Pricing strategy

I’ve seen the number 1 product in my category take a very aggressive pricing strategy - effectively underpricing the market significantly and achieving higher volume than the next several sellers combined. For anyone who has gotten to #1 or close to it:

  1. What is your pricing strategy and how does it vary over time?

  2. What is your PPC strategy (i.e., do you temper PPC spend and let the price alone boost the rankings?

  3. How long do you stay with the below breakeven price before shifting the price towards profitability ?

  4. Is there a signal that tells you when to start raising prices?

  5. What types of products do you think are more conducive to this strategy (not necessarily specific products, just the characteristics)?

Lowest price wins.

Stay the lowest or you will lose the spot.

Problem is if amazon is selling a competitive product they will designate your product as prohibited. You will be shut down and they will get #1 back and without your price pressure the consumer will be paying much more for the item(s).

Products that are consumed by un-educated, low income, price point shoppers. That is the largest demographic on the site. Larger the group better are your chances of selling in volume. Along with that group you will have extreme baggage to deal with.

You will also find well-educated and online savy buyers that can find and buy real value items, just depends on what you have to offer and the price.

  1. What is your pricing strategy, and how does it vary over time?

My pricing strategy is dynamic and data-driven, taking into account market conditions, competition, and customer demand. I continually monitor and adjust prices to optimize profitability and sales volume.

  1. What is your PPC strategy? Do you temper PPC spend and let the price alone boost the rankings?

I balance PPC spend with price adjustments, leveraging both tactics to maximize visibility and sales. I don’t solely rely on price alone to boost rankings, as this can be unsustainable.

  1. How long do you stay with a below-breakeven price before shifting towards profitability?

I continuously monitor sales velocity, customer feedback, and profit margins. When the data indicates a sustainable sales volume, I gradually shift prices towards profitability while maintaining competitiveness.

  1. Is there a signal that tells you when to start raising prices?

I watch for signs of stabilized sales volume, improved customer feedback, and changes in market conditions, like increased demand or reduced competition. These indicators suggest it’s time to adjust prices upward.

  1. What types of products are more conducive to this strategy (not specific products, just characteristics)?

Products with high demand, low competition, and minimal product differentiation are more suitable for aggressive pricing strategies. Additionally, products with low production costs or high profit margins allow for sustained low prices without significant losses.

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Hey, big thanks to both of you for sharing your tips! Really appreciate it!

Any examples?

Every page you see on amazon is loaded with low grade products. Very easy to spot, the sellers from China are very astute at understanding the amazon customer base. That is why they sell junk on amazon and ebay. I buy quality stuff made in China and it is extremely good stuff, you just don’t see that on the online marketplaces because junk sells, junk is cheap, junk is what the core demographic is after.

Once you get a grip on that you will do fine.