In this post I’ll explore the subject of automatic price adjustments on marketplaces such as Amazon and eBay.
I’ll cover how to get started, how repricing differs between marketplaces, avoiding the “race to the bottom”, and repricing tools.
- What is Marketplace Repricing?
- Getting Started
- Repricing on Amazon
- Repricing on eBay
- Avoiding the Race to the Bottom
- Repricing Tools
- In Closing
What is Marketplace Repricing?
In essence, marketplace repricing is simply a seller making changes to the price of products they offer on platforms like Amazon and eBay. They might do that for any reason, but typically it’s in response to competition.
On marketplaces, different sellers’ offers are shown side-by-side so buyers can compare prices very easily, and uncompetitive prices disappear into the background noise. To be successful, sellers need to find a way to rise above the crowd.
Repricing? Hell yeah! Even simple rules work on Amazon, without software. One of the businesses I’ve worked with gets an extra 1,000 to 1,500 orders every single week because of automatic repricing. It’s amplified because their competitors don’t have repricing software, but still it’s obscene what it can do.
Matthew Ogborne, Co-founder, UnderstandingE.com
There are three factors that best characterise marketplace repricing today: huge scale, easily available automation technology, and the marketplaces’ sophisticated seller ranking algorithms.
The volume of activity on marketplaces like eBay and Amazon is enormous, and the scale of repricing is huge too. For example, Amazon.com implements more than 2.5 million automated price changes every day to stay competitive not only with other sites, but also merchants selling on their own third-party marketplace. High street retailers like Walmart and Best Buy also change their prices constantly – in their cases around 50,000 times each month.
Major retailers have been “spying” on each other for decades, and setting their prices accordingly – before the internet they would send staff to competitors’ stores to manually note down prices. Ecommerce has made price comparison easier for the retail establishment, and also made automatic repricing possible for marketplace sellers of almost any size. Repricing tools are available as standalone services, or as part of integrated marketplace management tools. Repricing software is itself a competitive market, with plenty of options available.
The third factor is the most complex: successful marketplace repricing is not just about price. Amazon and eBay have sophisticated algorithms which decide how sellers rank for every product and keyword search, and price is not the only factor they consider. The seller with the lowest price does not always sell the most.
If you are lucky enough to have only a few SKUs (stock keeping unit – product lines) and little competition, you can monitor your competitors and update prices manually. That’s a great position to be in, but not the reality for most sellers – to build a successful business they need many SKUs, and usually find themselves alongside tough competitors. Most sellers need automation to do serious repricing.
But sellers shouldn’t look for a repricing tool straight away – selecting the right tool is not the only problem to solve in order to do repricing well. Before looking for software they should consider that:
- Repricers vary in cost, features and methodology. How much can you afford? Which features you need? How much time can you spare for setup and ongoing configuration?
- Your data may not be ready for repricing. Repricers analyse the market and your own data to make pricing decisions. Mistakes can be made if your data is incomplete or inaccurate.
- It’s easy to miscalculate your own costs. If you allow a repricer to go too low, you can lose money. If it doesn’t go low enough, you won’t make any sales.
Instead of leaping in too early or (just as bad) doing endless research upfront, it is possible to get into repricing gradually. Here’s what I suggest:
Step One: Reprice Manually
Yes, you probably need to automate your repricing, but there’s much to be said for doing some manual experimentation first.
Spend a couple of hours manually repricing things yourself, and see the change that happens. Drop an item by a dollar or a pound, look at the prices and watch how many sellers instantly follow you down, how many ignore you, how many go halfway down. You need a bit of tactile hands-on experience before you start with a repricer, because that will give you a much deeper understanding of what repricers do – how they work.
Shmuli Goldberg, Director of Marketing, Feedvisor.com
Step Two: Know Your Costs
Successful repricing isn’t just about price, but it’s a key factor, and if everything else is equal then the lowest price will win the day. If you are ready to compete seriously on price your margins will shrink, so knowing all your costs is absolutely critical to remaining competitive and avoiding losses.
