Sick of playing the Amazon pricing game? Then, you need to try out their automated pricing tool.
This tool lets you set up rules that adjust your prices automatically based on what your competitors are doing and what the market wants. No more constant price-checking and manual updates.
But here’s the thing: Knowing it exists isn’t enough. You need to understand how to use it right if you want to see results.
We’ll review how Amazon’s automated pricing works and how you can make it work for you. By the end of this guide, you’ll have the know-how to fine-tune your pricing strategy and pump up those sales numbers.
Amazon’s Automated Pricing Explained
Amazon’s auto-pricing is a tool that is designed to help you keep your prices competitive without you losing sleep over it.
Here’s the scoop: You set some ground rules, and the system takes care of the rest. It watches what your competitors are up to, keeps an eye on supply and demand, and adjusts your prices accordingly.
Now, you’ve got two options:
1. Amazon’s own tool: It’s built right into the platform. Simple, straightforward, gets the job done.
2. Third-party tools: These are the souped-up versions. Think Seller Snap and our contemporaries. We offer more bells and whistles, better reporting, but yeah, at a cost.
Here’s a real-world example: Say you’re selling gadgets. You could tell the system, “If our competitor drops their price, let’s undercut them by a buck.” Boom. Done automatically.
The upside? You can move inventory faster and stay in the game without constant price-checking. The downside? Prices can get a bit wild sometimes, which might throw off some buyers.
Bottom line: This tech can be a game-changer, but you’ve got to stay on top of it. Set it and forget it? Not quite. More like set it, then keep an eye on it.
Amazon’s Tool vs Third-Party Tools: What’s the Difference?
Let’s break down the key differences between Amazon’s built-in pricing tool and the third-party options out there.
| Amazon’s Tool | Third-Party Tools | |
| Made By | Amazon | Outside companies |
| Setup | Built-in, ready to use | Need to connect to Amazon |
| Features | Basic rules | Lots of advanced options |
| Data & Reports | Simple stats | Deep dives and trends |
| Price | Free | Costs money |
| Learning Curve | Easy to start | Takes time to master |
So, what’s the bottom line? Amazon’s tool is great if you want something simple and free. But if you’re looking to really dial in your pricing strategy, a third-party Amazon repricer might be worth the investment. It all comes down to how much control you want and how deep you want to dive into the data.
How Amazon’s Automated Pricing Tool Functions
Amazon’s automated pricing system uses several rules to help sellers adjust their prices based on market changes. Key rules include:
Competitive Buy Box:
This one’s all about the Buy Box – that coveted “Add to Cart” button. You can set your price to undercut, match, or even go a bit higher than the current Buy Box price. It’s like saying, “I see your price, and I’ll raise (or lower) you.”
Competitive Lowest Price:
Instead of focusing on the Buy Box, this rule looks at the absolute lowest price for your product on Amazon. You decide if you want to go lower, match it, or stay a bit higher. It’s a balancing act between being the cheapest and protecting your profits.
Competitive External Price:
Off-Amazon Price Match This one’s for the big-picture thinkers. It lets you keep an eye on prices outside of Amazon. You can cap your price at what others are charging elsewhere or match them exactly. It’s about staying competitive across the board, not just on Amazon.
Based on Sales Units:
This rule is all about moving product. If your sales dip below a certain point, you can auto-drop your price to get things moving again. Think of it as a built-in sale trigger.
So, that’s the gist of it. Amazon’s system juggles all these rules to keep your prices in the sweet spot. It’s like having a pricing expert working 24/7, always adjusting to keep you in the game.
How to set up Automated Pricing on Amazon?
Alright, let’s walk through setting up auto-pricing on Amazon. It’s not as complicated as it might seem, but you’ll want to pay attention to each step:
Step 1: First things first, log into your Seller Central account.
Step 2: Head over to the “Pricing” tab and look for “Automated Pricing” in the drop-down. That’s your starting point.
Step 3: You’ll see an option to “Create a customized Pricing rule” – that’s what you want.
Step 4: Now you’ve got choices. Want to focus on competing for the Buy Box? Go for “Competitive Featured Offer.” More interested in how fast you’re selling? “Sales Velocity” is your pick.
Step 5: Give your rule a name. Make it something you’ll remember easily.
Step 6: Choose which marketplaces you’re targeting. Could be just one, could be several.
Step 7: Here’s where it gets interesting. You’ll set your pricing parameters. Think minimum and maximum prices, profit margins – all the good stuff.
Step 8: Time to pick your products. This is where you decide which items get the auto-pricing treatment.
Step 9: Almost there! Choose your “Take action” option. This is basically telling Amazon what to do when your rule conditions are met.
