In this article, we are going run through some tips for pricing your Amazon Products. If you looking to sell products on Amazon, either brand names or private label, determining how much you should charge for your products can be a very difficult task. You do not want to charge too much, or else no one will purchase the product. However, you do not want to set the price too low or else your profit margins will not be large enough for you to receive any benefit.
There various factors to consider, your competition’s prices may be extremely low, you could be up against private individuals, big companies or…Amazon themselves! Competition is normally very fierce no matter what category you are selling in and some companies such as Amazon in particular, can afford to keep the margins small and in some instances could even be selling products at a loss to move stock on etc.
The best way to determine price points is to analyse your competition and research through some angles which we will cover in this article.
So what the main points that you should be looking at when pricing up your items selling price?
If your competiton is Amazon then dont be in to much of a rush to beat their price, they will very easily match your selling price or even undercut you and then you run the risk of playing a game that can ultimaley push the price down on the product that you are selling over an extended period of time.
This video on YouTube from Andy Slamans gives you some more details about pricing up your products when selling on Amazon:
SUPPLY AND DEMAND
Price does not always reflect the caliber of the item, it could simply be supply and demand, if an item is hot, like the latest Christmans presents that kids just need to have, it could just be that and not the fact the item looks like a plastic piece of junk. Supply and demand will always push prices up.
LACK OF COMPETITON
If the competiton is low for your item on Amazon, and therefore difficult for you to get a good sales marker, it is possible for you to search the exact same product online and decide the price by what other online reatialers are selling it for. Low competiton could mean that you are in control of establishing a price point for your products and therefore you will find yourself in a position where you are not being dictated to by others.
As mentioned before, price can impact the demand of an item, even expensive items. Sometimes Amazon have flash sales or certain sales days e.g. Black Friday, so even an expensive TV unit that has had a small price drop could suddenly start to sell in much larger volumes that the previous months that the item has been on sale for. People love a price drop through a sale, even if it is just by a few bucks or a couple of pounds.
COMPETING AGAINST LARGE COMPANIES – USE THIS TO YOUR ADVANTAGE
If you are are not competing against individuals but against other companies, possibly large ones, you could find yourself in a strong position, for example, if you are working from home and storing your items in a lock up or a garage or using Amazon FBA, you can then gain an advantage as you do not have to pay overhead expenses, for example, rent for a building, staff etc. Yes, the larger companies could have more buying power but they also have more overheads so use this to your advantage.
Also, large companies could fall foul of miscalculating the sales volume of a particular item, conservatively, a business must not overproduce an item, they could then look to slash the price of the product to move it on so keep an eye on this and do not get caught in a fire sale war.
Hopefully, these tips for pricing up your Amazon products at the right amount will enable you to sell more items and stay ahead of your competition.