With Amazon statistics showing that 40 percent of sellers are making $250K a year or more, and 19 percent making $1 million+, earning a living as an Amazon seller is definitely doable. But whether you’ve been an Amazon seller for years or you’re just starting out, one of the key steps for successful sales is pricing. Using an Amazon advertising tool to get the word out about your products can be an important step, but if they’re not priced right, it won’t do much for sales.
Consider All of Your Costs First
Before coming up with a price, you have to consider all of the costs involved, not just the amount you’ll pay to get the product. Just some of the possibilities, which can vary significantly depending on the product, include inventory, advertising and marketing, and marketplace fees. There are customer return fees, your own returns-related fees, overhead, shipping, customs, and more. Tally up all of the costs involved and double-check them before setting a price for anything so that you don’t end up on the losing end of the deal. You’ll need to come up with a price that will allow you to be profitable with all of those costs included, yet not so high that you’ll price yourself out of the competition.
Don’t Be the Cheapest
While you might think that if you price your products at the lowest level, people will flock to buy them. They may do so initially, but if everything is priced so low, buyers are going to perceive your items as poor quality rather than a good value, and it will become a race to the bottom. If you want to be a low-cost seller, price your products at least 1.5 percent above the lowest seller so that you don’t end up in that race, but you’ll still have competitive prices.
Price According to the Brand
If you plan on selling at a low price to become the affordable leader in your category, pricing is fairly straightforward, such as the 99 cent rule, which makes them look like a great value, just be sure as noted that they aren’t the lowest out there.
It’s different when selling high-end products as you’ll want buyers to perceive them as high quality, which also means higher prices. When items are priced very low, buyers are likely to think they’re cheaply made, and vice versa. Instead of setting a price like $39.99, go for a whole number such as $40 instead.
Consider Automatic Pricing
Just because you’ve set your price, it doesn’t mean you’re done. The market is constantly changing, and you’ll need to be flexible in the process, which is why you should never advertise one set price. Some sellers choose to go with automatic pricing as it saves time and energy, avoiding having to reprice your entire inventory. You’ll set the rules, and rest assured that your inventory is priced to your specifications. If you have a lot of competition, it’s a great option as changes will be made in response to other seller’s changes. With auto pricing, you won’t have to worry about human error or making rash decisions when you’re tired. It will ensure that your pricing goals are efficiently executed in real-time.