Many sellers like to price their products at the price of their competitors. But in fact, such pricing is a mistake, because there are many factors affecting the seller pricing. The profit target of each store is different, the pricing policy is different. If you copy other's prices, it's going to be suicidal. Experienced seller has its own pricing formula:
Amazon big catagory's commission is 15 %, other cost sellers will include promotion cost, tax cost, labor cost into it. Note: pricing is not static, the seller only use this as the standard, in the peak season, promotion, discount can change the price, but to ensure a profit map.
What are the factors affecting the pricing?
1. the demand of market. supply and demand of market has a significant impact on product . The "top of the Fingertip" is on fire, and you'll find that the competitors are on repricing. The "eclipse mirrors" become popular,amd its price increase, others have made millions of dollars, the same sales, you earn only a few hundred thousand dollars. It can be seen that when the market is in pursuit of a new product, will cause this new product supply should not meet demand, then its price will also rise. But when the products are sold under the line of the merchant line, the choice of buyers is diversified, the seller's profit is diluted, the price will return or even fall.
2. the cost of product cost includes raw materials, r & d, manufacturing, transportation and factory profits. Of course, in addition to the cost of raw materials, the purchase cost has a direct impact on the pricing, if the purchase cost of the products high, the seller to ensure profits, the price will naturally be higher.
3. if the platform monthly rent and Commission are sold on the Amazon platform in the name of professional sellers, in addition to the monthly rent, Amazon will charge a different proportion of Commission according to the different categories of products sold by the seller. This part of the cost, the seller will often also be included in the product pricing, ultimately by the consumer to pay the bill.
4. the transportation cost products from the factory to the online sales, the transportation cost is not small, will also affect the price of the products. If the seller chooses Amazon FBA shipments, it will also generate FBA header shipping costs and FBA storage charges. This part of the cost, some savvy sellers will also improve the price of the price to raise the price to compensate for the cost.
5. the promotion holiday Amazon has the member day in mid – July, the second half year has " black Friday ", Christmas promotion. Every time these holidays come, Amazon adjusts prices on a large scale to boost sales.
6. brand image positioning when the seller's products and services are high – end routes, if the establishment of a certain brand image, then the price positioning will be adjusted.
How the product pricing in different stages? although we know the pricing formula, but the pricing ideas are different based on different stages.
①. When the seller's new products were on the shelves. when the new products were on sale, there was no review, no star ratings, no loyal fans, and the products were in a weak competitive state. in order to quickly get into the market, the sellers might set the price lower. But, can not be too low. That will make you can not earn the profits, but will let the buyer underestimate the value of the commodity, or even doubt that you are selling fake product.
②. The product develop stage. When the seller's products in sales, praise, star score indicators have improved, sales are in stable rise, but the faithful customer is still very few. At this time, the seller can raise the price a little. Or control the price at a slightly lower level than the competitor.
③. in the mature stage of the product. When your product sales have been stable, the performance indicators are very good, accumulated a lot of popularity in the market, performance has been far beyond the general seller, or has built a explosives or quasi – explosive. Then, the price comparison function of the product at this level has been weakened, more representative of the brand image and shop positioning. Then the seller can confidently adjust the price to a higher price than the market price. A loyal buyer will not leave because you raise the price.
④. during the recession stage. Moldbaby products can not keep sales hot all the time, when the product's sale reached the highest number in the market, it will slowly enter the recession. And the new products will replace it, consumer loyalty will also decline, demand will gradually weaken, sales and profits will be less than before, so this time can take some discount promotions, such as full reduction, discount shipping. Pricing tips 1, in pricing to make good use of " 9" whether in the Amazon or in the domestic e-commerce, many product prices are " 9" as the tail. Such as $ 9.99, $ 49.99, $ 99.99. On Amazon, a children's tablet sells for $99.99. You can ask, is it more convenient to sell $ 100 directly? Why should we set up $ 99.99? This is related to the psychological factors of the customer. The price of $ 99.99, will make the buyer feel the purchase that this product does not need 100 dollars. Buyers will also be more willing to buy $ 99.99 products, even if the price is just $ 0.01, compared to a tablet priced at $.
When the seller is pricing, in addition to considering the cost and profit, also have to take into account the psychological factors of the buyer. Although there are many products on the Amazon platform, their price is 9 as tail, but this is really useful.
when you price the difference commodity, the seller can display the price tag together with the same series of products, and try to introduce the higher priced goods to influence the lower price product. For a simple example, like you shop a clothing store when shopping, the store always likes to put together three different price points, namely, $ 39, $ 69, and $ 99. With the $ 99 set off, consumers will find $39 clothing is cheap to stimulate consumption. On the Amazon platform, pricing is also like this. By price the product in differentgrade will stimulate the consumption.