Step 10: Double-check everything. Make sure it’s all set up the way you want.
Step 11: Ready? Hit “Start Repricing” and watch your new rule go to work!
A couple of quick tips before you dive in:
● Amazon’s got different tools for this. “Automate Pricing” does the work for you based on what’s competitive. “Repricing” lets you call more of the shots.
● Do your homework first. Know your competition, understand your costs, and have a clear idea of what you want to achieve with your pricing.
Remember, setting this up is just the beginning. Keep an eye on how it’s performing and be ready to tweak things as you go. Good luck!
The Pros and Cons of Amazon’s Automated Pricing
Now that you’ve got a handle on the basics of Amazon’s automated pricing, let’s dive into the pros and cons to help you weigh your options.
Pros of Amazon’s Automated Pricing:
Saves You Time
Ever feel overwhelmed by constant price checks? Amazon’s Automated Pricing is your new best friend. Set it once and let it do its thing. What could you do with all that extra time? Maybe innovate your business or improve your marketing strategies?
Easy to Master
Worried about learning curves? Don’t be. This tool is straightforward, with a clean interface that summarizes price changes effortlessly. You’ll be on top of your game without drowning in complexity.
Eliminates Human Error
Tired of those small, annoying mistakes in pricing? With Amazon’s automated system, you can say goodbye to human errors. Enjoy seamless and efficient price adjustments that keep your business running smoothly.
Keeps You Competitive
Concerned about keeping up with competitors? The automated tool tracks price changes for you, adjusting your prices to stay competitive. This means you’re always in the race, without constantly monitoring your rivals.
Cons of Amazon’s Automated Pricing:
Might Miss Out on Higher Prices
Sure, setting your prices low might boost sales, but what about those times when buyers are willing to pay more? This tool might keep you from seizing those chances to up your average selling price—and that’s a missed opportunity for bigger profits.
Setting Prices Can Drag On
Got a big inventory? Prepare for a slog. Amazon’s tool requires you to set min and max prices for each SKU individually. If your product list is long, you’ll be clicking away for hours. Not exactly the quick fix you were hoping for, right?
One Strategy at a Time
Here’s a tricky one: the tool won’t let you target both FBM and FBA sellers in the same breath. Choose FBA competitors, and you might miss out if an FBM seller snags the Buy Box. Opt for no preference? You might undercut yourself just trying to match prices with FBM sellers, losing your edge for the Buy Box.
Can’t Always Outsmart Competitors
Think you can always outprice the competition? Think again. If your competitor’s minimum price is just a bit higher than yours, they might end up with the edge. Imagine you both drop prices by $0.05 under the lowest. Your price might hit rock bottom first, leaving your competitor to swoop in and take the prize at a slightly higher price. Frustrating, right?
Ready to Automate Your Amazon Pricing? Here’s How to Qualify
So, you want to jump on the auto-pricing bandwagon? Here’s what you need to do:
Have Active Listings
First up, you need products listed on Amazon. Not just any products, though—they need to be eligible for automated pricing. Make sure you’ve got active offers on the SKUs you want to enroll.
Set a Minimum Price
Want to keep your profits up? Set a minimum price for each SKU. This is your safety net to ensure you don’t sell at a loss, no matter how fierce the pricing wars get.
Pick Your Pricing Playbook
Amazon’s got a few tricks up its sleeve when it comes to pricing strategies. Competitive pricing? Sales velocity? Take your pick. Just make sure you’re choosing a rule that makes sense for each of your products.
About That Professional Account…
Here’s a bit of good news – you don’t absolutely need a Professional selling account to use auto-pricing. Sure, it’s handy if you’re moving a ton of product, but even individual sellers can get in on this action.
Remember, getting set up is just the start. You’ll want to keep an eye on how things are going and tweak as needed. And hey, play by the rules, okay? Amazon’s got policies about pricing – keep things honest, consistent, and reflective of what you’re actually selling.
Is Amazon’s Automated Pricing Right for You?
Amazon’s automated pricing can be a game-changer for sellers looking to stay ahead. It offers an easy-to-use interface and customizable rules that save you time while fine-tuning your prices. But here’s the catch—it’s not a magic fix. You still need to keep an eye on things and tweak your settings as the market changes.
To really take your Amazon business to the next level, you should combine automated pricing with smart overall strategies. That’s where Seller Candy comes in. We offer expert Amazon support to handle the time-consuming tasks, from resolving Seller Central issues to managing your listings, so you can focus on growth.
Our service tiers are designed to fit different business needs, offering everything from basic task management to full-scale support and premium tools.
Ready to level up your Amazon game? Let Seller Candy handle the tough stuff so you can focus on what really matters—growing your business. Book your FREE consultation today!
