There are few things more frustrating than great products that fail to perform. They should be selling like hotcakes, but instead refuse to move because your pricing doesn’t match the market. With all your product content perfectly optimized, pricing is always challenging to get ‘just right’. You can easily lose out on large sales volumes just because your price is marginally higher than your competitor’s.
And the reverse is also true; without visibility over demand, you’re potentially missing out on better margins because your pricing is set too low for the market.
When it comes to winning your share of the Buy Box on Amazon (and other marketplaces), the ‘right price’ is critical. The only way to achieve this is with dynamic pricing generated by a repricing tool.
Your pricing: Too hot, too cold, or just right?
Static pricing can be very effective when demand and price points are stable, well-known factors.
But, in a competitive market with more energetic swings in demand, dynamic pricing achieves maximum sales volumes and margins. It’s also essential for winning a bigger share of the prized ‘Buy Box’ on marketplaces like Amazon - and this significantly uplifts sales.
This is where a repricer becomes an indispensable ecommerce tool – because it always gives you the exact right price for the market, delivering the best results for each SKU and marketplace.
What is a repricer?
A repricer is a software tool that automatically ensures you’re always offering the best price on a marketplace. It works by monitoring the prices of competitors and dynamically updating prices for each specified product, so you always have the best price needed to win the Buy Box.
Repricers automate two time-consuming tasks; they perform market research on current pricing and monitor changes in competitor’s prices and they make dynamic updates to your pricing automatically. This saves a lot of manual work while achieving the optimal results for each product.
As soon as your competitor runs out of stock or raises their pricing, your item’s price is automatically adjusted. You get the best possible margins, without missing a sale.
So that’s what a repricer is, in a nutshell. Now, let’s look at why it’s so important to use it.
Why is an Amazon repricer so important for ecommerce brands?
Amazon’s Buy Box is well-known, and it captures the vast majority of the US$514 billion sales revenue on this global marketplace. Many people see the repricer as only being useful for selling on Amazon – and it can achieve superior selling results on this major marketplace. But it’s not the only marketplace where dynamic repricing makes a difference.
By using a repricer tool, sellers can also get the best results on other marketplaces like Bol.com and Blokker, which allow sellers to make competing offers for the same exact product (with an identical GTIN/EAN).
Most importantly, by using the repricer in combination with great service, you can win the coveted ‘Buy Box’ that puts your listings in the most conversion-friendly position.
How does repricer software help win the Buy Box?
When you win the ‘Buy Box’, your listings become the default option for consumers searching for those products.
It’s estimated that over 80% of Amazon purchases are taken by Buy Box winners, and this figure can be even higher on mobile or voice shopping. The share taken by buy box winners is often higher on other marketplaces too; on Bol.com it can be as much as 95% of purchases.
Buy Box listings are selected by the marketplace’s own algorithms, based on certain requirements like location, shipping times, fulfillment method, returns, reviews, and – of course – price.
The lowest price cannot win the buy box on its own; it needs to come with the other requirements. But, without having the best price for a particular product, you just cannot win the Buy Box, even with the best reviews and service standards.
This is why repricer software is so critical for winning the buy box: it ensures you always have the best price on the marketplace when it’s profitable to do so.
The benefits of using a repricer
So long as you meet the other essential requirements for winning the Buy Box, having the best price is the only thing that’s needed to become the #1 choice on Amazon. A repricer gives you this, and other benefits too.
A while back, we conducted a study on the benefits of using the repricer tool on Bol.com. We uncovered that sellers using the ChannelEngine repricer tool can achieve the Buy Box position 50% more often than they did before, when they used manual price changes.
We also found that 85% of sellers using the ChannelEngine repricer were able to expand their assortment, adding 45% more items to their selection, on average.
With better margins, more free time, and more predictable performance, expanding your range is much easier to justify and manage.
How do you find the best Amazon repricer for your brand?
Not all repricers are created equal. The Buy Box position is highly competitive, and the Amazon algorithm will rotate the winner among the top performing sellers when there are multiple high-quality offers at the same price.
