It’s evident how successful Amazon has been in the last few years as the number of third-party sellers on the marketplace continues to flourish. According to Statista, 45 percent of paid units were sold by third-party sellers in Q2 this year.
In the cutthroat world of Amazon, these sellers are seeking better ways to beat out their growing competition and make a profit. To keep competitors from driving your profits down, understanding how to set minimum and maximum parameters is paramount.
Min Price Breakdown
A min (minimum) price is simply the lowest total price you’re willing to sell an item for. Make sure to account for the following when factoring for the lowest price:
Built-in profit (optional)
We recommend this to make profit, otherwise you’ll break even.
How to Set Your Min Price
A good repricer requires a min price in order for repricing to take effect. As mentioned before, be sure to take shipping costs into consideration.
By setting a min price automatically using a repricing software, like Informed.co, your prices will never be repriced lower than your bottom line.
Formulating a min price is simple to do when using a good repricer. This can be done by factoring either your item’s cost or fixed price to a formula. You can also factor in the following (optional):
- Percentage of profit
- Additional fixed amount
- Shipping costs
Informed.co’s Amazon repricer has a custom Formula Builder feature which makes calculating your min price easy and accurate. It also has a game-changing feature that lets you auto-set min prices for any listings assigned to a strategy based on your desired minimum profit per sale, also known as profit-based min prices.
This will ensure you never sell at a loss and that you always earn a minimum profit per sale that you're comfortable with on every transaction.
You can also choose to set your min price manually. With Informed.co, min prices can be set per item on the individual listing level, either within the Listing page view, or by uploading a template.
Min Price Matters
It’s important to recognize the different ways to beat out your competition and how to do so intelligently.
Understanding the factors that go into formulating your min price will greatly affect any business. If it is done in a well thought out manner the opportunities are endless. If it is done hastily, you may end up losing money where you should have been gaining!
By Incorporating the factors listed above, you will know your numbers and protect your profit margin, both very important factors in eCommerce selling.