistently price/reprice it intelligently, its impossible to not make money.

This is why I tell all Amazon sellers: Ignore everything until you master these two things.

What follows is a complete guide to literally 50% of your business: Mastering the science of pricing & repricing.

Pricing cures all Amazon problems

So if everything comes down to sourcing & re/pricing, it would logically follow that you can fix most issues in your Amazon business by focusing on sourcing and re/pricing. When you fix issues in these two areas, magically your business becomes healthy.

But how do you know if you have a pricing issue you need to fix?

If you’re getting low or no sales, it’s literally going to be one of two things:

1. Bad pricing
2. Low demand inventory

The biggest clue that you could have a pricing issue is that your inventory isn’t selling. But to be sure, you have to rule out that you simply have a glut of low-demand inventory. How do you do that?

Stocking low-demand inventory is easy to diagnose: You just look at the sales rank column inside your “Manage Inventory” page. If your items have poor Sales Rank’s, there’s your answer. Unless you’re very new to Amazon selling and have completely ignored Sales Rank in your buying decisions, you’re already going to know if you have a Sales Rank issue.

Ruling that out, low sales is always going to be a pricing issue. You may think your items are priced correctly, but what you think is irrelevant. The market is speaking. And if you’re not getting sales, then you have your answer: There’s a pricing issue.

How to confirm you have low sales cause by bad pricing

Maybe you think you have low sales, but you’re actually just expecting too much.Maybe your sales are exactly where they should be, given your inventory size. How can you confirm?

You’ll know if you have a sales issue if your current sales deviate from generally accepted benchmarks. Here’s a couple:

Sales Health Check #1: The 1% Rule

This rule holds that you should generally sell about 1% of your inventory each day.

Selling significantly less than that? You may have a problem.

Sales Health Check #2: The 30/60 Rule

This “60” part of this rule holds that you should sell roughly half of any shipment in the first 60 days.

Selling significantly less than that? Another sign you may have a problem.

These rules have been observed for years in the Books category. Of course this will vary wildly depending on the demand for your inventory, and the product category you’re selling (if it’s not books).

But assuming that you’re selling Books, and your inventory isn’t well below average in demand, your sales should be within stones-throw of these estimates.

Are your sales falling well below these estimates? Then you really need this article.

The two sides of pricing: Setting a price, and repricing

Amazon pricing has two parts:

1. Setting your initial price (the price set when you list something for sale).
2. Repricing (editing your prices after creating a listing).

These are very different things (and one is much more important than the other). Let’s give an overview of each…

Setting your initial price: Overview

This is the first price you set when you list an item for sale. There’s two places to set your initial price:

1. Amazon Seller Central
2. 3rd party listing software (I use Scanlister)

Note that your initial price isn’t necessarily the price that your item will be selling for when it goes live. If you’re an FBA seller, you have the option of editing your price at any point after you ship your items, but before they are live for sale.

As an FBA seller, how much does your initial price matter?

Since you can edit your price after you ship your inventory, does it matter what your initial price is? This depends on if you’re using repricing software or not (if you’re no familiar, we’ll cover repricing software in a minute).

If you’re using a repricer: Your initial price perhaps doesn’t matter much. Many sellers adopt the strategy of setting a random, really high price when they create a listing (just in case inventory goes live before their repricer gets to it), then letting their repricer do the work of setting a more precise price before it goes live.

If you’re not using a repricer: Your initial price matters – a lot. The price you set when you create the listing is the price that your item will be when it goes live (unless you want to create extra repricing work for yourself). That you have to be comfortable selling your item at the initial price. So you don’t want to be hasty with setting it.

Repricing: Overview

Repricing is the act of editing your inventory prices after you create the product listing (usually after it goes live for sale on Amazon).

Repricing is tied with sourcing for being the most important part of your Amazon business.

The reason is simple: Prices go up and down at a crazy rate on Amazon. So you must constantly be updating your prices (both lowering them and raising them) so they stay competitive and you get sales.

Repricing is done in one of three ways:

1. Manually: Repricing by hand inside Seller Central.
2. Amazon’s Free repricer: Comes built-in with a Professional selling plan.
3. 3rd party software: One of the 30+ paid repricing tools available.

I will cover each of these in-depth later in this article.

