This guest post was penned by Iulia Olteanu, an Amazon Repricing Expert for SellerEngine. The company developed of a suite of software products and services designed specifically for Amazon sellers. Check out SellerEngine.com for some of the ways that her energetic team can help your online retail business grow.
In my line of work, I meet and speak with Amazon sellers constantly. They reach out with their questions, and helping them is one of the things I like most about my job.
One of the most popular and pressing questions I hear is “How do I know when I should start using repricing software?” There’s no clear-cut answer, really, because no two businesses are alike. However, there are a few factors I advise sellers to consider in reaching their decision.
There’s a misconception among Amazon sellers that repricing software should only be used with large inventories. My experience says otherwise. Repricing software can work just as well for sellers with one SKU or millions of SKUs.
When you only have a handful of SKUs, you need to focus all your efforts on maximizing the value of every sale. The best way to do this is to experiment with automated repricing software like Sellery, until you find the best pricing strategy.
When you have countless SKUs, you need to apply the right pricing strategies for various scenarios. You also need to be able to adapt to changing market conditions within minutes. Sellery can readjust prices in real time, so you’ll always have the best pricing strategy for every scenario, however large your inventory.
Seasoned Amazon sellers know that there are certain trends when it comes to monthly sales volumes. The sales charts will show peaks and troughs before and after certain times of the year, like holidays or back-to-school season. A repricer can help adjust all prices in time for the expected sales boost or slump.
Secondly, there may be times when you need to bring sales up or down for personal reasons. You may be trying to boost sales for a specific brand to make way for a new order, or to get rid of unwanted inventory before you go on vacation.
How about when you need to sell less of a certain category and more of another for tax purposes? Or when you’re trying to gauge consumer demand by raising and lowering prices? It’s hard and time-consuming to do any of these things by hand.
Price and Ongoing Costs
Intelligent repricing software isn’t free and it doesn’t always come cheap. Sellers with low turnover may think a costly switch to an automated repricer is unjustified, especially if Amazon isn’t their main sales channel.
My advice is to think of it as an investment rather than an expense. When used correctly, repricing software should offset its costs. This could be either directly, through increased sales and profits, or indirectly, through time and resources saved.
If your software doesn’t pay for itself in a few months, then you should look into buying a different repricer. It’s not so much a matter of finding the best repricer out there, but rather the best one for your business needs.
Capacity and Resources
With or without a repricer, your inventory is likely to grow as you continue to sell on Amazon. You may need more warehousing space and more staff to deal with the logistics of it. As the business grows, you’ll need to sell more and earn more to cope with the costs involved.
Do you currently reprice all inventory items manually? Keep in mind that, as your inventory grows, you’ll find it increasingly difficult to do so. Unless you’re glued to your computer, you simply can’t reprice as quickly and as efficiently as a piece of software that works round-the-clock.
If you start using an automated repricer, you’ll also have every reason to expect higher sales volumes. You’ll need to use a repricer on an ongoing basis to make sure that you’re competitive and you’re not losing money.
Any repricing gaps in your pricing strategy will show in your bottom line. Ultimately, using a repricer consistently is the easiest way for you to sustain growth.
I can tell you from experience that the longer you wait before using repricing software, the harder it is to adjust. Changing your workflow will be harder if you become set in your ways.
As for sellers who start using automated software early, they tend to make it an integral part of their business. They develop a better understanding of the costs involved in selling on Amazon thanks to Sellery’s minimum price calculations. They can also monitor their inventory, sales and competition more effectively.
So, the sooner you can start using an automated repricer the better!