It’s a known fact that “44% of online shoppers go directly to Amazon before checking any other site – Bloomreach”, making Amazon the world’s favourite store, which is quite a hard egg for merchants to crack. The presence of a lot of competitors makes prices dynamic, there’s constant change in prices just to keep up with sales.
Repricing is a relatively new aspect of marketplace E-commerce (like Amazon), that is here to stay. It involves sellers having to constantly change their prices, according to the market wave. Instinctively, both sellers and buyers are solely affected by repricing. Let’s take a peek look at how it works.
There are basically two types of repricing method; manual and automatic
Manual repricing involves physically adjusting the prices of the product, it can be time-consuming, with some sellers citing several hours per day that is lost due to manual repricing. This method of repricing can be very handy when sellers have few products.
However, automatic repricing involves an automated repricer like our eReprice that automates the whole process via advanced logic and developed algorithms that can be customised to suit the seller’s purpose. This software is capable of automatically changing the prices of products by itself. Therefore, sellers with a large number of products, who want to save time and money, can always opt for the automated repricer.
In the world of repricing, there are fundamental points such as minimum and maximum prices. The minimum price refers to the lowest possible price that a seller is willing to sell the product at, while the maximum price is a peak target that a seller wishes to make a sale at, so as to obtain the highest profit margin possible.
Regardless of the type of repricing technique a seller chooses to use, setting a minimum price is a major priority, this enables the seller to know just how low they can go with the price of their product without having to worry about losing money. This becomes very key, especially for sellers who choose to use manual repricing method, because they would have to keep very detailed records of their prices.
Conversely, with an automated repricer such as ereprice, sellers still need to set a minimum price, so as to enable the repricer know its limits and never to go below it. However, the maximum price is not always required, but by setting the maximum price, the seller gives the repricer the liberty not to be restricted by the market maximum price, rather by the sellers given price.
There are three strategies used in an automated repricer: algorithmic, custom, or a combination of both. Keep in mind that unlike ereprice, not all repricers offer the ability to use more than one of these strategies.
Each strategy bequeaths a different type of sale outcome. The algorithmic strategies are not customizable, i.e. they are rigid and have one a goal in mind, for example obtaining the Buy Box on Amazon. The repricer would place its focus on getting all products assigned to the algorithmic strategy within the Buy Box. Custom strategies allows the seller to set rules based on proposed outcome. Having the unique option to be able to switch between the two strategies makes up the ideal foundation for a pricing strategy.