Overview of pricing strategies

“Pricing strategy” simply refers to the formula you apply when you’re setting your initial price, and repricing. Since there’s no one “right way” to reprice, how do you decide what price to set? The answer is to get clear on your desired outcome, then choose a pricing strategy around that outcome.

Note: This isn’t as simple as picking a strategy that “gets the highest sales,” nor is it a matter of one that “gets the highest profits.” Both of those extremes come at a big cost, and will put you out of business almost immediately. The best strategies strike a balance between those two things.

Here are a few basic (very basic) strategies. I will share these with the disclaimer that you shouldn’t pick one at random. Pricing strategy is a high-stakes decision.

FBA pricing strategy

Pricing based on competing with other FBA sellers only. With this strategy, you are either completely or partially ignoring Merchant Fulfilled (MF) competitors, and pricing your offer against other FBA offers only.

Lowball pricing strategy

The simplistic strategy of chasing the lowest offer until you get a sale.

Buy Box pricing strategy

The popular strategy of matching (or underpricing) the Buy Box offer. This is based on the belief that most sales happen through the Buy Box, and that the seller who can “win” the Buy Box has the greatest chance of getting a sale.

Top 7 rules of pricing strategy

These seven concepts will give you an adequate understanding of how to best price your inventory.

If you don’t understand these seven things, you’re at risk of either:

1. Choosing a strategy that is too basic, and leaves money on the table.
2. Having no strategy, and pricing basically at random.

Both of these are very bad, so let’s arm you with what I call “the 7 principals of pricing strategy.” Once you understand these seven things, setting a good price becomes intuitive quickly.

Pricing Strategy Principle #1: Pricing is a balance between sales and profits

Pursuing the quickest sale inevitably means you’re pricing your inventory too low. And chasing the highest profits inevitably means pricing your inventory too high. The “right price” is always a balance of these two.

Pricing Strategy Principle #2: If item is not repriced, it’s effectively not for sale.

The prices of your competitors begins to change the moment your item goes live. Once you’re buried by a few competitors, your inventory becomes invisible. And if its invisible, it may as well not be for sale at all.

Pricing Strategy Principle #3: You should (often) price higher than lowest competitor

You are not a slave to the lowest price. Sales can (and do) come by pricing above the lowest priced competitor. Not understanding this is one of the top pricing mistakes sellers make.

What factors matter in setting a price

Those are the higher-level concepts. But what is the specific data you should be referring to when deciding on a price? Each of these data points have a role in determining the price you set.

#1: Sales rank / Sales rank history

How often is this item selling? The slower it’s selling, the more conservatively you want to price (to make sure the next person who buys this item, buys your offer).

#2: Lowest Merchant Fulfilled price

Whether you’re a Merchant Fulfilled seller or not, this is the starting point for determining what price you set.

#3: Lowest FBA price (if you’re an FBA seller)

Selling FBA? You need to know your lowest-priced competitor. You may not choose to match it, but this is a starting point to determining your price.

#4: Higher prices (above the lowest, MF or FBA)

Particularly for higher-demand items, it often makes sense to price above the lowest priced competitor. Reviewing at least the lowest three prices is necessary for most inventory.

#5: Buy Box price

Optional, but if you practice a Buy Box-based pricing strategy, you’ll want to know the Buy Box price.

#6: Amazon’s price

You can’t price higher than Amazon (if you want to get a sale), so Amazon will represent the upper-limit of what price you can set.

#7: Product type & category

Pricing forces can affect product types and categories differently.

#8: Condition (of your product & competitors)

Condition can impact how aggressively or conservatively you price an item. It can also cause you to ignore certain competitors.

Case study: How to price an item on Amazon

Let’s walk through the process of setting your initial price when listing something for sale.

Step #1: Know your outcome

What’s most important to you? Sales volume, or margins?

You have to make a decision, since this will inform the price you eventually set.

Best way to answer this question is: “In regards to sourcing, which do you run out of first – money or inventory?”

If you run out of money first, go for sales. If you run out  of inventory first, go for margins.

Step #2: Is this item even profitable?

You should already know the answer, or you wouldn’t have acquired the item. But just to get this out of the way: Confirm the item is actually profitable to sell, after all Amazon fees.

