Once Amazon sellers have completed their product selection, it’s time to consider Amazon FBA product pricing strategies. The price will largely influence customers to make the final decision. In this article, let’s explore how Amazon products should be priced.
Amazon FBA product pricing strategy influencing factors
The market environment
The foremost factor that affects the price is the market. After selecting a product, the product is located in the market if demand exceeds supply, the seller is in an advantageous position, for the selling price has a greater autonomy; on the contrary, if the market is already very mature, filled with a large number of similar products, demand exceeds supply, the buyer is in an advantageous position, there is a greater right to choose, the market competition will allow the seller to lose some of the autonomy of the pricing.
Amazon FBA product pricing strategy
Costs
Platform costs: Amazon platform monthly rent, sales commissions, (if FBA, there will be warehousing fees, distribution costs)
Product costs: production or procurement costs, product packaging costs, etc.
Other costs: local warehousing costs (whether FBM or FBA, there will generally be stock storage in the country), transportation costs (FBM can be sent directly to the hands of the buyer; FBA needs to be shipped to overseas Amazon warehouses).
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The price of competing products
The market affects the general direction, and comes down to specific products, the selling price will receive the price of similar competitive products in the segmentation track.
Product positioning
The price of the same product may be different, different product positioning will have a different price range
In fact, there are many other factors that affect the price, here are only some examples for your reference. Different periods of the product, operating strategy, expected profits, promotion costs, promotional costs, advertising costs, etc. will be different, these will also have an impact on product pricing.
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Amazon FBA product pricing strategy
How to develop Amazon FBA product pricing strategy?
Understanding some of the factors affecting pricing, then how to determine the price based on these factors? The following are some of my personal pricing considerations when shelving new products.
- Through the research market, collect the price of competing products in the same market track, to determine the track a rough price range;
- Combined with their own product positioning, in the track price range to choose the most suitable for their own positioning of the price range;
- With reference to their own products closest to the price of competitors, do not have to copy, more reference to the price of a few competitors, you can determine an approximate price, and further narrow the pricing range;
- Combined with the various costs, as well as the expected product maturity of the profit, choose a price that they are most satisfied with.
The last step is also the most difficult step, because for new products, promotion costs are often higher, it is easy to ensure profits and lead to overpricing, so try to suggest that the pricing is a reference to their own expectations of the product stability when the state of the product, and then fine-tune according to the actual situation.
But the selling price of goods is not recommended to be frequently modified, not to mention a major change.
Amazon FBA product pricing strategy
Amazon FBA product pricing reference formula
FBA product pricing = product cost + platform commission + FBA fees + advertising costs + return costs + shipping costs + warehousing fees + expected profit + other miscellaneous expenses.
FBM Product Pricing = Product Cost + Platform Commission + FBA Fee + Advertisement Fee + Return Fee + Self-shipment Warehousing & Logistics Fee + Expected Profit + Other Miscellaneous Fees.
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