Guest post by FBA seller Jeff Roth
Remember Ron Popeil? TV Product pitchman of the pocket fisherman, spray on hair for bald spots and the ever famous home rotisserie. His famous line during those infomercials was to “set it and forget it”! The audience ate it up and he went on to sell tens of millions of products via those ridiculous commercials. Where is he now? Probably on his own island somewhere smiling.
Don’t worry, I’m not telling you to go out sourcing rotisseries for FBA nor am I telling you to go out and do some Ron Popeil research. What I’m hinting at is that some of you using or thinking about using repricers in your FBA business may have a “set it and forget it” picture in your mind and that is something you may need to adjust depending on what you’re selling and how your competition is changing over time.
The notion of this piece is not to scare you into thinking you’re using your repricer incorrectly but rather to think about changes you may need to incorporate into your repricing rules and tiers.
Scenario #1: Yes, Set it and Forget It
For the most part, I would hope that 80-90%+ of your inventory you have in stock under a repricing rule should be ok to stay within that rule forever as long as the rule is solid.
For examples sake, let’s say you have 10 of the same toy in stock that you purchased for $10 that sell for $45 via FBA at a good rank of 50,000 in Toy. Let’s say competition grows on this product quickly like what happens in many retailer arbitrage scenarios. If you were only able to sell that toy for at $35 vs the $45 you prefer, you would still make a $10 profit which is acceptable to you in your business. So, as long as your repricing rule allows you to drop down to that $35 and the toy stays within that general ranking you should not have to adjust that rule or change that item to a different rule. It will sell and you’re set. There would be no need to return to this item and see if the rule is proper as long as you’ve done the research beforehand to show you’ve allowed proper room for the repricer to manoeuver the price within your comfort level.
I would hope that most FBAers have a good chunk of their inventory in this type of item where there is a large enough buy vs sell price to allow for fluctuations in competition and price. In reality, all FBA newbies should be doing this from the start to reduce risk.
Scenario #2: Consider Adjusting the Repricing Rule Itself
There are so many variables that you can incorporate into your repricing structure on our favourite repricing platform RepricerExpress. In fact here’s a list of just some of the variables they allow you to use to fine tune your pricing:
- Min/Max Prices
- Compete with Amazon/FBA/MF or all or none
- Only compete with Buy Box
- Item Condition (Used/New)
- Seller Compete
- Seller Rating %
- Number of Feedback a Seller Must Have to Compete
- Seller Location
- Specific Seller ID
- If/Then Situations of when to reprice and how much to reprice based on competition
If you think that you’re inventory is not moving maybe because you’ve set up too restrictive of a rule then you need to strongly consider loosening those binds and readjusting the rule.
Here’s an perfect example of needing to adjust your rule:
Let’s say you have a product that is a higher priced item like a gas powered generator ($200+) with little competition where you think the potential Amazon buyer would strongly prefer to buy from an experienced seller like yourself with 50+ Feedback Ratings vs a newer seller with 3 Feedbacks and be willing to pay more for your item because of this.
In your initial repricing rule set-up for this item you may have stipulated this and only chosen to reprice against those sellers with let’s say >10 Feedback Count. In your mind this made complete sense. Why reprice against some newer seller and let them potentially take away profits when you believe you can sell that same item at a higher price eventually?
Well, what if you were wrong? What if the buyer could care less and that seller with three Feedback Ratings just sold two of those items for $15 less than you because you didn’t reprice against him? Sure, maybe you just don’t care and will gladly wait until that picky buyer you’re envisioning does eventually come along and buy yours for more because of your selling experience. But probably not the case for most of us.
If I noticed that a certain item like this is just not selling and remember that I put restrictions on the repricing for a specific reason, I would go and revisit this scenario and see if indeed an adjustment needs to be made. Remove that Seller Feedback Restriction and see if the sales start up. It’s up to you how long you will wait within your comfort level but just don’t put it out of your mind or you’ll regret it.
Like I said, this should be done on a case by case basis and is why it’s important to not just “set it and forget it” because you may be causing some easy missed profit you will regret.
Scenario #3: Change to Another Existing Repricing Rule
The simplest thing you can do to get your sales back on track may be just to switch to one of your other rules that you already have established. In our business this is the one thing we’ve consistently done that has proven to generate more consistent sales.
Not to get too in depth but we currently have six different repricing rules within our account. Initially we had 100% our inventory spread over 3 of those rules but quickly realized that one of the rules was just being a bit too competitive in competing against some higher priced Merchant Fulfilled sellers which we thought would be ok considering the crazy low price we purchased them items at. What ended up happening was when newer MF sellers came on that item we didn’t like the idea of losing net profit even though we would still be making decent change on it.
So what did we do? Simply switched over to our most popular set-up competing only against Amazon and FBA sellers which took care of this issue. It was just that easy.
Sometimes you may over-think things when it comes to your repricing structure but I maintain that the best way to do things is the famous KISS Principle:
Keep It Simple Stupid
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