Sellers normally have a good picture of their direct costs – stock, shipping, packaging etc. With indirect costs – salaries, premises, storage fees, currency exchange and so on – they can be on shakier ground. Spend a little time putting all those costs together, so you can factor them into your unit cost.
Step Three: Choose Products to Reprice
Your intention may be to use automatic repricing on all your products, and go all-in from the start, but there are two main risks with that approach: insufficient preparation leading to pricing errors and losses (or poor sales), or too much preparation meaning you never get off the ground.
Instead, select a small sample of products to reprice. That way, you can prepare the data thoroughly and quickly, as you are only working with a small batch. For example, if you sell two hundred jewellery products choose a selection of twenty that represent the whole – not all at the cheapest end or of the same brand.
The key data points to decide are your floor and ceiling (minimum and maximum) prices for each product. The purpose of a floor price is straightforward – to prevent losses and unacceptably low margins. The need for a ceiling price is a little complex:
- No-one will buy at an astronomical price.
- Amazon’s General Pricing Rule (also known as Price Parity) policy in the US mandates that sellers cannot offer a lower price off-Amazon. Affected sellers should set the ceiling price to the price shown on their own website. (Note that this policy no longer applies in Europe.)
- A ceiling price helps repricers find the optimal price more quickly in cases where there is little or no competition.
The experience of getting your data in order for a small number of products will help you improve your process when you decide to include more products – and minimise the time lost if you decide not to take it further.
Step Four: Choose a Repricer
You are just getting started, so choose a low-cost standalone repricer that can handle one of your target marketplaces. Or use the repricer built into your marketplace management solution, if you use one and it has that feature.
There’s a multitude of software that can get you the Buy Box on Amazon. We set a maximum price and a minimum price, and the software continually reduces our price if we are competing with someone, right down to our minimum. After that, we exit the fight.
Tayyab Akhlaq, Managing Director, My1stWish and Genie and the Geek
The repricer you choose now might not work with all the marketplaces you trade on, or handle the full volume of SKUs that you have. But that’s OK: you get started this way to build your own understanding, and learn what the effect of repricing is likely to be on your business. It doesn’t need to take a long time – just a few days may provide enough learning so you can decide on the next step.
Step Five: Monitor, Review and Adjust
Now you have automatic repricing in place, so pat yourself on the back! The scale should be large enough to create a constant “feedback loop” of information to use in your next decisions, but small enough to avoid the greatest risks.
Make sure you have the systems in place to monitor the benefit you are getting, then review what the data is telling you and make adjustments. If it’s going well, those adjustments might be to expand to more products, if it’s not going well you could change your configuration or switch to a different set of products.
Always keep watching the numbers. One way of monitoring the Buy Box price on Amazon is camelcamelcamel. Although designed for buyers, camelcamelcamel features configurable price drop alerts and detailed price history charts which can be very useful for sellers.
Even if repricing starts to work very well for you, remember that factors outside your control can always change – competition, marketplace rules, buyer preferences. What works now is unlikely to work forever.
Repricing on Amazon
When people talk about marketplace repricing, they are often – without even mentioning it – only talking about Amazon. For many, marketplace repricing and Amazon repricing are synonymous.
It is possible to reprice automatically on other marketplaces, but on Amazon the practice is more common and the technology more mature. I see three important factors driving that: the strength of the Amazon catalogue, the “Buy Box”, and Amazon’s own support for repricing technology.
The Amazon Catalogue
From the outset Amazon has been underpinned by a product catalogue. On Amazon, there’s no possibility to list a product that isn’t connected back to the catalogue, although you can add new products to it. If you do add new products, they become part of the core catalogue and other sellers can offer them too.
The catalogue-driven nature of Amazon means it’s very easy to find a specific product. In fact, if the catalogue is working as it should, each unique product will exist only once and have a single product detail page. That is in stark contrast with eBay, which is listing-driven and searches often yield thousands of results for the same product.
