Selling on Amazon is all about strategy. With millions of sellers competing for the Buy Box, pricing your products effectively is crucial. That’s where repricing strategies come into play.
Whether you’re using automated repricing software or adjusting prices manually, success depends on data. However, many Amazon sellers overlook a key element that directly impacts their repricing decisions: accurate bookkeeping.
Without a solid financial system, you risk making pricing decisions that don’t actually maximize profits. In this guide, we’ll break down how accurate bookkeeping supports your Amazon repricing strategy and helps you build a more profitable business.
Understanding Amazon Repricing Strategies
Amazon’s marketplace is competitive, and prices fluctuate constantly. To stay ahead, sellers use different repricing strategies to optimize sales and profitability. The three main approaches include:
1. Manual Repricing
Some sellers adjust prices themselves based on market trends, competitor pricing, and sales data. While this gives full control, it’s time-consuming and inefficient for large inventories.
2. Rule-Based Repricing
Many sellers use repricing tools that allow them to set rules (e.g., “Always price $0.50 lower than my competitor”). This method speeds up the process but can sometimes lead to price wars, eroding profit margins.
3. Algorithmic Repricing
Advanced repricing tools use AI technology and market analysis to determine the best price for winning the Buy Box while maximizing profit. This approach is more data-driven and helps sellers strike a balance between competitiveness and revenue.
Regardless of the method used, repricing without a clear understanding of your true costs can result in losses. That’s where accurate bookkeeping becomes essential.
Why Accurate Bookkeeping Matters in Repricing
Many Amazon sellers think of repricing solely in terms of competition, but pricing decisions should always be based on financial data. Here’s how good bookkeeping supports a successful repricing strategy:
1. Knowing Your True Costs to Avoid Underpricing
Amazon fees, storage costs, shipping, advertising, and returns all affect profitability. If you’re repricing without tracking these expenses accurately, you might sell at a loss without realizing it.
For example, if you sell a product for $20 and Amazon takes a 15% referral fee ($3), plus FBA fees of $5, you’re left with $12. But what about costs like:
- Product sourcing ($6)
- Shipping to Amazon ($1)
- Advertising ($2)
That leaves you with just $3 in profit. If you lower your price to $18 in an effort to stay competitive but don’t account for these costs, you could end up selling at a loss. Bookkeeping ensures you know exactly what your break-even point is before making pricing decisions.
2. Understanding Profit Margins Across SKUs
Not all products have the same profitability. Some have higher margins, while others have hidden costs that eat into profits. Without accurate bookkeeping, you may mistakenly think certain items are making you money when they’re actually draining your business.
By tracking cost per unit, fees, and overhead expenses, you can:
- Identify high-margin products and adjust pricing strategies accordingly
- Set different repricing rules for low-margin vs. high-margin items
- Avoid blindly lowering prices on products that are already thin on profit
3. Tracking Trends for Smarter Pricing Decisions
Repricing isn’t just about reacting to competition—it’s about understanding when and why to adjust prices. Good bookkeeping provides insights into seasonal trends, sales cycles, and customer demand.
For example, if bookkeeping data shows that certain products sell best in Q4, you might increase prices slightly instead of lowering them. Or, if sales slow down in summer, you can proactively adjust pricing rather than making reactive cuts that hurt profitability.
4. Monitoring Cash Flow to Sustain Growth
Repricing impacts cash flow, and poor bookkeeping can lead to financial strain. Lowering prices might increase sales volume, but if cash isn’t managed properly, you might struggle to restock inventory or cover business expenses.
Accurate bookkeeping helps you:
- Forecast cash flow and anticipate future expenses
- Ensure there’s enough margin to cover inventory restocking
- Prevent unnecessary debt from pricing mistakes
5. Tax Planning and Compliance
Every price adjustment affects revenue and taxes. If your bookkeeping is inaccurate, you could end up underreporting or overreporting income, leading to issues during tax season. Keeping precise financial records ensures you:
- Properly account for sales tax
- Deduct expenses correctly
- Stay compliant with tax regulations, avoiding penalties
How to Improve Your Bookkeeping for Better Repricing
Accurate bookkeeping doesn’t just happen—it requires the right systems and tools. Here’s how you can improve financial tracking to enhance your repricing strategy.
1. Use Cloud-Based Accounting Software
Tools like QuickBooks and Xero help Amazon sellers automate financial tracking. These platforms integrate with Amazon and provide real-time insights into profits, expenses, and cash flow.
2. Separate Business and Personal Finances
If you’re still mixing personal and business expenses, tracking true profitability becomes difficult. Open a dedicated business bank account and use separate credit cards for business transactions.
3. Track All Amazon Fees and Costs
Manually tracking Amazon fees is time-consuming, but bookkeeping software can automatically categorize costs like:
- Amazon referral fees
- FBA fees
- Long-term storage fees
- Advertising costs
- Return and refund deductions
4. Regularly Review Profit and Loss Statements
Your P&L statement is one of the most important reports for monitoring financial health. Reviewing it monthly (or even weekly) helps you see trends in revenue, expenses, and profitability. If you notice declining margins, it might be time to adjust pricing or cut unnecessary costs.
5. Work with an eCommerce Bookkeeper
If managing bookkeeping feels overwhelming, consider hiring a professional who specializes in eCommerce accounting. An expert can help you set up proper financial systems, ensure accuracy, and provide reports that guide better business decisions.
Real-World Example: How One Seller Used Bookkeeping to Improve Repricing
John, an Amazon FBA seller, was using a repricing tool but found his profits weren’t growing. Despite increasing sales, he struggled with cash flow and wasn’t sure which products were actually making money.
After working with an eCommerce bookkeeper, John discovered:
- He was underpricing certain high-cost items, leading to losses.
- Some SKUs had high return rates that were eroding profits.
- He was overspending on PPC campaigns that weren’t yielding strong ROI.
With this new financial insight, John adjusted his repricing strategy:
- He raised prices on low-competition, high-margin products.
- He stopped selling items with razor-thin profit margins.
- He optimized PPC spending to improve ad ROI.
Within six months, John’s net profit increased by 25%, and his business was in a healthier financial position.
Final Thoughts
Repricing is an essential part of selling on Amazon, but it shouldn’t be done blindly. Without accurate bookkeeping, sellers risk making pricing decisions that lead to losses instead of increased profits.
By tracking true costs, monitoring profit margins, and managing cash flow effectively, you can refine your repricing strategy and ensure long-term success. Investing in better bookkeeping isn’t just about compliance—it’s about maximizing profits and making smarter business decisions.
If you’re struggling to keep up with financial tracking, consider partnering with a specialized bookkeeping service like EcomBalance to gain deeper financial insights and build a more profitable Amazon business.
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About the Author:
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, eBay, Etsy, WooCommerce, & other eCommerce channels. We take monthly bookkeeping off your plate and deliver your financial statements by the 15th or 20th of each month.
