How To Decide What to Price Your Amazon Product
Setting the price on your product is a crucial factor to know. If you wan to sell Amazon products and succeed at it.
The price of a Amazon product is tied to your sales and profit. Charge too high and lose sales. Charge too low and lose profit. Not only this, product prices often change under Amazon’s pricing model
In this article, Nine University
discloses an efficient pricing strategy. Which will help you have a better understanding of how to sell on amazon.
Amazon Product Pricing Policy
According to Amazon’s Pricing Policy, sellers are allowed to set the price of their products. However, to ensure that prices are fair to customers, Amazon regularly monitors the prices.
Amazon has the liberty to remove product offers, suspend the shipping option. As well as even remove selling privileges.
Here are some practices about how to sell things on amazon. As well as set a fair price without being penalized:
Avoid setting misleading prices to products or services.
1. Avoid setting a significantly higher price than the current prices of similar products in the market.
2. Don't sell single units. Single units are more expensive to buy than when buying them together.
3. Avoid setting excessive shipping fees.
Creating a Pricing Strategy
To create an effective pricing strategy, we recommend focusing on three important factors. Costs, customers, and competition.
The most essential step is to estimate all the costs your product entails.
Consider the following costs before setting the price:
Manufacturing. Includes all the costs of raw materials and workforce . Either human labor or machine production used to elaborate a product.
Storage. Monthly inventory storage fees charged by Amazon. For products that don’t require special handling, Amazon charges between $0.48 to $0.75 per cubic foot of storage.
Marketing. Include marketing campaigns and techniques to promote your product. Marketing costs include, paying for a website, content creation, social media accounts, or ads.
Shipping. The costs of shipping the products to your address. As well as the costs to ship the products to Amazon’s warehouse.
Taxes. Including state and local taxes assigned to the sales of your products.
If you prefer not to do the estimation on your own, you can easily find a calculator online to help you estimate these costs.
To price your products, you need to establish how you want your brand to be perceived. As well as define the type of customers your brand aims to have.
Consider the following brand positioning types:
Luxury or high-quality brand. Customers see the value of the brand in the quality of the products. Customers are more inclined to pay higher prices.
Affordable brand. The value of the brand is offering lower-priced options to customers. But without compromising the quality of the product. Customers drawn to these brands are often bargain hunters or money-savvy people.
One of the easiest ways to figure out a pricing strategy is to look into how your competition is pricing their products.
We recommend the following tips when analyzing your competitors’ strategy:
1. Look at the prices of your competitors that are in the top 10 of Amazon’s bestseller category.
2. Analyze the customer reviews of your competitors. This will provide insight into whether clients are content with the price of the product.
At Nine University
, find free advice on how to set a pricing strategy and more tips on how to become an Amazon bestseller. Let us help you!