SellerLogic is a Germany-based company specializing in the development of software solutions for Amazon sellers. Their current offer consists of two software solutions: The SellerLogic Repricer and Lost & Found. SellerLogic's Repricer optimizes product prices, enabling sellers to secure the Buy Box and increase their sales. The Lost & Found solution enables FBA sellers to claim reimbursements arising from FBA errors in Amazon warehouses. Moreover, SellerLogic's Customer Success Team provides guidance and consultation in regard to the communication with Amazon Seller Support.
Repricing on Amazon: Do You Really Need it for Your Business?
Amazon has always been an appealing platform to sell online, mainly because of its global reach and billions of dollars in net sales. Novices as well as experienced Amazon sellers alike know that the online giant is attracting more and more buyers with its approach that puts the customer above all else. For sellers, this naturally means more potential customers browsing their listings.
However, only sellers that have a holistic view of the playing field will be able to make the most of this situation and end the day with a healthy markup. Easier said than done when you take a look at competition – because, much like the customer-base we talked about a second ago, Amazon is attracting more sellers as well. A decent repricer can be useful for gaining an edge over this competition. But how important is repricing really and do you really need it for your business? Get ready to find out here.
Methods of Repricing: Dynamic vs. Static
Repricing is the process of price optimization regarding the products you’re selling on Amazon. Optimal pricing depends on many external and internal factors, such as your level of inventory, shipping costs or how much your competitors are charging for a similar product. What can be said for sure, however, is that it is a necessary process if you want to stay competitive. Before that backdrop, it makes sense to take a closer look at the methods of repricing that are at your disposal.
Static repricing is a method of automatically altering your product prices with a software according to a rule you specify. For example, this can be a rule that demands "always sell one cent cheaper than the competition".
Static repricing allows you to carry out a specific price adjustment regulation. Therefore, instead of manually altering your prices to keep up with the competition for many hours each day, you can let the repricer do it for you.
The benefit most people don’t see in dynamic repricing ist that it does not simply help you to get the Buy Box, but it helps you sell at the best price possible while holding the Buy Box at the same time. Here’s what happens:
A dynamic repricer determines the price you need to win the Buy Box. It then adjusts your pricing to that figure, gradually raising it until you reach the maximum amount you can charge without losing the Buy Box.
This pricing technique has the advantage of increasing your chances of being in the Buy Box while selling at the greatest possible price. The good thing is that while it does a lot of work for you, you still have complete control in a sense that you can set minimal and maximal prices. Having said that, you can change the repricer’s parameters according to the results of market and competitors research.
Should You Ever Consider Static Repricing?
We can’t say that you should. It’s definitely an option, but let’s take a closer look at why dynamic repricing is the better one.
First and foremost, it's critical to understand how an intelligent dynamic repricer operates. It monitors the market in real time, noting any pricing changes on Amazon or changes in rival structure on a certain product. It then modifies the user's product pricing based on this mass of data - not according to the same set of criteria as static tools, but according to the market's requirements and the user's own market share.
Dynamic pricing solutions, such as the SellerLogic Repricer, raise the user's product price until it reaches the optimal one, which is the highest feasible price at which the Buy Box can still be kept.
In contrast, the rule-based approach of a static repricer usually leads in only one direction: down. If the price is always set lower than that of the competition, this can only end in price erosion and low or no margins.
Okay, but What Is the Buy Box?
We have already mentioned it a few times, but what is it? Why is it so important?
The “Buy Box” is also known as the “Add to Cart” field on Amazon. This orange field is the most wanted button on Amazon for many sellers. Why? Because the product linked to it receives much higher visibility than other similar products, which in turn leads to more revenue for the seller of this product.
Here’s the catch, only one seller can have the Buy Box at a time. As soon as several retailers offer the same product and "share" the listing, they fight over the place in the Buy Box. However, winning this is crucial. This is because 90% of all sales are made by customers via the Buy Box. Only 10% are made by other sellers.
How to Win the Amazon Buy Box?
Is there a miracle method of winning the Amazon Buy Box? Unfortunately, no. There are, however, several metrics that play into attaining a high Buy Box share. The final price being an important metric but not the only one to take into account.
