Price is one of the key aspects of a product and could be what makes a customer choose yours over a competitor’s.
As pricing isn’t an exact science, we need to be smart about it.
Many Amazon sellers get confused when deciding how much to sell their product for. If you charge too much, no one will buy it. If you charge too little, you won’t make any money.
Of course, there’s much more to it than that, so here are 3 things to consider when pricing your Amazon product.
- Your desired margin
Hopefully, you’ve done all the research, crunched the numbers and made sure your product is going to be profitable before you’ve launched it.
Yes, before you decide to go ahead and sell the product, you need to tally up the purchasing/manufacturing costs, shipping and of course, the Amazon fulfilment fees.
The margin (price minus total cost) differs depending on the product and niche, so it’s difficult to give you a single number to aim for. Based on my experience and other sellers whom I work with, 30% is a reasonable margin.
Obviously, you’d like to earn more and at times you’ll be earning less, but 30% is a good rule of thumb.
- Your reviews
You’re faced with two similar products with the same price, but one has 200 positive reviews and the other 3, which would you choose?
You can’t compete solely on price, so you need to have a few positive reviews to sway customers to buy your item.
When you first launch, your first goal is to get reviews and build up your sales data and one way to do that is to drop your price.
Many sellers barely break even for the first month or two of their product launch just to get those all-important reviews. Once you’ve got 15-20, it’d be a good idea to put your prices back up.
- What makes your product different
In competitive markets, it’s extremely difficult to compete on price alone. So, to justify your price you need to find out what differentiates your product from the rest of the pack.
Does it have a feature/benefit the others don’t?
Is it more powerful, brighter, bigger, smaller etc.?
Can you bundle your product with an accessory or sell as a two-pack?
If the customer thinks your product gives them more value than the others, then you can charge more for it.
Pricing is a deep subject that attracts several different schools of thought. I hope, if anything, I’ve set your minds thinking about your prices and how to set them.
If you’d like to learn more about pricing or anything else about Amazon selling, please check out my other articles or get in touch!
Good luck everyone!