What is a repricer? For many new sellers, this is a common question and one that we'll help answer in this post.
Running an Amazon business can be tough and often very time-consuming. The most successful sellers on the platform are the ones who quickly learn how to leverage technology and software to their advantage. I can easily report that one piece of technology that is most useful for successful sellers is an automated repricing software.
What is a repricer?
If you’ve sold on Amazon then you know the importance of the “ buy-box .” The seller who wins the “buy-box” is often the seller who sells the most as their listing receives the most exposure.
One of the most essential criteria for consistently winning the “buy-box” is making sure you're pricing your product competitively. However, this can be a double-edged sword. Although you want to win the “buy-box,” you do not want to at the cost of selling your products at a loss. On the other hand, you also do not want to have to sit there and constantly be updating your listings.
Repricing software uses automated systems to reprice your Amazon inventory to stay competitive 24/7 within the rules you set as the seller.
The way it works
Connect your Amazon seller account to your repricing software. Once connected, the software will automatically pull in all your listings using Amazon’s API.
The software then analyzes the listings of your competitors and allows you to filter upon several criteria:
- Buy-Box Eligibility
- Fulfillment Types
- Seller Ratings
- Seller Metrics
Moreover, The software will remain connected and constantly be receiving streams of new information. This new information allows you to adapt on the fly in accordance with the strategy you set.
When you should consider repricing
Repricing is not a silver-bullet. Because of this, we generally recommend that brand new sellers wait a bit longer before they dive head-first.
If that’s the case, how do you know when it’s the right time? We typically recommend waiting until you have at least 25 SKUs or $5,000 in monthly sales. Anything below those numbers simply won’t make sense. Right above those numbers is when the ROI really shines for sellers.
In other words, don’t rush it but be aware of when you should be using one.
Myths and Misconceptions
There are three common myths or misconceptions I often see with new sellers as they begin their Amazon journey.
- Repricing tools just lower your price
- Repricing below the competition is “stupid, short-sighted, and unfair”
- I can just do this myself
Repricing tools just lower your price
It is true, repricing tools do lower your price to remain competitive; however, they also raise your price. Repricing tools continuously adapt 24/7 based on your competitor’s pricing and metrics.
You also have the option (and is recommended to do so) to set a minimum price. Calculate your break-even price, the cost of the product after all associated fees. Then set your minimum price equal to or slightly greater than 10% above that to ensure profits.
You may also set a max price if needed.
Repricing below the competition is “stupid, short-sighted, and unfair”
Running a business should be very strategic. You should always be finding the best ways to maximize total profit within a certain time frame.
Remember, Total Profit = Sales Volume x Profit Per Unit
Oftentimes, it is better to decrease the profit per unit if that means significantly increasing your volume. You will churn through more inventory and may lead to increases in your total profit within the same time frame.
Too often I see new sellers focus too much on maximizing per unit profit. The secret to increasing total profit and scaling an Amazon business is high volume.
“I can just do this myself”
Yeah, I am sure one can do it themselves but I could not think of a more terrible, tedious thing to occupy time with.
Can you imagine refreshing your listings every 10 minutes (which is far too slow) to see if you have to change it? Now imagine having to do it for 5+ listings. Why do it yourself when you can have a computer do it for you 24/7.
As an example, Aura's repricing software for Amazon sellers keeps your inventory up-to-date 24/7 (even while you’re sleeping!).
Your time is valuable. The opportunity cost of your time is the most precious resource you have. This can mean distracting you from doing the essential tasks you need to do to grow your business further.
There are many benefits to having an algorithm reprice your products for you.
- Differentiation- Can set different strategies for different products
- No Downtime- Algorithms never need breaks, take sick days or go on vacation
- Set and forget- Focus on what’s immediately important to your business
Repricing Strategy Example
The Oscillation Strategy:
Once set, this strategy will price your product $0.01 below. As a result, you will gain more buy-box exposure from your competitors. Eventually, your listing will find its way to the “min” price. After hitting the “min” price, the listing will revert to the “max” price and reset the loop again.
If the range between your Minimum and Maximum price is relatively small, say $4-$12, the listing will “Oscillate” the Buy Box price.
The Buy Box is just a massive wave that you want to take control of. By Oscillating your price, you will gain buy-box exposure and while doing so, increase the average sales price of your product.
Important to look for in a repricer
Measuring performance when it comes to repricers is all about speed.
When looking to implement advanced repricing strategies it is vital to find a repricer with the quickest response times. It’s a deal-breaker if the repricer is too slow, it will simply not be able to update fast enough. You will find your listing consistently behind your competitors.
If your repricer takes more than 5 minutes to update, it’s slow.
Technology age quick. It is important to find a company that is consistently improving and finding solutions to remain state of the art.
Repricers are shifting into the realm of Machine Learning and AI. This new technology simply blows the competition out of the water for anyone not leveraging it. Simply put, those repricers will not be churning the right data to keep up.