Determine this by simply looking at the lowest competing price and doing the rough math (or let your listing software tell you).

Step #3: What is the sales rank?

The demand an item has should form the backbone of any pricing strategy.

Now that you have the Rank – hold that thought. It’s going to matter when you finally set the price.

 

Step #4: What is the product type or category?

Some categories and product types can command higher FBA prices than others (if you’re an FBA seller).

For example, in the Books category, I might consider:

• Is it a New book?

• Is it a textbook?

• Is it an audiobook?

• Will this book be obsolete quickly?

• Etc

If you don’t understand the product category well enough to know if this will impact pricing, skip this.

Step #5: What is the pricing history for this item?

This is most relevant in two scenarios:

1. items with a small number of competing offers
2. high-demand items

If one of those two things apply, look at the pricing history. You may be able to completely ignore competing offers, and set a price based totally on the pricing history. In other words, the current prices may be well below the average price.

Pricing history is best revealed by will be revealed by installing the Keepa browser extension, and viewing their pricing history charts.

Step #6: Set your price.

You now have all the information you need to set a price. Now it’s time to make a decision.

Here are some of your options:

1. Match lowest price
2. Price against 2nd lowest
3. Price against 3rd lowest or beyond
4. Pricing against the Buy Box
5. Setting your own price (below all competition)
6. Setting your own price (rare – when there’s no competing offers)
7. Pricing against Amazon’s offer only

All pricing decisions will fall into one of those seven categories.

Understanding “high pricing errors”

After you went through the process of setting a price that makes sense to you, Amazon may disagree and hit you with a “high pricing error.”

 

What is a “high pricing error”? These happen when Amazon decides your price violates their (secretive) “fair pricing policy” and deactivates your listing temporarily, until you lower your price.

When this happens, you have to go to your Pricing Health page, and lower the price until you hit a price Amazon will accept. And no, they won’t tell you what price that is. You just have to guess.

If you get hit with a high pricing error, you didn’t do anything wrong. And your account won’t be suspended. You just need to manually edit your price to get the item reactivated.

The steps to fixing high pricing errors

1. Navigate to the Pricing Health page.
2. Drop your price. Be careful to not do anything too desperate and drop the price too much. You might drop it a few cents at a time until you hit a price that Amazon will accept. Or if you’re shorter on time, you might make more abrupt price drops. But if you drop the price too much, you’re leaving money on the table.
3. Wait. If the price isn’t low enough, it will deactivate your listing again in a few seconds.
4. Repeat until your offer is live again.

The top nine pricing mistakes

Even after all this, you’re likely to still not be sure if you’re “doing this right.” Avoiding these nine mistakes will prevent any major mistakes.

Pricing intelligently is as much about what you don’t do, as what you do. If you can avoid these nine mistakes, you are well ahead of most Amazon sellers.

Why repricing is necessary

This is one of the most important concepts in an Amazon business.

As soon as you list something for sale, prices start to change. Maybe a competitor drops their price below yours. Then another competitor does the same. Soon you are no longer competitively priced, and no one is seeing your listing.

And what’s crazy is: all this can happen in a matter of hours (even minutes).

Here’s another scenario: You list an item on Amazon. And your nearest competitor sells their offer. You’re still the lowest price, but suddenly there is a big gap between your offer and your next-closest competitor. Maybe that gap is now $1 (or $5 or $10). Suddenly you have an opportunity to raise a price.

The point is: Things are changing on Amazon constantly. And repricing is necessary to address the price fluctuations that happen on Amazon constantly.

If there is any part of you thinks repricing is optional, or a secondary part of an Amazon business – discard that notion immediately.

Repricing is not optional.

The three types of repricing

Now that you understand the “what” and the “why,” let’s get into the “how.”

I break repricing down into three categories:

1. Manual repricing.
2. Amazon’s “Automate Repricing.”
3. Third party repricers.

Manual repricing: overview

Otherwise known as repricing by hand. This is where you go to the Manage Pricing page inside Seller Central, and edit your prices one at a time.

The advantages to manual repricing:

• Increased precision.
• It’s free.

Disadvantages:

• It takes a long time.

I’ll detail a step-by-step process for manual repricing in a minute.

