How to Reprice on Amazon

April 3, 2013

Marketplaces ChannelAdvisor By ChannelAdvisor

There are a lot of
factors that go into winning Amazon’s Buy Box: product quantity, fulfilment,
order defect rate, etc.  Today, however, we’re going to take a look at one
Buy Box factor specifically: pricing. Or repricing, rather.  

When selling on Amazon,
your prices need to be competitive relative to other sellers in order to
increase your chances of obtaining the Buy Box. ChannelAdvisor’s Repricer
technology for Amazon can do this automatically using rules that you define. In
September 2012 we released the new Frequency Control feature for Repricer,
which we’ll discuss in this blog post.  Frequency Control is a powerful
way to ensure that your top-selling products are given priority in the
Repricing engine.

In the summer of 2012
Amazon made significant changes regarding how integrators are allowed to get
pricing data for products on Amazon.  Part of these changes involved set
limits on how often we are able to retrieve pricing data from Amazon – roughly
30,000 items per hour per Amazon account.

Since Amazon has established
that maximum throughput rate, our Frequency Control feature provides you control
over how you allocate that throughput amongst your products listed on Amazon.
Basically you divide your catalogueueue up into up to three different tiers:
Standard, Accelerated and Maximum.  Based on the specification,
ChannelAdvisor will govern the throughput rate of the products in each tier. By
using the Frequency Control, sellers can effectively:

  1) ensure
the maximum allowed total throughput is achieved; and

  2) allow
some products to use more of the bandwidth than others

Amazon Repricer Frequency Graph

Sound a little confusing?  Let’s put this into numbers.

If you use only Standard
and Accelerated frequencies then the items in the Accelerated tier will be
repriced roughly twice as frequently as the items in the Standard tier.  

A great way to utilise
this functionality would be to reserve the Maximum and Accelerated frequency
tiers for your top-selling products, or to use those tiers for items that are
the most competitive in price and have high competition from other sellers on the
marketplace.  The beauty is that our Frequency Control feature allows you
to decide how you want to divvy up your allowance of repricings from Amazon via
simple means, after which ChannelAdvisor’s system does the granular work to
keep your items repriced based on the frequency that you have indicated.

In using Frequency Control,
it’s also important to be wary of several possible pitfalls.  The easiest
mistake to make in configuring your frequencies is defining out-of-proportion
tiers. The image above depicts the optimal balance between the frequency tiers
in which Standard contains the majority of the catalogueueue, Accelerated has a much
smaller number of products, and the Maximum tier has even fewer. 

These suggestions are
based on the ideology that if you put one item in Maximum, one item in
Accelerated, and thousands of items in Standard, the result is imbalance and
the outcome is that your overall throughput will be lower than if you had just
put everything in Standard. The lesson, then, is to try to balance your items
in roughly 2x ratios between each level, meaning that if you use all three
tiers then put roughly 15% in Maximum, 30% in Accelerated, and 55% in Standard.
Note that there is no requirement to use all three tiers,or even two.
However, if you use two tiers, I suggest, roughly, the following split
(tailored to your needs, of course):  35% in Accelerated and 65% in
Standard. Maintaining frequency tier balance will ensure that the
Frequency Control feature is working for your benefit.

There were several other
features released for our Amazon Repricer last fall in tandem with Frequency
Control–you may want to have a look at those in the  Autumn Release eBook and Repricer One-Pager.   

Blog post by Wes
Williams, ChannelAdvisor Engineering Team

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