How to Start Making More Money on Amazon
Amazon can feel like a lawless land, where price wars are regular with frequently slashed margins. But it’s possible to boost sales and margins simultaneously on the marketplace, regardless of how many competitors you have. It seems like the only retailers having fun on the marketplace are niche retailers and the gorilla in the room: Amazon itself. But now’s the time to have more wiggle room with your margins and make Amazon one of your most profitable channels possible.
There are a number of ways to have your cake and eat it too on the Amazon marketplace. But for the sake of simplicity, we’ve narrowed it down to the top three tips merchants should consider when selling on Amazon to make more money.
Don’t Race to the Bottom
With millions of price changes a day, the Amazon marketplace is the most competitive in the world. The adoption of dynamic pricing strategies has made static pricing completely obsolete, not only on Amazon, but in the eCommerce industry as a whole. When it comes to the Amazon marketplace specifically, many retailers engage in price warfare to win sales.
Price optimization consists of so much more than lowering your prices. It’s about making calculated price changes that appease not only your shoppers, but your bottom line as well. Price optimization strategies can help you find the best price that takes more than your competitors into account. By considering demand, brand equity, and more, price optimization can find a selling price that is often higher than your competitors’ and competitive enough to help you land in the coveted Buy Box.
Dynamic Assortment Strategies
A static pricing strategy is only made worse by a static assortment strategy. If you would change your prices in accordance with your competitors, then why not change up your product assortment? Monitoring your competitors’ product assortments can help you compete more efficiently and give you an understanding of how you can improve your business in the frame of the market.
But the real magic happens when you implement price optimization into your dynamic assortment strategy. It works well with every reason listed above. Price optimization helps you find the maximum price threshold for products you already own, and tells you if the product you’re thinking of adding to your own assortment will bring in profits you’re comfortable with. All three of these will put more money in your pocket.
Don’t Try to Keep Up with Amazon
Amazon also historically has shown little regard for its own margins. The company is hungry to win sales, but it has so much additional income from its cloud services and more that it doesn’t have to worry about maintaining certain margins. Therefore, it will always have the opportunity to undercut your prices.
So let the retailer have its fun on its own marketplace, you just worry about some of the other 2 million sellers while you’re there. Using competitive intelligence to your advantage is the best way to get ahead.
But how do you obtain competitive intelligence and act on it? Wiser’s Amazon repricer does all the work for you to get into the Buy Box and milk as much profit as possible. To learn more about our repricer, sign up for a free demo here.