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.
Amazon have started to invite hand picked US sellers to sign up to the program described as being a hands off experience as Amazon will pick the price your product is sold at. However Amazon do allow merchants to set a Minimum Gross Proceed – a floor price which Amazon promise is the minimum the merchant will receive for each sale.
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. This could simply be because they have lack of available inventory in a category or due to sales events such as Prime Day or Black Friday. If Amazon sells a product for more than the minimum price then you get a higher payout for each unit sold.
Products would then appear as Sold by Amazon on the marketplace with Amazon being the merchant of record – similar in some ways to Vendors using Vendor Central and supplying Amazon with bulk stock. The crucial difference with Sold by Amazon is that they would place orders one by one for inventory as and when it’s sold.
The only caveats to this program are that you have to be the Brand Owner (register with Amazon Brand Registry) and you have to place your products into FBA so that Amazon can fulfil them. This also gives Amazon complete certainty of stock levels with no danger of overselling.
Some sellers will detest the idea of giving Amazon control over their sales and selling prices. Others, used to paying significant sums for some of the more complex repricing solutions available from third parties may welcome the move – Amazon’s internal repricing is legendary and it’s likely Amazon’s repricing could be more effective and result in great sell through rates.
The other benefit is having the Sold by Amazon badge next to your products – consumers inherently trust Amazon and if you want to win the Buy Box on a more frequent basis then having your products sold by Amazon themselves will undoubtedly give your products a boost.
6 Responses
Wow – I said this only the other day, it is like giving the fox a key to the chicken coop.
Amazon Buy Box algorithm is the holy grail, letting Amazon fulfil the item and set the price must be 99% factor in winning the BB so I can see a lot of people doing this, especially if they guarantee never to sell below floor and you save money by not need an expensive 3rd party repricer tool.
But if you are a brand with your own website and other sales channels would you want Amazon changing the prices below floor and subsequently possibly below your own website price – unless you automate an export of current listing prices and update your other channels automatically.
What is the idea of driving prices down all the time anyway? Surely we all need a healthy profit? To constantly drive prices down is not a good long term strategy for economy is it??!!
Amazon doesn’t give a flying sh*t about the economy they only care about one thing.
No prizes for anyone who can guess what that is.
The likes of Feedvisor, Repricer Express and Xsellco, who have businesses based on repricing must be pretty cheesed off.
Have to say they seem to be over complicating it, trying to re-invent the wheel, tinkering with a very successful formula just for the sake of it.
From a third-party repricer perspective, there is not a lot to worry about here initially. To enrol in SBA you have to be invited, a brand owner, use FBA and willing to hand full control of your prices over to Amazon (a competitor). There is also no details of how the Min Gross Proceed will be calcuated.