It’s hard to profit from prices that constantly go down. One important way to make money online selling used books is to raise prices as often as possible.
There are so many differing opinions about pricing strategies that it’s understandable that so many book sellers are confused.
Just what is the "best" strategy? Frequent repricing? Infrequent repricing? What about automatic repricing?
It's enough to make your head spin.
I collect extensive sales data on my operation and my data shows me that I'd lose 50% of my revenue were it not for frequent repricing.
If you don't reprice for a long time (say a month or more) and you reprice your entire inventory, I'm astonished that anyone would be surprised at the spike in sales they are all but guaranteed to receive.
But here's a suggestion from someone who has invested a great deal of time and money learning how to sell used books and who has developed a system that boosts sales through repricing. First, I do use an automated repricer. It runs every hour on the hour across all marketplaces.
When it considers lowering prices I have a number of criteria programmed into it before it does so. I'm sorry, but that criteria is proprietary. However, when a price reduction is triggered it only goes one penny below the next to lowest price ABOVE the low price leader. In other words, I profit from prices moving up!
Often, I see quite a bit of distance between the lowest price and the next higher price (next to lowest).
By matching the lowest price you often cause that seller to respond by lowering his or her price a penny to a nickel lower to beat you. Then you match them again, blah, blah, blah. You end up in a race to the bottom. I’m going to suggest that you think about implementing alternative forms of pricing.
Technique #1: For example, try this instead, go one penny below the next higher price.
That technique alone raised my average sale more than $2 without changing my scouting strategy. Because I list a significant number of books daily and as such have high daily sales volume, I saw no impact to my sales due to not being the low price leader on every item. However, I did see a bump in revenue.
Technique #2: Especially try this, reprice EVERY DAY with NO RESTRICTION on how high or low your price moves. Delete all the price decreases and ONLY upload the price increases.
The above online bookselling technique brings me a steady flow of $50, $75, and $100+ orders. Sometimes, items I originally listed for $5 end up selling for $100 or more. Why? Because I let price increases jump as high as the market will bear, but I'm very stingy with price decreases. Again, that’s profit from prices going UP and not DOWN.
Technique #3: Set a floor. I recently posted that I set a floor of $3. That's no longer true. I've raised my floor to $3.51 (that makes for an nice round $7.50 FBA sale).
I'm amazed at how many penny books I sell for $3.51 -- really! I saw NO SIGNIFICANT DECREASE in sales volume when I went from a $3 to a $3.51 floor. But my revenue went up a few bucks a day. Try it.
In summary, you should tweak your Amazon pricing strategies to minimize price decreases and maximize price increases. Set a floor and play with it. Your revenue will go up. How much you tweak and how much additional revenue you generate will depend on the type of inventory you carry and the relative demand there is for that inventory.
I hope this article has helped to give you a better understanding bookselling pricing strategies. Good hunting!
Joe Waynick is author of several eCommerce books covering the bookselling and publishing industry. You can follow him on Twitter @JoeWaynick.
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Pricing Technique #1 Question Not rated yet
Original Comment: April 16, 2014 Joe, please let me know if repricing at "one penny below the next higher price" takes into consideration the …