Do you already understand the need for a proper repricing system on Amazon and the impact dynamic pricing could have on marketplace sales? Great! Now check out what features a good dynamic pricing tool should have and how to choose a repricer. In a nutshell, a good repricer handles as many listings as quickly as possible on as many marketplaces as possible. Find out what this means.
From this article you can learn the following:
- what is a good repricer,
- what features to consider when choosing a repricer,
- what extra features should a repricer have for you to manage sales more effectively,
- what data a good repricer can analyse,
- how do you use sales management systems to win Buy Box on marketplaces.
What is dynamic pricing
Constant scanning of competitors’ prices and automatically adjusting your prices in response to market changes to get additional profit. This is what dynamic pricing (also referred to as automatic repricing) is all about. Marketplaces are flooded with different offers from competitors. No wonder modifying prices manually is virtually impossible.
Imagine you try adjusting prices several times a day for a few hundred products. Surely, it is better to rely on the automatic price adjustment process. It looks like this:
- You set prices and margin thresholds for your product.
- A change in competitor prices occurs, after which your offer is no longer the most competitively priced one.
- The system recognises the change in competitor prices.
- Then, it calculates in line with previously set margin thresholds, whether a price lower than your competitor’s offer could be set while maintaining an appropriate margin level.
- If possible, the dynamic pricing tool sets a new price.
So you can see that repricing on Amazon, or any other marketplace, without the right tool, is madness. It’s time to find out what requirements a repricer needs to meet to help boosting sales on marketplaces.
Here are 4 essential features for the seamless implementation of an e-commerce dynamic pricing strategy.
1. Number of supported platforms – how many marketplaces the repricer will work on
The first one might sound obvious but making sure a repricer would handle product price changes on the marketplace you sell on is crucial. Some systems available are specifically designed to manage sales and prices on different marketplaces: from built-in tools offered by the platform to external solutions dedicated to specific marketplaces. In the first group, for example, you will find Amazon’s built-in repricer, and in the second the Nethansa Platform.
Also, remember that built-in solutions are rarely the best tool for a seller. The reason is simple – they have been designed by the owners of a specific shopping platform and will serve them in the first place. Furthermore, by revealing all the details of your pricing strategy to the marketplaces, you are risking a lot. The information you provide may be used to increase sales on offers in the vendor model.
As for the cost perspective – it seems that the more markets and marketplaces a tool can support, the better. Surely, no one likes to use several systems designed for the same thing. Ideally, the system you are considering should be able to handle all the marketplaces and markets you sell on.
2. Number of offers – how many products are available in the dynamic pricing model
The available dynamic pricing solutions are most often offered in several different packages. One important difference between them is the number of offers active in dynamic pricing. The importance of this aspect for the selection of a particular tool will increase as the number of products available in a particular retailer’s product range increases.
For example, a retailer who has 5,000 different SKUs on offer will pay more attention to this aspect than a retailer whose product range is a few dozen. If you select a repricer which do not automatically adjust prices for your entire product portfolio, make sure that you enable this feature for your most important offers first.
3. Price change speed – how quickly does the repricer react to changes in product prices
A competitor’s price has changed? It is important that the chosen system is able to act quickly in adjusting product prices if price ranges allow. One indicator that is used to measure the effectiveness of a price management system is EPM. In addition, it is worth considering how often the system ‘scans’ the competition. The higher the number of queries sent to check competitors’ prices, the faster the repricer will identify them.
💡 Hint
Events per Minute (EPM) is an indicator of how many events per minute the repricing system is able to handle. The higher the EPM value, the faster it will handle the necessary price changes.
Monitoring competitors‘ actions and automatically adjusting product prices are the cornerstones of repricers. These indicators should therefore be among the most important when analysing the available solutions.
4 Additional functions – more than price management
In addition to the basic indicators, it is worth considering other functions that facilitate sales management. For example, this could be managing stock levels, making bulk actions, identifying exceptions, setting detailed price components, integrating with other systems, etc.
Analyses and predictions
There is no effective pricing strategy without sales analysis. Modern repricing software offers extensive analysis modules to help you assess the sales potential of your products, as well as your need to stock up for the upcoming weeks. With the right system, you will learn which markets you sell best and which products are most profitable. Moreover, based on historical data, you will precisely identify the impact of seasonality and better plan your pricing strategy for the busiest times of the year.
Pricing policies
Repricing is not just about simply setting a new price. Modern repricing tools also allow you to use so-called pricing policies. This is a pricing strategy with predefined objectives. For example, the ‘buy box policy’ in the Nethansa Platform aims to occupy a featured offer field and maximise the margin on a given product without losing the buy box.
Automatic price adjustment impact on winning the buy box
This is worth paying attention to, as price is one of the most important elements in deciding whether to buy. Especially, on marketplaces, where the number of competitive offers is huge. Also, shopping platforms heavily promote the cheapest offers by placing them in a special buy box.
💡 Hint
On Amazon, in addition to price, account health metrics are of great importance to the quality of a listing. By keeping them at the right level, you will more easily find yourself in the Featured Offer (formerly Buy Box). You can check these metrics at Amazon Seller Central, and you can learn how to audit your seller account from our blog post.
How to choose repricer – summary
Automated repricing is a necessity in an age of huge competition in marketplaces. When looking for an effective sales management and automatic price adjustment tool, make sure it meets the basic requirements:
- supports the marketplace you sell on,
- allows you to dynamically manage prices for the entire portfolio of products you offer,
- allows you to handle all your competitors’ price changes instantly.
Once you have gone through this three-step checklist, have a look at the additional features that are most important to you and that will make it easier to manage sales in the area you need the most. It seems that free trial periods and trial versions of systems are standard in SaaS solutions – don’t be afraid to use them.
