Repricing Without Racing to the Bottom
A repricer will win the buy box and it will also find the price at which every sale loses money. The rules you set are the whole difference.
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A repricer changes your price automatically against what other offers are doing. On a competitive catalogue it is close to necessary, because the alternative is a person watching a page all day.
It is also a machine that does exactly what you tell it, and most of the damage repricers cause is the rules rather than the tool.
What repricing is actually for
Winning the buy box on Amazon, or the equivalent decision on Walmart, and staying competitive on eBay where the shopper compares listings rather than sellers.
It is not for maximising margin on a product nobody else sells. If you are the only offer, a repricer has nothing to react to and should be turned off for that line.
The floor is the whole strategy
Your floor is the lowest price at which you still want the sale, and working it out properly is the piece most sellers skip. It is not cost plus a margin: it is landed cost, referral fee, fulfilment fee, storage for the time it actually sits, returns at the category's real rate, and advertising at what your clicks actually cost.
A floor built on cost plus twenty percent, on a product with a twelve percent return rate in an expensive category, is a floor below break-even. The repricer will find it, obediently, and then sit there.
Repricing up
The half everyone forgets. When the competing offer goes out of stock or a competitor withdraws, a good rule raises your price rather than leaving it where the race left it.
That is where most of the profit in repricing lives. Sellers who only ever match downward capture none of it and then conclude repricing does not pay.
Rules worth having
Compete on landed price. Item plus delivery, because that is what the marketplace compares and what the shopper pays.
Do not chase every offer. Matching a seller with poor metrics or no stock is matching a price that is not really available.
Respect minimum advertised price. If you resell brands with MAP terms, the floor is contractual as well as commercial, and breaching it costs the supply rather than the sale.
Slow down at the bottom. A rule that moves in smaller steps as it approaches the floor buys time for a human to notice what is happening.
Watch parity across channels. Amazon compares your price with the rest of the web, so a deep discount on your own store can suppress the buy box on the marketplace, which is the opposite of what the discount was for.
Velocity, and what a price change actually buys
A price cut buys units, and units buy rank. That is the honest argument for pricing below your target for a while: sales history is an input to where you appear, so a period of higher velocity is an investment rather than a loss, provided somebody decided it was one.
The failure is doing it by accident. A repricer racing to the floor produces exactly the same low price, with none of the intent and no plan for coming back up, and the seller finds out from the margin report a month later.
Which is why a floor and a ceiling are both worth setting. The ceiling stops a rule from pricing you out of the comparison when competition briefly disappears, and it is the guard that stops an automated system doing something no person would have chosen.
What to check weekly
How many lines are sitting at their floor, which is the health check. A handful is competition; most of the catalogue is a floor that is wrong or a category you should not be in.
And whether buy box share moved with the price changes. If price fell and share did not, price was not the problem, and the repricer has been spending margin on the wrong diagnosis.
What we do with this
Floors get rebuilt from the real numbers as part of running an Amazon account, because a repricer inherits whatever assumptions were true when somebody set it up, and fees, return rates and click costs all move. The numbers a floor should be built from in the first place are in what it costs to sell on Amazon.
Pricing across channels is the other half, and it is one of the reasons a store and a marketplace need to be planned together rather than run by different people.
If most of your catalogue is sitting at its floor, the floor is the thing to look at first.
Related reading: Walmart Pricing Strategy: Why Your Listing Went Unpublished.
Related reading: Amazon Paid Search: How Pay Per Click Search Marketing Works on Amazon.
Frequently asked questions
The questions that come up most often on this subject.
Changing your price automatically in response to competing offers, to win or keep the buy box on Amazon or the equivalent decision elsewhere. It is a rules engine, and the rules rather than the tool decide whether it makes money.
Landed cost plus every fee the sale actually incurs: referral, fulfilment, storage for the time it really sits, returns at the category's real rate, and advertising at what your clicks cost. Cost plus a round margin is how floors end up below break-even.
It will if every seller's rule is to undercut with no floor. Yours cannot control theirs, so the protection is a floor you will not cross and the willingness to lose the buy box below it.
Yes, and this is where most of the profit is. When a competing offer goes out of stock or withdraws, a rule that raises your price captures the margin; matching only downward leaves it on the table permanently.
No. An offer from a seller with poor metrics or no real stock is a price that is not genuinely available, and matching it gives away margin against a competitor who cannot deliver anyway.
Minimum advertised price, a term some brands set for their resellers. Where it applies your floor is contractual as well as commercial, and breaching it risks the supply rather than the sale, which is a much more expensive outcome.
Yes. Amazon compares your price against the rest of the web, so a deep discount on your own store can suppress the buy box on the marketplace. Price across channels rather than per channel.
Buy box share should move with the price changes. If price fell and share did not, price was never the problem, and the repricer is spending margin on the wrong diagnosis. Check how many lines sit at their floor: a handful is competition, most of the catalogue is a mistake.
No. A product nobody else offers has nothing to react to, and a repricer on it can only lose you margin. Turn it off for exclusive lines and run it where there is genuine competition.
On a small catalogue with few competitors, yes, and it is cheaper. It stops being possible somewhere around the point where you cannot check every competitive line daily, which arrives sooner than most sellers expect.