When a product has one description, one set of images, one collection of reviews, and so on, there is relatively little left to distinguish between multiple sellers of that product. How does that affect Amazon sellers? Well, they must do their utmost to optimise the few attributes under their control – and the one thing Amazon sellers can control fully and frequently is price.
The Buy Box
When a group of Amazon marketplace sellers get together the conversation will quickly turn to the Buy Box, and specifically to “winning the Buy Box”. The tone will run the whole gamut of enthusiasm, resentment, confusion and violent disagreement. To the uninitiated, the heated conversation will be completely baffling.
The Buy Box is simply the box at the top right corner of the product detail page which contains the “Add to Cart” (or Basket) button. The format varies, but an example is shown here. (This particular Buy Box is for a product that is not available new either from Amazon or a third-party seller who uses Amazon FBA to fulfill their orders.)
Winning the Buy Box means being the seller who gets the order when a buyer adds a product to their cart and completes check out – in the example shown btrdev has won the Buy Box.
Amazon provides their own explanation of how the Buy Box works. Well, explanations, to be more accurate, which vary between Amazon’s different territories:
- How the Buy Box Works on Amazon.com
- How the Buy Box Works on Amazon.co.uk
- How the Buy Box Works on Amazon.ca
It’s worth spending time reading Amazon’s own help material on the Buy Box. Also navigate up one level from the links above to “Enhanced Listing Placement” to read about the Buy Used box and Buy Box eligibility. (Note that the guidance on Amazon.com refers to “Featured Merchant”, but this status is no longer shown on the site – Buy Box eligibility is the new equivalent.)
Despite the differing documentation, there is common ground on the criteria for determining the Buy Box winner:
- Price including shipping
- Stock availability
- Customer experience
The last one – customer experience – is where Amazon lumps in a whole bunch of other factors. Those factors are used to determine Buy Box eligibility – just the possibility of winning the Buy Box – and include:
- Order Defect Rate (ODR) – a measurement of “bad” orders indicated by poor customer feedback, A-to-z Guarantee claims and credit card charge-backs.
- Delivery, including how quickly orders are shipped, speed of delivery, and participation in FBA.
- The amount of time the seller has been active and their volume of sales.
- Other seller performance metrics.
Amazon do not disclose exactly how the different factors interact, where the cut-off points are, or what the other metrics might be.
Amazon’s Buy Box algorithm is sophisticated, constantly being updated and tuned, and not transparent. Feedvisor, however, through their business as a repricing tool supplier, has access to large volumes of data on price, sellers, and Buy Box winners. They have used those insights to produce a comprehensive guide called The Buy Box Bible (PDF download, email address required).
I recommend The Buy Box Bible as an in-depth guide to winning the Buy Box. FeedVisor have kindly given me permission to reproduce the summary “Cheat Sheet” from the guide below. Download the full guide for a lot more information on each metric.
Amazon’s Support for Repricing Tech
You might imagine that marketplaces take a dim view of repricing – millions of sellers constantly modifying their prices will put a heavy load on their servers. And to some extent, the sellers with the best repricing technology will have the most success, which may seem a little unfair to those sellers who excel in other important respects such as shipping speed and customer service.
But Amazon is hell-bent on providing customers with the best experience possible, and that includes low prices. By enabling third-party sellers to reprice automatically, they help drive prices lower and increase the likelihood of a buyer purchasing through Amazon rather than another website. Their sophisticated ranking algorithm means that sellers cannot succeed by sacrificing delivery speed and customer service to provide low prices.
Amazon help support repricing with technology including the Amazon MWS Subscriptions API, Feeds API, and automatic detection of possible pricing errors.
The Subscriptions API, released in July 2013, provides fast notifications of “events” on the Amazon marketplace, including the AnyOfferChanged notification. The AnyOfferChanged notification is sent whenever there is a price change for any of the lowest 20 offers (calculated as price plus shipping) for a specific product and condition (new or used). The new API has been quickly adopted by tools providers as notifications are timely and rich with data, including Buy Box eligibility, shipping time, whether FBA is used and more.
