With over 300 million users, Amazon is the most popular website and app for shopping retail. How did a website that started out as an online bookstore become the most popular online retailer in the world?
Summary
• Amazon is popular not because they sell at the lowest price but because they gained a reputation for offering the best price for a product
• To offer the best price for your products, you must constantly monitor your competitor’s prices, promotions, and product availability
• Pricing decisions have to be based on your competitor’s current prices, promotions, stock trends, customer reviews, and buyer Behaviour
• Pricechecker continuously monitor your competitors and fetch all this information with 99% accuracy
• Around 87% of shoppers check prices on amazon before deciding to purchase something. This is not because Amazon sells the cheapest but because they have gained a reputation for offering the best price for a product.
• Amazon looks at multiple factors while pricing the products listed with them including.
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- Demand and supply
- Product availability
- Fulfilment process
- Ratings and reviews
- Description and keywords used by the seller
- Delivery options
What if we tell you that you can quite easily compete with Amazon for your products?
All you need to do is understand how Amazon tracks competitor prices and find out how you can do the same. We’ve got you covered for both!
How does Amazon’s price monitoring work?
Amazon constantly updates its prices based on factors such as demand, product availability, competitor pricing, customer purchase Behaviour, etc. This type of pricing strategy is known as dynamic pricing
Amazon is able to do this by constantly tracking the prices of similar products on competitor websites along with competitors for each product within its own marketplace and providing this information to its sellers. From here, the sellers have 2 options. Either to track these and update their prices manually or automate it.
In case a seller wants to automate this, Amazon offers its in-house tool Automate Pricing where the seller can set the highest and lowest price he is willing to sell for and Amazon reprises their products automatically to bring them the most sales.
This seemingly simple yet complex process is popularly known as competitive pricing.
What is competitive pricing?
Competitive pricing is where you set the price of your product based on your competitor’s price. However, the trick here is to pick the right competitor. By right competitor, we mean a competitor who not only sells the same or similar product but also sells to a similar audience, sells in a similar region, delivers under similar conditions, etc.
Basically, the aim is to factor in your profit margin but also be aware of your competitor’s price. If you can sell cheaper without taking a hit, then why not?
Can you implement competitive dynamic pricing for your products?
On average, Amazon updates the prices of its products 2.5 million times! How do they do it? Data! Data from competitors’ websites, data from their own sellers, and of course data from customer behaviour.
Can you get your hands on similar data for your retail business?
The answer is yes, and quite immediately and accurately too. Competitor price tracking tools like pricechecker continuously monitor your competitors and fetch their price information with 99% accuracy so you can keep track of it and update your prices accordingly.
How pricechecker does it better?
pricechecker goes one step further and provides stock information, price history, stock history, customer rating and reviews, and promotion data.
This means your pricing decision doesn’t have to be solely based on your competitor’s price but also based on past prices, stock trends, customer reviews, and buyer Behaviour.
For instance, if your competitor is selling at a lower price but has no stock or if they have poor reviews, then you don’t necessarily have to match their price. Another way stock status and trends can help you is in planning inventory. If your competitor has a product that you don’t, you can deep dive into what happened and plan your inventory better.
By tracking promotions being run by your competition, you will understand how your competitors are capitalising on customer Behaviour to increase sales. While any other price tracker would show you the slashed prices available on your competitor’s product page, pricechecker’s promotion tracking feature fetches you promotion details with the promo codes and the price after promotions. This lets you see the accurate price customers will be paying your competitor for a product.
If you are a retailer looking to compete with giants like Amazon, Argos, Marks & Spencers, or Walmart, then pricechecker will give you that competitive edge that you need to forecast and plan your prices, inventory, and promotion and boost revenue. To learn more about how pricechecker’s Amazon price tracking feature can help your business.
