1. Not Repricing When Costs Change
Whenever any of your costs change - product, fulfillment, sales, or overhead - a repricing event must happen immediately so your margins and Buy Box ownership are protected. If you use FBA or ship from stock and buy a new batch of inventory at a different price from those of prior purchases, repricing must occur because average per unit cost has changed. If you drop ship or cross-dock and your supplier publishes new prices via their data feed, repricing must also take place because product cost has changed.
2. Ignoring Multi-Method Fulfillment Complexity
Online sellers rarely factor in all of the complexities of a multi-method order fulfillment model when repricing on Amazon. For example, the different methods of order fulfillment are: shipping from stock, FBA, drop shipping, cross-docking, and 3PL – and each method has its own unique cost structure that changes over time. Merchants who set and forget their fulfillment costs are putting their profit margins at risk.
3. Adjusting Floor and Ceiling Values Manually
Adjusting your floor and ceiling values manually is a bad idea for two reasons. First, it takes too much time – time that could and should be spent on higher value growth initiatives. Second, no one can manually adjust their floor and ceiling values as often as their costs – and competitors’ prices – change. This daily operational task can quickly turn into a multi-person full-time job as your SKU count increases.
4. Not Repricing When Costs Change
Online sellers often turn to stand-alone repricers or systems built into listing management platforms. The problem with these tools is that they are based on reacting to their competitors’ price changes – and that’s only half the answer. The point isn’t to win the sale. It’s to profitably win the sale. To do that, you need to know the competition’s price and have a firm grip on your total, real costs based on how you are fulfilling the order.
5. Making Worst-Case Scenario Estimates
Believe it or not, some merchants estimate when creating repricing rules. For example, Amazon Marketplace sellers pay different amounts to sell on Amazon depending on what categories the products they sell fall under. If they don’t know what the sales channel fee is going to be, they assume worst-case scenario instead of looking up the item to determine the correct amount. You already know your margins would shrink if the sales channel fee increased and you didn’t raise your floor. But what if the sales channel fee decreased and you didn’t lower it? You could be missing out on a lot of potential sales. Even a 2% decrease in cost might be the difference between keeping the Buy Box or losing it.
Consider leveraging a cost-based repricer that dynamically reprices when your true costs – not just your competitors’ prices – change. This will allow you to win and keep the Buy Box while protecting profit margins.