The incredible power of “pricing leverage”: Why FBA sellers can price higher and still get sales on Amazon
One of my early motivations for launching FBA Mastery was to reverse the tide of Fulfillment by Amazon sellers pricing their inventory way too low.
Specifically, I wanted to educate FBA sellers who are using a conservative pricing strategy where they everything to match the lowest Merchant Fulfilled price, in a desperate attempt to grab the top spot.
This is shortsighted, and will cost any Amazon seller lot of money. A lot.
As FBA sellers, we are bestowed with the ability to price our inventory higher than everyone else, and still get sales.
It still blows my mind that many Fulfillment by Amazon sellers have not figured out two things:
- FBA sellers are pricing their inventory for Amazon Prime subscribers ONLY – NO ONE ELSE.
- Amazon Prime subscribers will pay WAY WAY more for an FBA offer. Way more.
Here’s a hypothetical scenario: An average paperback ranked 150,000, major publisher, non-textbook, selling for a $5 merchant fulfilled, no FBA competition. What do you do?
The short sighted Amazon seller would match that $5 price (+ shipping cost) to get the top spot. And they’d be happy with a payout of 5 cents (or whatever it is).
The Fulfillment by Amazon seller who sort of gets it might price the book at $9, having a superficial understanding of Prime subscribers being willing to spend “a little” more for an FBA (Fulfillment by Amazon) offer.
The ability to price higher as an FBA seller is what I call “pricing leverage.”
How I price my FBA offers
How would I price in the above scenario?
I’d sell that book for $15, every time. Maybe more.
And if it was a textbook – even more.
I probably have close to 1,000 books in the $3 to $4 Merchant Fulfilled range, listed at $11.95 and up FBA.
And I sell a dozen or more of these, every day.
These are the prices Amazon Prime members are willing to pay – if you let them.
PS: My Pricing Mastery course
I have to mention I have an extensive video course on maximizing your profits through superior pricing: Pricing Mastery.