In the present age, selling in eCommerce is so easy that literally, one can start a business in less than 5min. There are hundreds of marketplace out there in the sea of the internet. But Amazon and eBay are giants. More than 50% of the eCommerce business happens in just 2 to 3 market places. Since any business is possible to start in a few minutes, the question that hunts seller is, How to Make the Profit? How to take Maximum Profit? How to Sell Faster? These are the questions commonly asked by the Amazon sellers.
Nowadays, more sophisticated tools like algorithmic repricing are deployed to win the buy box. Winning the buy box means more sales, so more profit. Amazon’s 80% sale is channelled via buy box. Also, price is the primary driving factor which helps in winning Buy Box. So there is high competition to win the Boy Box. Traditionally, Whoever sells for the lowest price or nearly low price wins the buy box. So selling for low prices means, sellers have small profits. However, one has to sell in huge volume to increase the revenue. If anything goes wrong, sellers will hit badly.
Selling at Low Prices
Amazon has an ocean of prime members who will be looking for deals and offers. If any small calculation goes wrong in the offer price, hungry sharks will instantly buy and sellers will lose money. Sellers might not notice the mistake of calculation of price. It may take weeks, or months to realise the calculation. The chances of price calculation go wrong is very less for repricer, but not impossible. So don’t rush to win buy box or sale at low prices. Use analytics, data and to understand the profit and loss.
Leverage Data
Operate based on Data analytics, and other key components like market demand, inventory is very important. One must analysis the trend in the market, which may spike demand and hence price. Bidding lower price will only decrease revenue and one has to sell in huge volumes. Therefore, bidding lower prices is not the right strategy. Understanding the demand in the market and leverage that to maximize profit.
Apart from demand and supply, other factors like shipping cost, currency conversion rate, storage fees, and marketing cost need to understand. Software like RepricerExpress will help in dealing with multiple. Explore the tools that can save time, gives more exposure to untapped factors and optimise the price. eCommerce is a rapidly changing space. Handling the data especially for large volume Amazon sellers, multiple category and marketplace are challenging. Advance Machine learning tools is a great help to large volume sellers. Also, reviewing the sales data every day is a must. Cost breakdown report is one of the significant reports which should be reviewed every day, for each order. This is all possible with the use of tools and software. Reviewing them to cut unnecessary cost and maximize the profit.
A/B Tests
A/B Test allows you to experiment and make a better decision. Profit is one thing, and experimenting for discovery is another. Amazon sellers must continuously evaluate and test in real condition for a better strategy. Make changes in a few parameters like timing, price, and test out what works for you.
Finally, price is an important component of the eCommerce, that customers look into and make a decision. To maximize profits, sellers should focus on multiple factors rather than relying only on low price. Having tools to analyse demand, inventory, trend and customer needs help to understand the price.
