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April 7, 2020

3 Reasons Why Ecommerce Sellers Should Be Using a Repricer

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This blog post was originally published by Deliverr, which is now Flexport. The content has been adjusted to fit the Flexport brand voice and tone, but all other information remains unchanged. With the merging of Deliverr’s services (DTC fulfillment, B2B distribution, and Last Mile delivery) into Flexport’s existing international freight and technology services, we’re now able to provide merchants with true end-to-end logistics solutions spanning from the factory floor to the customer’s door.

An eCommerce repricer can ensure that you’re competitive, profitable, and not breaching any marketplace policies. However, they’ve earned somewhat of a negative association with price wars and a rapid race to business failure.

This week, we’re combating the myths with three reasons why you and your eCommerce business need a repricer in your lives.

What Is a Repricer?

If you’re never used an eCommerce repricer before, let’s quickly cover the basics of what a repricer is and what it can do.

Repricing apps and software connect with your online sales channels to automatically reprice a product on your behalf, in response to a competitor changing their product price.

It does this following different rules (which you can set), such as:

  • Beat the competition by 1%
  • Match the lowest price
  • Beat 2-day delivery sellers by $0.00
  • Compete only for the buy box
  • Match the lowest price of sellers with 4+ stars

Depending on the repricing tool being used, this can occur in real-time, take place at certain times throughout the day, or be conducted manually.

Why Use an Ecommerce Repricer?

Aside from not having to manually reprice items yourself (hello 4-day work week), there are three significant reasons why you should be using a repricer for your eCommerce store and marketplaces.

1. Avoiding Being Delisted

The top online marketplaces are in a colossal battle for online shoppers; a battle that they believe can be won by fast shipping programs, outstanding customer service, and (you guessed it) low prices.

Accordingly, online marketplaces require their sellers to adopt competitive pricing strategies or face the consequences for failing to do so.

  • Under the Amazon marketplace fair pricing policy, sellers setting a price on a product “that is significantly higher than recent prices on or off Amazon” risk delisting or Amazon suspension.
  • Under Walmart’s Price Leadership Rule, if a customer “would save drastically by purchasing the item on a competing website,” their item is automatically unpublished from the marketplace.
  • Although eBay doesn’t have a fair pricing policy, eBay is known for its low prices, and those failing to offer competitive pricing are automatically uneligible for eBay’s Daily Deals and Best Price Guarantee.

However, with Amazon changing product prices 2.5 million times a day, you can easily breach these pricing rules without intention or knowing about it - facing a lengthy process to re-list items or appeal a suspension.

An eCommerce repricer avoids this scenario by continually monitoring prices across the Internet and updating them to ensure that you never fall foul of marketplace fair price policies.

Tip: Made a mistake that got you delisted? Learn how to appeal an Amazon suspension.

2. Price Competitiveness

Price competitiveness is probably the first thing you thought of when reading this article title, and with good reason. eCommerce is a hugely competitive industry, with an estimated 2,500,000 active sellers on Amazon, 23,000 on Walmart, and 25,000,000 on eBay.

Price competitiveness helps you to stand out from this very busy crowd.

When multiple merchants are selling the same items, customers need something to differentiate between them and filter their results on. Since costs are one of the highest reasons for cart abandonment, price is an effective way to achieve this - especially when fast shipping is becoming less of a differentiator and more of an expectation.

Buy box
Winning the buy box on Amazon, Walmart, and eBay comes down to several factors, one being price. Products that are competitively priced stand more chance of winning this premium retail space - leading to increased visibility and conversions.

Customer preference
Shoppers like getting more bang for their buck. By offering quality products at a competitive price, you automatically become more attractive to consumers. This can bring additional benefits such as larger basket size, repeat visits, and positive customer reviews.

Ecommerce psychology is a meaty topic, especially when it comes to pricing. In short, using the right figures and pricing difference from your competitors can convert the subconscious mind before the logical part of the brain casts doubt and causes cart abandonment.

A repricer enables you to compete on price strategically, allowing you to set rules that play to these advantages and return the maximum amount of profit possible. In addition, with the right repricer tool, you gain insight into who your competitors are. This allows you to check for other areas of competitiveness, such as customer feedback, shipping speeds, and stock levels.

3. Healthy Margins

Net margins are crucial to eCommerce business success. There’s little point running a repricing strategy where you’re spending more money than you can make, leading only to business failure. This is where the main benefit of a repricer comes in.

With the right repricing tool and rules, you can ensure that your products are never priced low enough to incur a loss or miss out on larger margin opportunities.

For example, you can set rules that guarantee:

  • Your products are never priced low enough to incur a loss or fall drastically below that of your competitors’.
  • Your prices are never compared with sellers who have poor ratings, slow shipping speeds, or low stock levels.
  • Your prices go up as well as down, to ensure that you make the maximum margin possible in the current market and don’t get tricked into poor margins.

In addition, a repricer works automatically, 24/7. This means that you never have to miss out on healthy profit margins because you were away on vacation, sleeping, or forgot to check.

This time saved can be invested in other methods for increasing your profit margins, such as reducing your fulfillment costs, product sourcing, and reducing your seller fees.

Repricing for the Win

A repricer doesn’t have to lead to price wars, profit losses, and business failure. With the right tool, you can implement an intelligent repricing strategy that increases sales, protects your listings, and even increases your profits.

If you’re convinced about the benefits of an eCommerce repricer for your business, check out our blog post "six things to consider when choosing Amazon repricer software."

The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.

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