Guest blog by Diana at Second Half Dreams
The Update Inventory with the Price & Quantity page explains how the “Your Minimum Price” field works. This optional field helps Amazon identify potential pricing errors with your listings. To use this service, enter your minimum allowable price for this product. If you attempt to set your price for the product below your minimum allowable price, your offer will become inactive and you will be notified via email.
How to Set Your Minimum Price
I just set mine in my Manage Inventory page. Go to the “Your Minimum Price” column in your inventory page and enter a price.
Here’s how it looks in the New Manage Inventory Page:
Tip: If you don’t see the column, check click on the “Preferences” button (not shown) and click in the box to enable the column.
Now, whenever the selling price goes under the minimum price, Amazon will stop the listing and send you an email. I know this works because I received two of those emails. To reactivate the listing, all you need to do is either raise your selling price or lower your minimum price.
How to Calculate Your Minimum Price
It takes a while to add minimum prices to my inventory listings but it’s well worth the time. Every few days, I pick a few items and calculate the minimum selling price using the FBA Revenue Calculator.
I do this by entering my buy cost in the “Prep Service” field and then entering different selling prices until I find a minimum selling price that I can live with. Most give me a profit of between $1.00 and $3.00.
Keep in mind, the minimum price is not your selling price. It’s just the lowest price that you’re willing to go.
I recommend calculating your minimum price each time you add a new listing and then work through your older inventory. Since long-term storage fees will hit in two months, this is a great time to start!
A Mistake I Made
A mistake l made was not watching the pricing of a product (in this case, CD players) after listing them. I bought them in early January and listed them for $29.95 (or so) and then did nothing.
If I paid better attention and saw that they were rapidly dropping in price, I would have priced more competitively to sell them before the selling price reached $17.60.
Instead, I held onto them and sold them at a loss in April.
Two Reasons to Enter Your Minimum Price
1. To protect yourself from pricing errors from either yourself or a repricer
As mentioned earlier, if your selling price gets set lower than your minimum price, then your listing becomes inactive so that you don’t accidentally sell your product at a loss. Mistakes happen…What if you typed in $0.99 instead of $9.99 and didn’t catch your typing mistake?
2. To know how low you can go and still make a profit
Sometimes you just want to get rid of inventory that’s old and not moving. With the minimum price already calculated, it’s easy to go through your inventory list and lower your prices without worrying about going so low that you’ll lose money.
If you do want to take a loss to move on, then that’s fine. But at least your loss won’t hit you by surprise.
*A version of this blog originally appeared on Second Half Dreams