Following last week’s blog on advantages of automated repricing, this week’s blog covers the downside of automated repricing on Amazon. Sellers must be aware of the pros and cons before making a decision on their method of repricing.
Same ASIN Problem – If two sellers are using the same ASIN to sell their product and are using the Amazon automated repricer, then the price will be set as a combination of both the rules. Here’s a direct quote from the Amazon Automate Pricing FAQ on how this works “Your price will settle to the final level dictated by your rule and the other seller’s rule. Imagine this, if you and a competing seller both have the rule “Stay below the lowest price by $0.10″, your minimum price is $20.00, and the other seller’s minimum price is $20.50, rather than trigger numerous price changes in small increments, your price will go to $20.40, and the other seller’s price will go to $20.50.” The main reason for using an automated repricer is to have your inventory priced up and down, not just down.
No Manual Input – Once you input your ‘min and max’ values and pricing rules, software takes over the rest. The opportunity of checking on competitors and conducting your own analysis goes away.
Takes time to update prices – Automated repricng on amazon does not happen actively and instantly. Sometimes it can take a while to update prices and thus, sellers can lose out on sales.
Affects profit margins – Sometimes using the repricer can lead to a race to the bottom. As such, prices might go down which could lead to a loss in profit margins. Moreover, customers might expect a low price which does not happen every time and thus consumers might not purchase products when the prices are high.
Stuggles to compete – it can be hard to compete with sellers who sell extremely cheap goods sourced from China. Amazon repricer cannot blacklist such sellers and thus other sellers have to compete with them. That’s one of the reasons why sellers prefer using external third party repricers.
Manual adjustment at ASIN level – The amazon automated repricer does not allow for you to set the ‘min and max’ prices in bulk meaning it can be time consuming if you have a large catalogue.
After evaluating the advantages last week and disadvantages of the automated repricer this week, it ultimately comes to what each individual seller wants and how an amazon seller wants to prioritize the business’s tasks. If sellers are want to save on time and focus on other areas of their business, then using an automated repricer might be the way forward. However, if sellers prefer control and want to always manually adjust prices to manually and squeeze out maximum profit, then adjusting prices manually could be the way forward. Let us know how your thoughts by commenting below.
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