I’ve just read a really interesting article about Amazon private label pricing on Web Retailer. It dismisses the private label myth that taking a generic product and branding it, equals success. Other factors play a major role including price. Three private label experts Will Tjernlund, Greg Mercer and Bernie Thompson give their advice of how you should price your private label products.
Part 1: How to Price Private Label Products on Amazon
Here’s a summary of the main points covered:
- You should have at least a rough idea of your costs and price you need to sell your product for to make a decent return BEFORE you buy your stock.
- Find the market price for your product. Will used eBay auctions to help him decide what price to set on Amazon.
- Include all costs. Amazon fees differ from country to country. You might also need to factor in PPC costs. Think about whether the cost will change with product variations for different countries.
- When setting the initial price, Will generates a liquidation price and a ceiling price, similar to setting your min and max price in RepricerExpress.
- Consider differentiating your product from competitor products by offering alternative uses or donating a percentage to charity.
- “Customers are far more likely to buy the established products with more reviews, higher search ranking and ultimately, a better reputation.”
- The most popular strategy is setting your initial price below the market price which should result in increased sales and product visibility. With time, you can then increase your prices.
- Use the 999 trick to see the sales rate of competitors. Add 999 units to your cart, Amazon will update to show the current stock level. You can repeat this activity at different time points (24 hours etc) to track how many they sold over a period of time.
- Greg Mercer says don’t just set your initial price and forget. Test your prices with A/B testing.
- Know your competition and what you are competing on.
- Greg reveals that a “quality product with five-star reviews can sell at 20-30% more than low-rated competition.”
Check out the full article on WebRetailer.
Part 2: Private Label Repricing with RepricerExpress
Even if you have little or no competition on your product listing at the moment, this might not always be the case.
Using RepricerExpress’ powerful Automations features, you can base your pricing on other criteria than your competitors’ prices.
You can automatically move your products to different rules based on your settings and triggers.
For example, you can move products based on:
- Stock Quantity – How much stock you have.
- Stock Age – How long the product has been first listed or how long it has been restocked.
- Sales Rank – Your products sales rank.
- FBA Long Term Storage Fees – When storage fees are due