The level of the product price is an important factor that determines whether the consumer purchases product or not. If the price is too high, the conversion rate will be low, the product can not be sold out; However, if the price is too low, the seller's profit margin is little, and some consumers may doubt the product quality, reasonable price is an important part of Amazon's operations, then how to price new products?
First, the factors that affect product prices
① Product cost
Here，the cost of the product mainly refers to the cost of buying products or manufacturing costs.
② Shipping costs
Regardless of whether you choose to ship by FBA or not, you need to calculate the shipping cost to the cost of the product. The cost of the FBA includes several aspects: storage costs, order processing fees, sorting and packaging costs, weighing processing fees, other paid services.
Execution fee = order processing fee + sorting and packing fee + weighing processing fee
Storage costs, including normal storage costs and long-term storage costs. the normal storage costs are almost negligible, but long-term storage costs will become higher and higher with the time your product stay in FBA inventory goes longer and longer, the unit costs will be more expensive.
3. Platform commission
Amazon sellers sell different categories of products need to pay a different commission.
4. profit margins
All the sellers are most concerned about the profit of the product, so when select your product, we must consider whether the product itself will have the market, and how much profit will be.
5. Other costs
Including product marketing costs, labor costs, as well as the cost of product promotions.
Product pricing formula
When the seller is pricing a new product, he will take the profit, product cost and other factors into account, you can refer to the following formula to price your new product:
Commission is usually in the range of 8% -15%, depending on the specific product categories.
Second, pricing errors
When the new product just released, if the price setting is the same as most sellers, it has no advantage and loses a lot of business opportunities, because consumers are more willing to go to those mature sellers to buy. So the sellers need to do is to price product after evaluating the market, and some sellers in order to test the impact of price on sales, frequently adjust price, which is detrimental to product development.
If you want to improve the ranking by adjusting the price, you need 1-2 weeks'stable period, then do a further adjustments through the observation, because the customers who have bought the products will feel terrible when they see the price adjustment.
Some sellers in order to quickly seize the market, set a very low price, this is not work, especially for applying for the lighting deals and other activities. What's more, low price product can't make much profit even you sell a lot.
Over high pricing is also a problem.Think if your product is a new product, there is no review and no market feedback, but its price is very high, it doomed to has no sales.
Third, pricing strategy
① last number pricing
Psychologists research shows that the nuances of the price last number can directly affect the consumer's buying behavior, and last number pricing gives you a precise positioning, trustworthy feeling.
You can find a lot of products on the Amazon platform pricing with the last number "8" or "9" , such as $ 9.88, $ 99.99 and so on. Although the $ 100 and $ 99 is actually have no much difference, but the psychological feeling are very different , The same product, buyers will be more inclined to the latter.
② different price
For different colors and models of the same product, the seller can create a listing variant. According to the different sales of the product, the price increases one by one, for example, $ 29, $ 39 and $ 49. When the consumer sees these prices, compared with the highest price of $ 49, They will be more inclined to buy the latter two price products, so as to achieve the purpose of sales.
The above product pricing strategy for Amazon only for your reference, because in actual operation, the seller also needs to adjust price according to market conditions, competitor product prices, different cycles of the product, in order to promote the overall product sales.