Pricing can affect every phase of your business.
A higher price will deliver more profit with every sale. Price your product too high and you shrink your customer base. Price sends a subtle message about your brand. It impacts the products you compete against in the market.
Price is a critical tool for successful businesses. It’s even more important for businesses operating in the Amazon marketplace.
Not to worry, we can help. We’ll share successful strategies businesses you can use to price your products on Amazon.
How to Price your Products on Amazon
Often, pricing comes down to instinct as much as market data. While there are no rules in pricing, there are a few strategies you can use to price your product on Amazon:
1. Determine your Costs
The first step in pricing is to evaluate your costs. Many businesses make look only at manufacturing costs or shipping fees. You need to consider all your costs. Packaging is a cost that needs to be covered in pricing. E-commerce can incur many costs before the product ever reaches a customer. Whenever you sell a product on Amazon, you will have to pay marketplace fees. Using Amazon FBA (Fulfillment by Amazon) will incur additional fees. Take the time to determine all your costs so you know what minimum price you need to reach before you start making a profit.
2. Consider your Brand
Consider your brand before setting your price. If you are selling a high-quality, premium product, then you are safe setting a higher price. Never let your price dip too low by using the minimum advertised price (MAP) through Amazon. Keep product quality high, because customers who pay a premium price expect quality and service. If you are selling a low-cost product, then look to use variable pricing to capture as many sales as possible.
3. Develop a Strategy
Now is the time to look ahead at your pricing strategy. If you are also selling products on your website, then consider using your pricing strategy on the Amazon Marketplace to support your site. Look at pricing your product higher on Amazon. If you are looking for return customers, then consider how your pricing can affect customer retention.
4. Review Customer Feedback
Customer feedback and user reviews are critical to success in the Amazon Marketplace. Your pricing and the value you provide customers can have an impact on user reviews. Appropriate pricing is important, but if you don’t have the reviews to back up your pricing, you won’t find success selling on Amazon.
A Final Word on Pricing
Hopefully, you have a better idea of how to price your products on Amazon. There are money and profit to be made in e-commerce and on the Amazon Marketplace, but it requires smart and savvy pricing. With a little skill and insight, you can use pricing to deliver business success.
Need more help finding success selling on the Amazon Marketplace? Look into Amazon inventory management software or talk to our experts here at Systum. Our business platform is helping entrepreneurs like you find success with e-commerce.