Amazon’s “Automate Repricing: Overview

For Amazon sellers on the Professional (paid) plan, you get access to a free built in repricer, called simply “Automate Pricing.” It’s a “free” repricer that comes with a big cost.

Advantages to “Automate Pricing”:

• It’s free.

Disadvantages:

• Missing fundamental features (like repricing by sales rank or product category).
• It forces prices down.
• It exists to further Amazon’s agenda (not generate you profits).

Here’s a quick list of the reasons I do not recommend using Amazon’s free repricer (and believe it will cost you more than it will save you):

1. You can’t set pricing rules based on Sales Rank
2. You can’t set pricing rules based on product category
3. You can’t search (and set rules) by partial SKU
4. The “Price Above” and “Price Below” options don’t consider competing offers
5. It only lets you compete against the lowest priced offer
6. It doesn’t let you exclude Acceptable condition offers
7. The Buy Box options make no sense
8. It forces you to drop prices (not raise them)

My theory is that Amazon created Automate Pricing to bait sellers into a trap of sorts, so their inventory is limited to being repriced in a way that Amazon prefers (low prices) vs generating the most profit for sellers.

Third party repricers: Overview

There are over 30 software tools that automate the repricing process for you (and all of them are better than Amazon’s free repricer).

While they have a huge range in their features, there isn’t a huge range in how they actually reprice your inventory.

I’m giving you a full list of current repricers, and how to choose the best one at the end of this section.

How to reprice your inventory by hand

Let’s say either your inventory is too small to justify paying for a repricer, or you don’t like the limitations of existing repricers, or you’re just frugal to an extreme degree (like me). Here is a short guide to repricing manually:

Step #1: Set up your Manage Pricing page

Make sure these columns are visible:

• Sales Rank
• Price
• Lowest Price
• Available
• Product Name
• Status

Sort the page by either:

1. “Old to new” (sorts oldest inventory at the top)
2. “Price: High to low” (sorts highest-priced inventory at the top)

Pick whichever you prefer. This lets you give priority to either older inventory (that you want to move) or high priced inventory (that will result in the highest payouts). Either choice is fine.

Step #2: Start repricing line-by-line

If you have more than 100 items in your inventory, it can be challenging to reprice every item every day. So I suggest a tier system, based on demand:

• Tier #1: Low demand inventory (ranked worse than 1.5 million): Reprice daily.
• Tier #2: Medium demand inventory (ranked between 100,000 and 1.5 million): Reprice as often as you can.
• Tier #3: High demand (ranked better than 100,000): Reprice weekly-to-rarely.

Here’s the process to repricing:

1. Click the Product Name to open the Amazon product page.
2. Click to view competing offers
3. Filter by Prime (if you’re an FBA seller)
4. Look at the Keepa price and rank history charts
5. Edit the price
6. Save your changes

That’s the process for repricing for free, with no paid tools.

List of Amazon repricing tools

There are literally dozens of automated repricing tools. This took a lot of work to compile, but here is a nearly-complete list of all known repricers, sorted (roughly) from least expensive to most.

• RepriceIt
• NeuroPrice
• RepriceIQ
• Bquool
• Alpha Repricer
• Ki Magic
• Repricer AI
• Channel Max
• Seller Republic
• Seller Champ
• StreetPricer
• Profit Protector Pro
• Reprice Hub
• Repricer
• Aura
• LogicSale
• Ecom Repricer
• SellerKit
• Flash Repricer
• Profit Reprice
• SmartRepricer
• Informed
• Seller Engine/Sellery
• Eva
• Seller Dynamics
• Seller Active
• Seller Snap
• Feedvisor
• Wiser
• Solid Commerce
• Operation ROI

How do you choose a repricer?

As we just saw, there are a staggering number of repricing tools. How is it possible to choose just one?

Good news is, I have tested out the majority of them. And I’ve developed a well-rounded look at what separates the good from the bad.

Let’s get one main point out of the way: Most repricers work basically the same. Some have a lot more features than others. But there’s not a lot of difference in terms of how they actually translate into increased sales or profits. And since most repricers work the same, I’m not going to list criteria that apply to most or all repricers (since that wouldn’t make picking one any easier).

So the list that follows is a short summary of things to look for that applies to very few repricers. These things are rare, but indicate a repricer will either make you more money, or are generally well-thought out and serious tools.