The Subscriptions API is going to offer merchants much finer control over how listings reprice since they’ll be able to see the top 20 competitors now — not just the cheapest. That will effectively allow them to choose to compete with featured merchants or specific merchants (including Amazon), and ignore all others or choose different “beat by” rules when repricing against certain competition. We’re going to see ever more creative repricing strategies.
Seamus Breslin, Design and Marketing, RepricerExpress
Amazon’s Feeds API allows sellers to change the price (and other attributes) of products they offer on Amazon. Sellers can reprice as much as they want through the API, but Amazon’s product detail pages update only every fifteen minutes. So a price war can go on completely behind the scenes: prices change, notifications are sent, further prices change in response, and so on. Finally, the product pages are refreshed and the resulting price changes are shown – including the winner of the Buy Box.
Amazon doesn’t allow repricers to completely run riot on their marketplace. Pricing errors have happened in the past, including a mundane book about flies being repriced to over twenty million dollars, and a repricer malfunction in 2012 causing thousands of items to be listed for a penny.
To prevent customers being disappointed by erroneous prices, Amazon detects potential errors and can deactivate affected listings. Sellers can avoid this by setting minimum and maximum prices or opt out entirely (or UK version, Amazon login required).
Repricing on eBay
Sellers who concentrate just on Amazon or eBay can have polarised viewpoints on the merits of each marketplace. That’s not surprising: eBay’s roots are as a trading community, while Amazon has always been a retailer in its own right and is an unusually ferocious competitor (see The Everything Store).
Repricing is one of the many areas where eBay and Amazon sellers differ: it’s much less common on eBay. I think that comes down to the eBay selling culture, and eBay’s approach as a listing-driven marketplace. Despite that, there is a very important factor pulling in the other direction: eBay’s Best Match algorithm.
eBay Selling Culture
eBay gives sellers a lot of freedom over how they present themselves and their products. Yes, there are plenty of rules to comply with, but that is in part because of the wide freedom sellers have to offer almost anything for sale. The free-market philosophy on eBay means that sellers can:
- Enter the marketplace relatively easily, without retail experience.
- Describe products in their own way and provide their own images, even if the product has stock images or is already offered by another seller.
- Sell the same product in many different ways – personalised or bundled with accessories, for example.
- Style their listings with HTML, enabling not only rich text formatting but also high-quality branded designs.
- Offer unlimited delivery options including collection in person.
I see the difference between eBay and Amazon like this: you sell on eBay, but through Amazon. eBay sellers tend to feel more like traders in their own right, they just happen to have set up shop there. On Amazon, the marketplace is tightly controlled and orders are passed on to sellers when Amazon (via their algorithms) sees fit.
Not a lot of eBay sellers think about repricing tools, but they should. If you are selling new items, have a condition to only monitor new items and don’t go against auction items – just monitor fixed price. You might run into some listings that are incorrect, so look in your system to see if there are any issues or errors once in a while. As long as you set it up correctly the first time, you shouldn’t have any issues.
Carlo Silva, CEO, 2nd Office
eBay has a product catalogue, but its use is optional except for some electronics and media categories (UK version). A lot of the time the catalogue is not used, and sellers can always add their own images and description.
Even the listing title (which a layperson might expect to be an unambiguous way to identify the product for sale) is normally optimised, by using the maximum number of characters allowed and including popular search keywords.
What this means is that it is much more difficult to identify identical products on eBay than on Amazon, and therefore to reprice accurately. It’s not unusual for eBay sellers to dismiss repricing on eBay as unacceptably risky, unnecessary or even impossible.
Despite the difficulties of repricing on eBay, there are automatic eBay repricers available. The developer of dedicated eBay repricer Price Spectre, NullApps, has explained in the Web Retailer forum and on their own site how they are able to reprice on eBay – by supplementing catalogue listings with keyword matching.
eBay’s default sort order for search results is Best Match. eBay have been honing the Best Match algorithm since 2008, and although it has not been analysed to the same extent as winning the Buy Box on Amazon, there is expert opinion and seller observations indicating that quite similar factors are considered, such as:
- Feedback including Detailed Seller Ratings (DSRs).
