Selling on Amazon requires many skills as you compete with other sellers who might have plenty of experience in the business. There are many things to learn in order to attain optimal success in a highly competitive marketplace. In addition to attending PROSPER Show’s Amazon workshops to acquire knowledge about pricing strategies, which are essential for online selling, below are some tips from the experts:
- Before you make any pricing decisions, you should know all of your costs so you can develop unit economics for each SKU that you sell (including fixed costs, return-related costs, writeoff/writedown costs, product development costs). If you can’t cover all of your costs in the prices you set, you will have a profitability problem.
- Know the best products to reprice – Before you decide to put a product on sale, make sure that you evaluate your inventory to find out which products have been sitting in the warehouse for a long time. Avoid Amazon’s fees that are assessed when products are stored for more than a year and offer deep discounts to get those items off the shelves.
- Apply the principles of supply and demand – It is common knowledge that hot items can be priced higher and slower-selling items should be discounted. Amazon repricing software can help you compare your products’ prices to those of competitors and make adjustments accordingly.
- Do not sell too cheap – Buyers will flock to your page if you offer the lowest price in the marketplace, but problems could arise from this strategy. Your inventory may sell fast but your profits will suffer. Another problem is that customers might associate your product’s cheap price with cheap quality. If you try to match the lowest competition, you may be paying for the privilege of selling.