No matter how much inventory you have on Amazon, the constant repricing of your items manually to outbeat the competition is a tremendous job. Even for beginners on Amazon, having few products, correcting the price every moment it goes up or down causes a headache. But when your inventory grows, repricing becomes a real problem.
With the Amazon Automate Pricing tool, you can solve this problem and automatically reprice your products whenever the price on Amazon changes. While that looks excellent on the surface, are there any hidden rocks in it? Keep reading to discover how the Amazon Automate Pricing tool works and its pros and cons.
What Is Amazon Automate Pricing?
Amazon Automate Pricing is a pricing tool that automatically adjusts your product prices against your competition to increase your chances of winning the Buy Box. This tool helps modify your product prices as they change on Amazon within the set limits without manual corrections.
Automated pricing can be applied to single or multiple items, and you can start and terminate it whenever you think it is necessary. You can choose from several scenarios, set minimum and maximum prices, and customize price limits.
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How Does Amazon Automate Pricing Work?
To be eligible for Amazon Automate Pricing, you must be on a Professional selling plan. To apply automated pricing to an active offer on Amazon, in your Seller Central, go to the “Pricing” tab > “Automate Pricing” and click “Get Started.” Once done, you must create a rule (repricing strategy) or select one of the 6 pre-defined rules. Also, you must set a minimum price. After that, repricing will start (usually within 15 minutes).
To automatically reprice your SKU, select from 6 pre-defined rules
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6 Amazon pricing rules
6 Amazon pricing rules
1. Competitive Featured Offer rule
With this rule, you can set your price below, equal to, or above the Buy Box. If you are alone in the Buy Box, repricing stops. This rule must be used when several sellers offer the same product.
2. Competitive Lowest Price rule
Competitive Lowest Price sets your SKU’s price below, equal to, or above the lowest price. When your price is the lowest, it will be adjusted compared to the next lowest price. This rule must be used when several sellers offer the same product.
3. Competitive External Price rule
With this rule, Amazon will match your price or limit it to the external price — the lowest offer for the same product from other retailers off Amazon (not from other Amazon sellers). If the sum of the price plus the shipping cost is greater than the competitive price on Amazon, you may not be eligible for the Buy Box.
4. A rule based on sales units
If you want to sell a specific number of units within a definite period, you can select to lower price to reach that target. This rule is used to sell excess inventory by a particular time.
5. Price synchronization rule for business price
This rule can be applied by business sellers. With it, you can offer single and multi-tiered discounts to business customers as a function of their standard prices. This rule ensures that the prices and discounts offered to business customers adjust in line with standard prices, regardless of how often the standard prices change.
6. Business Competitive Featured Offer rule
This rule is also used by business sellers. It sets the B2B single-unit price and up to five quantity tier prices below, equal to, or above the Buy Box prices of respective quantities. Repricing stops when you are in the Buy Box. This rule must be used when several sellers offer the same product.
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Example of the Amazon pricing rule
Pros of Amazon Automate Pricing Tool
Saving time and effort
In many cases, prices on Amazon fluctuate all the time. That may mean constant price adjustments 24/7. Repricing takes a lot of time and effort and doesn’t allow you to focus on other equally essential sales tasks. The Automate Pricing tool offers a hands-off approach to repricing and allows to concentrate on different aspects of Amazon business.
Outplaying competition
Automate Pricing lets you react immediately to any price changes. It monitors and adjusts your offer in real-time. That increases your chances of winning the Buy Box and helps you outbeat the competition.
No Extra Cost
Amazon’s Automate Pricing tool is free. It’s an excellent option for sellers with small amounts of capital who can’t afford to buy costly repricing tools. Automate Pricing helps them invest in their business growth at minimum cost.
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Cons of Amazon Automate Pricing Tool
SKU repricing is conditional
Amazon Automate Pricing has a significant limitation — sellers can’t enroll a product in repricing until an SKU appears in FBA. That limits your repricing options if you want to use Automate Pricing with merchant-fulfilled products.
Limited repricing options
Amazon doesn’t offer many preset pricing rules to Amazon sellers. Basically, non-business sellers have only 4 pricing strategies to choose from. Automate Pricing allows sellers to create their own new rules by choosing whether to compete based on feedback rating, fulfillment channel, and other parameters. However, some sellers may prefer to use multiple patterns with a proven outcome to reach their profit goals better.
No control over the repricing process
With Amazon Automate Pricing, you can’t control how often and when the product is repriced. For instance, you can’t select to raise your prices more often to earn more profits in the long run. And vice versa, immediate response to competitors’ price change may engage you in the price war and hurt your profit per item, while you could have been not reacting to the price decrease and waiting until the price goes up after a while. You have to rely on the tool and the rule you selected.
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Final Thoughts
Amazon Automate Pricing is an excellent option for sellers who want to grow their business but can’t afford to spend money on expensive repricing tools. It helps reprice your products to stay competitive.
However, when you set your price level, you must remember your break-even price and profit targets. Estimating product profitability right off is vital when researching the products you want to sell. Seller Assistant App allows setting a minimum price for the Amazon Automate Pricing tool and calculates your target ROI. It offers three price settings: break-even price (0% ROI), price with a 10% ROI, and price with a 20% ROI.
With Seller Assistant App you can set a minimum price for the Amazon Automate Pricing tool and calculate target ROI
Seller Assistant Аpp is an all-in-one product research extension incorporating features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines an FBM&FBA profit calculator, Quick View, UPC/EAN to ASIN converter, ASIN Grabber, Stock Checker, and Restrictions Checker in one tool.
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