Following on from Amazon’s announcement about it’s new Sold by Amazon program, we spoke to Chris Dunne from RepricerExpress to find out what the repricing industry thinks about the new competition.
Sold by Amazon vs RepricerExpress
“A new Sold by Amazon program effectively does away with external repricing tools and allows Amazon to decide what price your product is sold for.”
– Tamebay
There will still be a strong demand from third-party Amazon sellers for external repricing tools. In order to use Sold by Amazon (SBA), you have to be invited, use Fulfillment by Amazon (FBA) and be the Brand Owner (registered with Amazon Brand Registry).
Many sellers do not fall into these categories and those that do might not be comfortable giving Amazon (a competitor) full control over the pricing of their products. Plus, if you’re a brand with your own website and other channels, would you want your Amazon price to be cheaper than your own website?
“Amazon may decide to take a loss on your product and sell it for less than your minimum, but in this case you as the merchant would still receive the Minimum Gross Proceed agreed up front in the six monthly renewable contracts.”
– Tamebay
Having to set prices six months in advance is difficult in any business especially a dynamic one like Amazon where prices and demand fluctuate daily, not to mention potential issues with suppliers.
RepricerExpress customers review their pricing strategies regularly to see if there are ways of making more margin on their bestsellers whilst retaining the Buy Box.
Amazon has also said you cannot run Sponsored Product on SBA listings which will be a downside for a lot of sellers.
Overall, a lot of questions still remain from sellers over SBA. Amazon is yet to provide details of what products will be accepted and how the Minimum Gross Proceed (MGP) amount is calculated. The benefits (if any) for the sellers that qualify remain unclear.
I suspect, as with a lot of Amazon’s new programs, there will be a low adoption rate until sellers see how (if at all) this “hands-off the wheel” selling approach can benefit their business.
Amazon Automate v RepricerExpress
With competition from Walmart increasing, Amazon wants cheaper prices and cares more about its customers than third-party sellers. Much like in life, you get what you pay for. Amazon’s free repricer is useful for some small sellers — but for a serious seller on Amazon, it is too limited and encourages a race to the bottom.
External repricers encourage their customers to price upwards when conditions are right. Amazon’s repricer only prices downward.
We’ve had a few customers cancel their accounts only to come back after a short period of time as Amazon’s tool is too basic for their needs. Sellers want flexibility and the ability to choose who they want to compete with and who they want to exclude. Amazon’s repricer only has limited rules.
You also have to manually input all of your Min and Max prices. Most decent repricers will allow you to bulk upload saving precious time.
Another benefit of using an external repricer is the customer support. Anyone who has experience of dealing with Amazon’s customer support will know how frustrating it can be at times. Most external repricers will have dedicated, knowledgeable agents ready to respond to customer queries in a more efficient manner.
Overall, the main reason sellers choose to stick with an external repricer is that they don’t wish to share their prices and potential profits with Amazon as they view them as a potential competitor especially if it’s a listing they are making a nice margin on.
If you wish to read more about the differences between Amazon automate and RepricerExpress, check out this article.
Summary
Pricing is too crucial a part of any business to simply ‘outsource’ to another company, let alone your biggest competitor. Whilst SBA may have appeal for some sellers looking to gain high sales at the expense of profit — for a period — for most Amazon sellers, the programme seems much too restrictive.
As with Amazon Automate, Amazon’s free repricing tool, Sold by Amazon is another attempt by Amazon to drive prices down for customers, with little thought for third party sellers’ margins.
Third-party repricing tools will continue to enjoy widespread use among professional Amazon sellers who are there to remain in business and maintain profits. They offer flexibility to price inventory in different ways, based on the sellers’ individual circumstances.
Turnover is vanity, profit is sanity — and third party repricing tools are firmly focused on keeping your Amazon business profitable.
2 Responses
Lots of misinformation in the article.
“Amazon’s repricer only prices downward.”
– incorrect it prices upwards and downwards.
“You also have to manually input all of your Min and Max prices. Most decent repricers will allow you to bulk upload saving precious time.”
– incorrect you can bulk upload your Max/Min prices to Amazon.
Its sad when a company has to resort to tactics like this to sell their product.
“Amazon wants cheaper prices” yet are constantly driving sellers to sign up to Seller Fulfilled Prime which increases prices.
I am just signing up to give it a try, they claim that I will sell more product by having access to Prime customers that search for items from Prime sellers.
To use SFP I have to upgrade to using RM24 Tracked, this adds £2.30 to my postage costs, to achieve this extra amount I have to add £1.00 to take into consideration the extra VAT & 15% Amazon fee. Next week my items sold with a SFP label will be £3.30 more than this week.
As you can not price for non prime customers they will also have to pay more, although will get the item quicker.
Currently I get about 5.5% of Amazon customers pay the £1.50 to upgrade to 1st class.
And lets not forget the mantra “Customers want everything tomorrow”, although in reality they don’t.
I use a repricer on Amazon, it allows me to bulk update my min/max values by a percentage or value of the RRP at any time with a simple click of the button.