- Outstanding resolution cases or policy compliance notices.
- Free shipping and a buyer-friendly returns policy.
- Historical sales volume.
- Conversion rate: the proportion of people who view a listing and then go on to buy – essentially a vote that the listing is what they were looking for.
Several other factors have been suggested as having an impact on Best Match, but without much consensus or compelling evidence. For example, there are reports that eBay’s search engine penalises listings with a sophisticated design. My guess is that this (if it really does have an effect) is more likely to be due to poorly formatted HTML, not just the presence of a design.
Best Match is our measure of the Buy Box for eBay. When we manage to land the space in Best Match that’s a measure of success for us. Amazon has their rules well documented – how you get into the Buy Box position – eBay does not have those rules quite as well down, so they fluctuate a little bit. It’s a very hungry baby to make sure eBay repricing works effectively.
Zee Mehler, Chief Marketing Officer, Appeagle
eBay and Amazon differ in many ways, but most dramatically in the display of products offered by multiple sellers. Amazon shows a single product page with the Buy Box showcasing the best offer, and puts other sellers’ offers on a separate page. eBay shows all sellers’ listings as search results, and orders them to show the best offers at the top.
But if Amazon took the full list of sellers’ offers and made that their primary product page, or eBay consolidated all their separate product listings onto one page and showcased the top offer, the two marketplaces would look very similar.
The effect of both Amazon’s Buy Box and eBay’s Best Match is very similar: to push to the forefront low-priced products offered by sellers who provide great customer service. Amazon’s Buy Box and eBay’s Best Match aren’t all that different, so why shouldn’t repricing be as effective on eBay as it is on Amazon?
Avoiding the Race to the Bottom
The “race to the bottom” or “race to zero” is closely associated with automatic repricing. It’s a logical argument: if sellers consistently beat each others’ prices, even by a small amount each time, prices will inevitably drop to a level where sellers are losing money and have to exit the market, or go out of business.
After prices hit rock bottom you might expect them to rise back to a stable level. But with very low barriers to entry, new sellers can quickly come on board and start the race again. On eBay in particular, there is a constant churn of new sellers who will compete desperately on price – either to build feedback, clear inventory they have overpaid for, or simply through inexperience.
So how can sellers avoid joining the race to the bottom, or at least minimise the impact it has on them? That’s a question that goes to the heart of selling on marketplaces, and it doesn’t have a straightforward answer. Sellers cannot just remove price from the competitive landscape, but they might be able to sidestep the problem and avoid competing only on price. Here are some suggestions.
Position Yourself Differently
On eBay, you can distinguish yourself as a seller in a number of ways. For example:
- Use a professional listing design.
- Provide a great description.
- Add expert advice or insights to listings.
- Have outstanding images.
- Set a generous returns policy and highlight it to buyers.
- Show your personality.
Encourage buyers to trust you as a seller, help them understand exactly what you are selling, and clearly explain why they should buy it. Take advantage of eBay’s flexibility, because none of this is possible on Amazon (except if you add your own products to their catalogue – but even then only to a limited extent).
Branding is so essential. Decide if you are selling in a category, and pick a branding that has some kind of tie and invokes an emotional response in your buyer. If you’re selling everything under the sun, have a strong brand that’s consistent but almost emotionless.
Elizabeth Hitchins, Freelance Consultant, KidsonTalks
Understand Best Match and the Buy Box
Not having the lowest price may reduce sales, but it is not necessarily the kiss of death. Both Amazon and eBay include many factors in their algorithms – sales can certainly be made without having the lowest price. And if your competition isn’t up to scratch in other areas, more sales can be made without having the lowest price.
On Amazon the Buy Box can rotate between multiple sellers, if the algorithm ranks them equally. eBay provides a more level playing field as Best Match determines only the order of results, not a single overall “winner”. The important thing to understand is that it’s not an all-or-nothing battle on either marketplace.
- Offer fast and free shipping.
- Provide excellent customer service.
