An exclusive Mercent Retail webinar previewing the Mercent Retail™ Price Optimizer and sharing Amazon repricing best practices for retailers selling on Amazon.
Over the next few minutes, we’ll offer insight into how you can Jumpstart Your Amazon Sales and Revenue Goals with Mercent Retail Marketplace Price Optimizer.
Mercent ensures the world’s leading retailers are visible, competitive, and profitable wherever consumers shop online through our full suite of product solutions and services. Our SaaS platform solution facilitates profitable growth for retailers who use our technology to measure, manage and optimize digital campaigns for maximum performance across the ecommerce landscape.
Mercent Retail’s industry-leading technology supports active integrations for retailers selling through Google, eBay, Amazon.com and all major shopping destinations.
Today, I’ll focus specifically on Mercent’s Amazon repricing solution. Let’s get started.
According to leading industry analyst firm Forrester Research, retail eCommerce sales are projected to grow from $197 billion in 2011 to $279 billion by 2015. More importantly, analyst projections indicate that traditional brick and mortar stores will defer to online sales as consumers begin to prefer the convenience of mobile and online shopping.
In fact, today eCommerce makes up 11% of total retail sales.
When we talk about eCommerce and online marketplaces, Amazon is top of mind for most merchants. With that in mind, we compared Forrester’s overall eCommerce sales growth statistics to Amazon net sales, publically available in Amazon shareholder reports.
While it’s not exactly an ‘apples to apples’ comparison, Amazon’s net sales outpaced online sales growth trends reported – clearly illustrating the compelling sales growth opportunity that Amazon presents.
In fact, Mercent saw a 44% increase in the number of clients selling on Amazon from 2010 to 2011 – and those clients Annual Net Sales jumped 51%.
So, in a nutshell: eCommerce is growing – but Amazon is growing faster.
With more retailers selling on Amazon, competition continues to heat up in every category. And, it’s important to note that 95% of transaction volume for any product on Amazon goes to the retailer who wins the buy box.
The challenge for Amazon sellers is how to win it. There are many variables, but at the end of the day, it generally comes down to total price – cost plus shipping usually wins the buy box.
So, let’s focus on strategies for selling on Amazon – and specifically, how to be more effective at winning the buy box.
Repricing is the most common strategy retailers employ – but repricing doesn’t simply mean lowering your price regardless of margin in order to beat the competition. Instead, retailers employ repricing strategies to accomplish a variety of very different goals.
Some retailers minimally decrease margin to gradually increase order velocity – the net goal is to move more product without cannibalizing your bottom line.
Others increase price to gain margin – when there’s little competition in the category or when a competitor prices below an acceptable margin.
Gaining access to buy box rotation allows a retailer to become competitive with other offers by winning 1st, 2nd or 3rd place position.
Aggressive repricing strategies allow you to sell through excess inventory and can be a good strategy for the pre- or post-holiday selling season.
Our Amazon repricing software, Mercent Retail Marketplace Price Optimizer, gives you the flexibility to set your price to accomplish these and many other goals that you may have.
Before I get into the details of our Amazon repricing solution, I want to talk about a couple of the most common assumptions and myths that retailers have around repricing – and more importantly, how Mercent’s solution challenges those misconceptions.
Many believe that only steep discounters use repricing.
Fact: The most successful Amazon sellers employ repricing strategies.
By far the most common misconception is that you will simply sell the same products but at lower margin.
This couldn’t be further from the truth – Mercent’s repricing solution goes far beyond simply lowering price – for example:
Fact: Many Mercent repricing subscribers report selling products that had never sold before.
Fact: Mercent subscribers are able to build product lists and specify rules to segment high and low margin items – doing this can actually increase overall net margins.
Fact: Mercent’s repricing solution actually prices up as well as down – so in some cases, margins actually improve.
Fact: Finally, believe it or not, selling greater quantities at a slightly lower price increases overall profits.
Let’s look at a simple repricing scenario that proves this point.
Retailer “A” and retailer “B” are selling the same product SKU.
Retailer A has marked it up 20% and is selling the product for $12.00.
Retailer B has set a repricing rule to price the item at 2% below retailer A’s price – so the product price drops to $11.80 – and wins the Buy Box. The result? A majority of the transactions go to retailer B who sells 100 items for $118 profit. Retailer A sells 10 at the slightly higher price point gaining a $20 profit.
So, how does Mercent’s solution actually work? And, what sets it apart from other competing tools? Mercent Retail Marketplace Price Optimizer delivers a best in class solution – it runs faster, smarter and with more sophisticated custom rules than any other repricing approach available.
Our solution reprices millions of SKUs per hour
It’s completely automated, rules-based & 100% flexible
And we provide transparent reporting & logging to help you understand exactly what goes into the repricing decision for each item in your catalog.
Let’s take a closer look.
Like it or not, repricing on Amazon and other ecommerce marketplaces is here to stay -- and it’s becoming the new norm. But, as we’ve seen, using price to compete doesn’t simply mean reducing your margins. Depending on the goal of your campaign, you can choose to compete on total landed cost. Depending on your inventory, you can set rules to reprice certain items based on quantity and availability.
You can reprice up or down to compete against certain sellers – including Amazon – or specify merchants who are participating in Amazon programs, such as FBA. In short, you can tailor your repricing rules to focus on your largest competitors – or ramp up discounts on certain items to compete against the entire Amazon marketplace.
No matter what your goal, Mercent’s hosted solution provides a nearly infinite assortment of repricing options and scenarios. And that’s what makes it so powerful.
We get it. Repricing is a complex and multi-dimensional process --- Mercent makes it simple. In contrast to other repricing tools, including Amazon’s own repricing engine, Mercent allows you to have independent control of goals, modifiers and floors within each custom rule.
Mercent’s solution is incredibly flexible, giving you the ability to customize metrics and variables used in rule sets and allowing you to leverage almost any metric, whether it is Cost Of Goods Sold, Standard Selling Price, a custom Floor Price, or some other internal metric to ensure you win the buy box more often.
Most importantly, our solution has the intelligence to re-price items lower than original selling price and it is smart enough to raise prices to increase your overall margin.
But repricing is only as good as the metrics and data available to help you understand which products are performing and where adjustments are necessary to increase efficiencies and gain control over sales velocity and revenue.
Mercent has built a comprehensive reporting suite into the marketplace price optimizer that provides visibility and transparency into every aspect of the products you are repricing.
Simply put – it allows you to review and take action on the progress of your overall rules, items included within specific rules and changes needed within your repricing campaigns.
Mercent currently reprices millions of product SKUs on Amazon every hour for more than 130 Mercent Retail clients. And, they are winning Amazon’s coveted buy box 60% of the time. The net return is delivering triple-digit sales growth for these merchants. For retailers competing to win, repricing with Mercent is an opportunity to grab market share.
To tie it all together, we’ve highlighted the growth opportunities available on Amazon and how this is a very effective way to capitalize on that growth and capture your share of the marketplace.
Repricing is not going anywhere--it’s becoming more integrated within the Amazon marketplace. So our suggestion is to dive in and make it part of your strategy for success on Amazon. Mercent’s repricing solution offers an easy and quick way to optimize and increase your sales on Amazon.
For a limited time, Mercent is offering qualified retailers one month free with a new one-year contract on Mercent Retail Marketplace Price Optimizer. Mercent is committed to helping retailers be more visible, competitive and profitable wherever consumers shop online.
>> Learn how to grow sales with our software for Amazon repricing