When it comes to sell a product on the market, pricing is one of the most important feature to consider. There are many decisions to take concerning pricing in e-commerce. Just to start, few questions should be answered before deciding the final price of your items or services, should Amazon pricing be manual or automatic?
How much should the product cost? How do prices change according to different locations? How is the price compare with competition?
If you are selling on Amazon, you should be familiar with the notion of dynamicity of price. The decision about price is never final. In fact the price you establish at first may change according to variation in cost of production or currency exchange rates. Modifying your price according to external tendencies, will allow you to be more competitive and maximise profits.
You should take into consideration two features:
- Competitor prices. It’s really important to monitor rivals’ prices and adjust yours accordingly in order to stay attractive to customers.
- Your costs. Pricing strategies are based on the cost of the product, plus overheads, plus margin. But is also import to consider that the product cost is affected by currency exchange rates to be included in the markup. Amazon gives its user the chance to choose between automatic and manual pricing. Let’s look at them in further details.
Automatic Vs. Manual Pricing
With manual pricing you can create individual listings and an individual price in different currencies for different territories. The advantage is having a complete control over prices. In this way is possible to make regular adjustments to maintain the best margins for your product. But on the other hand manual pricing is time consuming since is necessary to keep track of your prices for each listing.
Alternatively you can set an automatic pricing and link home market listings to the international counterparts. If you are using inventory and listings management software, you may have access to further options on pricings that are adjusted according to foreign exchange rates. With automatic pricing, you can price your international products at a percentage above or at the same amount as your home price. Amazon then monitors daily exchange rate fluctuations and automatically adjusts your prices accordingly on target marketplaces. If you choose automatic pricing it is good practice to check the price regularly to ensure getting the best margin while remaining competitive.
To summarise, in order to make your price as more effective as possible and increase sales remember to:
- Establish your prices according to competition to remain competitive
- Tracking currency movements and adjust your rate accordingly