Because there are so many sellers, only the ones who have the highest customer satisfaction are selected. Amazon reveals criteria that ensure consumer happiness, which the online giant receives from the seller's commercial activity on the site. Shipping time, order defect rates, and buyer satisfaction with returns are just a few examples. You should know that the bar is set fairly high here — if you want to win the Amazon Buy Box, your defect rate should be near to 0 percent, for example.
Well, you might wonder what is the ideal Amazon Buy Box price? Amazon modifies the pricing range for each product. Anything that is priced more or lower than this will not be able to win. However, as long as you keep inside that pricing range, you theoretically can win the Buy Box. Remember that if your product is too expensive, the chances of winning the Buy Box are very low.
Shipping Also Impacts the Amazon Buy Box Percentage.
It goes without saying that customers want fast shipping. That’s why in recent years, the online retailer has significantly grown its own logistics service while also forging strong partnerships with third-party service providers (UPS, FedEx, etc). But how does this help you get into the Amazon Buy Box?
Amazon provides services not just to customers but also to sellers. Fulfillment by Amazon is a program that allows sellers to delegate storage, shipment, and customer support to Amazon in exchange for a fee, allowing them to focus on selling. Therefore, you'll have more time to expand your business, and it'll also enhance your chances of winning the Amazon Buy Box. As an FBA seller, you already meet two important criteria that Amazon considers when giving the coveted orange button: excellent customer service and consistent shipping.
We have prepared a short list of minimum requirements that you as a seller need to fulfill to win the Buy Box:
● Being a professional seller
● A low order defect rate (ODR) which takes customer feedback, A-Z claims and chargebacks into account.
● Fair prices
● Outstanding customer service
● Fast delivery
Find out here what important metrics you need to consider for winning the buy box: How to win the Buy Box in 13 steps!
Can You Lose the Amazon Buy Box?
Sure. If you're caught slacking, you'll pay the price by handing the new owner about 90% of your sales. The question now is, how can we reclaim it?
There isn't always much you can do, according to numerous discussions in Seller Central. The system will sometimes provide the Buy Box to sellers who appear to have poorer stats than you. In truth, it's possible that the deletion of the Buy Box is due to another rival with whom you share the listing.
As you already see, getting in the Buy Box already demands a lot from the sellers, succeeding in the Buy Box against Amazon requires even more effort, and losing the Buy Box is not that difficult. When it comes to the criteria used by the algorithm to assess the millions of offerings, Amazon keeps a low profile. This does not exactly make developing an optimal plan any easier. As we have stated, outplaying Amazon at their own game is no easy task.
High flexibility is essential while competing with Amazon for the Buy Box. On a constant basis, sellers should employ the adjustable parameters provided to them. This is especially true of the pricing, but no seller can achieve this round the clock. In the battle for the Buy Box, dynamic repricers are a must-have.
3 Main Reasons to Use Dynamic Price Optimization on Amazon
Why should you use a repricing tool? Three main business reasons come to mind:
1. Save Time
As mentioned above, checking the prices of all products is almost impossible, try to automate this process. Time is money, so you should spend it wisely and rather on selling than on tedious tasks.
2. More Turnover
Let’s face it: There is hardly any turnover if there is no Buy Box.
Low margins are legitimate concerns. However, there is no profit margin if there is no sale. In the end, it is a question of absolute numbers rather than percentages. Even with reduced margins on the e-commerce platform, Amazon price optimization can help merchants improve sales.
Even though the repricer lowers the percentage margin, better sales and a larger contribution margin are ensured.
A repricer enhances your sales by winning the Buy Box more frequently, as mentioned in the previous point.
By winning the Buy Box at the highest feasible price, dynamic solutions like SellerLogic's Repricer for Amazon not only create much more sales, but also significantly higher profitability.
Winning the Buy Box is definitely a success. But you should remember that price is not the only important criterion of it: shipment and customer support are of paramount importance to ensure customers’ satisfaction.
To help you save the time and boost sales, we recommend using a dynamic repricing software such as SellerLogic Repricer that will do lots of work for you. It optimizes the price of one of your items in the Buy Box, allowing you to sell at the best – not the lowest – price. It also accomplishes both objectives: getting into the Buy Box and selling at the greatest feasible price.
In general terms, we recommend that you make use of the two-week free trial period that most repricers offer (ours included). Take a look around and see which repricer is best suited for your company's needs. Take into account factors such as the offered strategies, in what languages customer support is provided and whether a dynamic option is included in the most attractive package (often the dynamic alternative is only accessible in a “premium package”).