- Address negative feedback and claims quickly and effectively.
- Use FBA on Amazon (in addition to the above).
Retail can be simplified quite dramatically: in order to succeed you either need to be the least-cost provider or you need to offer something that nobody else has. Both of those fall to your buying processes – focus on buying the right products at the right price. Once you’ve got the right products, you can position them differently and you can approach different channels.
Dan Burnham, Head of Account Management, eSellerPro
How do you offer something nobody else has? Sellers have to answer that question themselves, and it will not be easy. If it was, everyone else would be doing it and it would no longer be something nobody else has (also the central fallacy of most get-rich-quick schemes).
There are, however, models for sourcing and product creation that are used often and can be successful:
- Bundle products together to create unique combinations that help buyers.
- Sell personalised, customised, handmade or otherwise unique products.
- Look abroad for brands unavailable in your own country. Niche or designer brands with a narrow target market may work better than mass-market products.
- Buy white-label products direct from the manufacturer and add your own branding, packaging, add-ons, enhancements or instructions.
- Cultivate a relationship with a brand that sells to a limited number of retailers.
- Create you own products from scratch.
Online selling is a retail business. Small businesses who sell only online may not think they have much in common with the old world of high-street retail, but when it comes to sourcing and developing products there is not a vast difference. Learning and inspiration can be found by studying traditional retailers as well as online competitors.
Use a Repricer
Repricing and the race to the bottom are not the same thing. Repricers allow more sophisticated rules than simply “be the cheapest”, or even work without rules and determine automatically which price will maximise total profit. Sometimes repricing software will actually raise prices – using one does not commit a seller to the race to the bottom, and can even help avoid it.
You can get repricing software in one of two ways: as a specialist tool that just does repricing, or as part of an integrated marketplace management system.
Specialist repricing tools have the typical advantages of most single-purpose software:
- They have only one function, so tend to the perform that job very well.
- The lock-in effect is relatively low: if you want to move to a different service, the transition should not be very disruptive.
On the other hand, if you already use a marketplace management system and it includes a repricing function, that should be a quick and inexpensive way to start learning about repricing, even though you might move to a standalone repricer later.
If you are considering changing your marketplace management system (or thinking about using one for the first time), it’s worth investigating its repricing support. But it’s not a core feature like inventory, listing or order management – I wouldn’t recommend changing to a management system for its repricing support if it’s lacking elsewhere.
For that reason, I’ve only included standalone repricers in the table below. If you are looking for a new marketplace management system, take a look at Multichannel Management in the directory.
Standalone Repricer Comparison Table
|Name||Marketplace Support||Trial||US$ Price per month for # SKUs|
|ChannelMAX**||Yes||Yes||US, UK||30 days||15||35||65|
|Price Spectre||Yes*||7 days||20||100||400|
|Mean Repricer||Yes||30 days||22||37||72|
|BQool Repricing Central||Yes||14 days||25||50||POA|
|XSellco Price Manager***||Yes||14 days||70||70||200|
|Marketplace Repricing||Yes||No trial||399||399||990|
|FeedVisor||Yes||14 days||$1,000 + 0.5% of sales|
* eBay support is for catalogue items only, with the exception of Price Spectre and WisePricer.
** ChannelMAX is a full marketplace management system, but is also available as a standalone repricer.
*** RepricerExpress and XSellco have separate fees for USD, GBP and EUR. US dollar fees are shown here.
To aid comparison prices have been rounded. In some cases pricing varies depending on update frequency – the price for the lowest frequency (i.e. highest delay) update is shown above.
The table above isn’t intended to be an exhaustive list of all the repricers on the market. For a more complete listing, with detailed compatibility information, reviews and more, see Marketplace Repricing in the directory.
How to Choose: Marketplaces
Repricing is still very much associated with Amazon, so it’s not surprising to see almost all repricers offer Amazon support.
