Whether it is eCommerce or any other business, everyone has the only ultimate goal to generate as many sales as possible. Specifically, in the eCommerce industry, various factors influence a customer to buy your product, such as product reviews, images, descriptions, and pricing. Pricing is a crucial factor affecting the customer’s shopping decisions. That is why to reach the buy box section on Amazon; it is necessary to implement a robust pricing strategy.
A solid pricing strategy doesn’t mean that the price of your products needs to be too low or too high. The primary motive behind this is to implement pricing strategies that can attract your customers and add value to your business. In the enormous world of eCommerce, where customers have thousands of product choices, the price can prove to be a deal-breaker for you. According to a recent survey, only a few percent of customers do their research before buying a product online. A significant number of customers do the pricing search by visiting various eCommerce platforms. They usually visit the other platforms to compare the price of the product they want to buy. Pricing is one of the essential aspects of etraKY’S SCRAP model, and you can click here to know more about it in detail.
In this particular blog, we have mentioned some essential factors that can help you implement a decent pricing strategy for your Amazon products.
Spectacular Ways to Set Up the Price for Your Amazon Products
Before setting up a price for your Amazon products, you must go through several calculations to help you implement an intelligent pricing strategy.
Calculate all the Costs and Fees
Before deciding on your products’ selling price, you must find your overall cost. The actual cost of a product involves a lot of factors that need to be considered at the time of setting up a selling price of the product. To calculate total costs, you need to consider the following:
- In order to determine the total manufacturing cost of the product, you need to assess the cost of the raw materials used to manufacture the product, such as clothes, plastic, fiber, wood, metals, etc.
- Find out the actual cost you spend on storing the products in a warehouse. You must also calculate this price if you are an Amazon seller using the FBA(Fulfillment by Amazon) service.
- Figure out the shipping charges you need to pay to move your products from the manufacturers to the warehouse and then deliver them to the customers.
- Evaluate the price of the ad campaigns you run to promote your products.
- Calculate the return fee by analyzing all the profit margins that you have lost because of the return, including the 20% return charge that Amazon keeps a commission on returned products.
Hence, before fixing the actual selling price of the product, you must figure out all these charges involved in selling your product on Amazon. All these calculations can help you set up an accurate profit margin on every product sold. Apart from that, you can also get along with a product price analysis software such as etraKY BS. It can provide you with the necessary information regarding your competitor’s price and then help you to set a great price for your product.
Get to Know Your Customers
Knowing your customers appropriately can also help you set a reasonable price for your Amazon products. To increase your profitability, it is essential to read the mind of your customers and know what they consider before buying any product on Amazon. To understand them, you can go through the review and rating section. Here you can find helpful information such as complaints about the products and the other preferences of the customers. Most customers prefer to buy products at a lower price, so you need to apply some tactics in such a scenario. Suppose if your product costs rs200, you can set it for rs199. It can make them think that they are buying a product from the range between 100-200. Analyzing the customers’ minds can also help you set up the price of your upcoming products.
Analyze the Pricing Strategy of Your Competitors
The eCommerce marketplaces are pretty competitive when it comes to pricing. Remember, you are not the only one in the market; many others are selling similar products as you. To make your Amazon business more profitable than ever, you must analyze your competitors’ pricing strategies. Search for similar products on Amazon and find your competitors. It can be a crucial process, especially if you are a new seller or brand in the industry. Find out your competitors’ prices and then set a reasonable price for your products.
However, if there are customers who prefer to buy low price products, then the customers who prefer to buy a quality product at a decent price also exists. So, keeping all these factors in mind, you can successfully set up an original price for your product. In this regard, you can also take the help of competitor price tracking software such as etraKY BS. It can provide you the visibility of your competitors from various channels in a single panel. It can help you analyze your competitors’ pricing strategies more effectively.
Take the Help of the Automated Pricing Tool
If you sell products on Amazon, you must know that you must win the buy box section to increase your sales robustly. The majority of customers want to buy a product at a lower price. So there are more chances that the lowest product price of any category may win the buy box. Now the problem is how will you get to know the lowest price of any product? At Amazon, you can take advantage of the automated pricing tool that can automatically set up a reasonable price for your product depending on the changes in prices of your competitors.
It can help you be competitive and win the buy box. You can use this advanced service of Amazon before setting up a decent price for your products. This tool can save you time every time you spend evaluating your competitors’ prices.
In such a way, you can also implement the strategies mentioned above to set up an accurate price for your Amazon products. Setting up decent product pricing may take time, but spending the required time on this aspect of your business is highly recommended. Pricing can be one of the reasons if you are missing out on obtaining a higher profit margin. All your efforts can be unsuccessful if you cannot set an advanced pricing strategy for all your products. That is why it is essential to gain customer insights, competitors’ pricing strategies, and the calculator of the overall cost of a product.
All these factors can help you fix your product’s selling price. If you are still ignoring this essential aspect of the eCommerce business, it can be the reason for your business’s failure. So before anything else you must focus on setting up dynamic pricing for your Amazon products. At last, we would like to suggest that instead of taking the service of Amazon’s automated pricing tool, you should go for etraKY BS. It can help you in many ways, from analyzing your competitor’s pricing to helping in maintaining price hygiene across the channels.