This means that your repricer tool can become a competitive advantage if it helps you gain the Buy Box more often than other sellers.
There are a few factors that must be considered when selecting the best repricer for Amazon:
Repricing speed
When your competition can consistently reprice faster than you, there’s no chance to catch up. They’ll always capture the ‘lion’s share’ of the Buy Box, and all the sales that come with it. Repricing speed has a direct effect on your share of the Buy Box. If you can reprice faster, your share is greater. This means that your Amazon repricer needs to synchronize your pricing at short intervals using real-time data. It’s inevitable there will be a delay, so the question is how much. Thanks to a robust integration between ChannelEngine and Amazon, the ChannelEngine repricer is able to regularly update prices with perfect accuracy and the shortest possible delay between API calls.
Accuracy
Repricers can work by either using API calls to make a direct connection with the marketplace, or by scraping prices from the screen. There’s a big difference in the accuracy of these two methods, as the scraping technique can be sensitive to errors: using the price excluding VAT, for example, instead of the full price. By contrast, a good API connection performs secure and accurate data exchanges between the marketplace and the repricing tool, minimizing the potential for costly mistakes.
Granular control
With the ChannelEngine repricer, you gain detailed control over how your repricer behaves by setting guardrails, rules, and business logic. For example, you can select whether to compete with Amazon itself, or if you want to compete with FBA listings (which might include your own), and determine other sellers you compete with based on seller ratings, their shipping times, or specified lists. You can even dive into the details of the competition, and see their pricing and ratings for each item. A repricing strategy needs to reflect the business it serves. At ChannelEngine, we have a great deal of experience with different use cases and we can offer guidance on the best repricing strategy for your brand.
Setting price limits and maximizing profitability
Repricers must allow you to set price limits for maximum and minimum pricing, factoring in margins and shipping. This ensures that your listings are always profitable, and prevents the repricer from making price changes that hurt your margins.
With ChannelEngine, you can set the repricer to increase prices when the market allows. In this instance, the repricer increases the price in preset increments up to the maximum price you have determined, or until the point where you would lose the Buy Box. This means you can capture the greatest margins – automatically – whenever the market conditions allow.
Winning the buy box on other marketplaces
Finally, you should also look carefully at whether your Amazon repricer can also work with other marketplaces.
Whether you are selling on multiple marketplaces already, or plan to at some point in the future, it’s vital that you can use this remarkable tool to maximize every sale, on each marketplace. In case you’re wondering, the ChannelEngine repricer works on more than just Amazon. The ChannelEngine repricer supports any Mirakl-based marketplace where multiple vendors offer products with the same GTIN/EAN. This is currently limited to Amazon, Bol.com, and Blokker, but the door is open to future possibilities too.
Disadvantages of using a repricer for Amazon
Sellers might worry that a repricing tool automates a ‘race to the bottom’. However, it’s something that the repricer can actually protect you from, because you set your own margins and rules.
Also, winning the Buy Box takes more than the lowest price. Many factors are taken into consideration, including location, fulfillment solution, seller status, reviews, and delivery options. Quite simply, if you’re offering better service than the competition, then you don’t need to compete as fiercely on price.
Remember: you’re in charge. The repricer always follows the rules you set up, so pricing always matches your brand’s market position and minimum margins.
Is the repricer worth it?
It’s clear that the repricer clearly benefits sellers by boosting their share of the Buy Box and total sales. As an integral part of the ChannelEngine platform, you can choose to use the repricer on whichever products you decide would benefit, at no additional cost.
When you’re not sure about pricing a new product, the repricer can help you attain the best results from your launch by combining automated market research and perfectly titrated responses to consumer demand.
Ultimately, a repricer tool is just doing what you would do yourself manually: researching the market and keeping your prices in line so you can win the Buy Box. The only difference is it automates this process, so it’s done for you (and in real-time!).
Want to see how the repricer works in action?
Book a demo, and we can show you how easy it is to set up and manage.
Then, sit back and enjoy the boost in sales!