The important question to consider is if you want to reprice on any other marketplaces. Relatively few repricing tools support eBay. Of those that do, ChannelMAX and Appeagle rely on listings being associated with eBay’s product catalogue – they can only reprice catalogued items against other catalogued items. Price Spectre supplements catalogue IDs with keyword matching and claims good accuracy with that approach.
Rakuten Buy.com is supported by ChannelMAX and Appeagle, and Rakuten Play.com only by ChannelMAX. Rakuten’s sites are catalogue-driven like Amazon so repricing accuracy is generally not an issue.
How to Choose: Price
Most repricing tools have low entry-level pricing, and remain very affordable even for a high volume of 20,000 SKUs. For high-volume sellers with very thin margins, RepriceIt followed by RepricerExpress, ChannelMAX and Mean Repricer are all well under $100 per month for 20,000 SKUs. They do differ in update frequency, however.
Four repricers position themselves at the top end of the market: Marketplace Repricing, WisePricer, FeedVisor and Teikametrics. Sellers new to repricing, even if they have very high volumes, would benefit from learning on an entry-level tool rather than a high-end repricer. But those with sizeable budgets and repricing experience might benefit from taking a demo of a high-end system, to see if they offer any additional opportunities.
How to Choose: Rules-Based Versus Algorithmic
All repricers allow more sophisticated control than simply beating the lowest price by a penny. Many provide that control by allowing the user to define a set of rules that tell the repricer what to do for a specific product or group of products, for example:
- Beat the existing Amazon Buy Box winner by a specific amount or percentage.
- Aim to appear in one of the top three price positions.
- Only compete against sellers with a specific minimum feedback rating.
- Only reprice against items of a specific condition: new, used or refurbished.
Rules-based repricing offers a huge amount of control, and that flexibility can be very useful. The downside is the time and effort the seller needs to spend deciding what the rules should be, and configuring the system.
The alternative approach is algorithmic repricing. You only need to provide an algorithmic repricer with the minimum price you are willing to accept for your products. The system will then use its own predefined rules, competitor data and price experimentation to find the optimal price – one which maximises sales while keeping the price as high as possible.
Note that with algorithmic repricers you rely entirely on the effectiveness of their algorithm – two algorithmic repricers could achieve quite different results. In contrast, two rules-based repricers with exactly the same configuration should set the same prices.
ChannelMAX is an example of a rules-based repricer, offering sixty repricing rules. FeedVisor is a purely algorithmic repricer, having no rule settings at all. Appeagle allows the seller to choose either rules-based or algorithmic repricing, on a product-by-product basis. WisePricer also supports both rules-based and algorithmic repricing.
How to Choose: Update Frequency
Repricers vary quite widely in how often they will check for price changes. For example:
- RepriceIt allows up to ten daily or weekly price check schedules.
- RepricerExpress has an hourly limit of 50,000 so sellers with fewer SKUs can reprice more frequently.
- ChannelMAX and Appeagle offer more frequent repricing (including a continuous option) for an additional fee.
Frequency matters most when competition is high, particularly if competitors are also repricing. At peak sales times, waiting an hour or more to react to price changes could result in significant lost sales. Sellers with highly seasonal trading could look for a solution which allows the frequency to be “boosted” temporarily rather than committing to a higher fee in the long term.
Buyers want low prices, and the marketplaces – whose business it is to satisfy buyers – do a fantastic job of getting those low prices for them. Marketplace sellers can choose to sell competitive products (which the majority are) or try to carve out a unique niche which protects them from direct competition – even if it’s only for a little while.
But most sellers will offer products that many others also sell. In that case, it’s crucial to have competitive prices. In an environment where millions of sellers are present, the job of manually monitoring the competition and adjusting prices is hard – often prohibitively so. That’s where automatic repricers come in.
Repricing is not a silver bullet for eBay and Amazon sellers, but nothing is. It’s a type of automation that should be assessed and measured, and adopted fully if it provides a positive return on investment. The marketplaces automate their decision on who the best seller is, so every marketplace seller should work to understand how that decision is made and use everything they can to make it work in their favour.
I hope you have enjoyed this guide, and found it useful. I look forward to reading your comments below!