Repricer Criteria #1: You want a repricer with no blindspots

Repricers that depend on Amazon’s API are subject to two significant blindspots. These blindspots result in prices that are either set too low, or inventory that is ignored altogether (because the repricer can’t “see” certain competing offers. This is a serious issue that you probably haven’t heard about, because repricing tools would prefer you never find out.

The two blindspots are:

1. FBA Blindspot: Any FBA offer not included in the lowest 20 priced offers is invisible to your repricing software. This affects a lot of inventory.
2. Bundle Blindspot: No repricer can confidently repricing against any offer other than the lowest priced offer. That means the 2nd and 3rd lowest (and beyond) competitor is not visible to your repricer. Which forces you to only compete with the lowest price, which drags prices down.

As of this writing, there is only one repricer that can claim it is not subjected to blindspots created by Amazon. If this is important to you (and I argue: It should be), then this simplifies your decision making process.

Repricer Criteria #2: You want a repricer that is simple

After trying out most repricers, the biggest shock to me was how pointlessly complicated nearly all of them are. There is simply no reason that repricers need to have dozens of features spread across multiple pages and tabs. The complexity makes hacking through most repricers almost impossible.

Any repricer that forces you to navigate through multiple pages of settings or learn an entire new glossary of jargon in order to use it should not get your business.

Repricer Criteria #3: You want the ability to reprice by key non-blindspot fundamentals

Every repricer I’ve tried has the ability to reprice based on certain, basic fundamentals (such as the lowest priced competitor, or the Buy Box offer).

What is shocking is how many of them don’t let you reprice by other bare-minimum fundamentals – repricing options that seem to be missing from the majority of tools. These are omissions that are not caused by any Amazon-imposed blindspots, and instead are due only to the poor design of these tools.

Here’s a couple of examples:

1. Repricing by Amazon Sales Rank: Of the tools I surveyed, only two allowed you to set rules by Sales Rank. Almost impossible to understand how such a fundamental repricing criteria gets overlooked, but its true. I would consider this as important as the blindspot issue (and possibly even more important).
2. Repricing by product category: Another option that is offered by very few repricers, that should be mandatory in all of them.

You want a repricer that understands the Amazon seller experience, and how important details like Sales Rank and product category are.

Repricer Criteria #4: You want a tool that is transparent about their repricing logic

That’s a mouthful, but what this means is: Does the repricer tell you how their features actually work? Or do they hide behind jargon (and basically say “just trust us”)?

The majority of repricers offer features with flashy-sounding names, and also refuse to tell you what those features actually do or how they work.

So if a repricer promises “AI” or “machine learning” or “game theory,” and then refuse to define exactly how those technologies work – you might be getting scammed.

Repricer Criteria #5: Do they push “winning the Buy Box” as their main selling point?

This is a huge red flag.

Winning the Buy Box is the most basic feature of a repricer. There is nothing remarkable about it.

So if any repricer claims to “win you the Buy Box” as their main selling point – run. It means they simply have no real features or innovation to offer.

How often should you reprice?

Now you have an understanding of repricing concepts, and a list of methods and tools to choose from. Now the question is: How often should you reprice?

While there’s no single “right” answer to this question, here’s a couple of things to understand:

1. Repricing too often is better than repricing too infrequently.
2. But still, there is such a thing as repricing too often.

I call repricing too often “over-optimizing.” It’s a bad thing because it trends your prices downward unnecessarily.

So what’s the right answer?

I suggest repricing your inventory once a day.

If you have to choose what to give priority to, its better to reprice your lower demand inventory more often (to convert it to a sale), and your higher demand inventory less often.

But once a day is a good frequency to shoot for.

What we just learned

You now have a 360-degree look at every repricing fundamental. We took you through basic pricing strategies, common mistakes, methods of repricing, basic pricing strategy concepts, how to think through setting a price, and a full list of tools to help you.

My attempt with this article is to condense down everything you need to completely master what is literally 50% of any Amazon business: re/pricing. This has been the product of 15 years of mistakes, trial, and error from my personal business.

Print this out. Study it. And l hope these lessons pay dividends for the lifetime of your Amazon business.

-Peter Valley

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