Our friends at Marketplace Ignition (http://marketplaceignition.com/) brought this to our attention (thanks, Eric). In an effort to keep our clients in the loop and at the forefront of important industry movements like this, here’s our take…
On August 23rd Amazon released what seems to be a repricing tool within the Seller Central UI.
At present, documentation on Amazon’s new tool is limited, outlining one feature that offers the ability to select a portion of a retailer’s catalog or a singular SKU, and match that to the lowest price on the live listing (ASIN).
I believe Amazon is working through details, but at present, there are not a lot of details on how the logic works. From what I can tell, Amazon’s Low Price Matcher does not identify a retailer’s COGS (Cost of Goods Sold), or other margin data that is applied within other re-pricing tools, such as the Mercent Retail™ Price Optimization Engine.
This is critically important data retailers need to pay attention to. As far as I can assess, (without additional information from Amazon), there is no ability to set target gross margins or to select retailers a merchant may want to compete against. Additionally, retailers cannot take additional factors, like seller rating or floor price into account in their price matching strategy.
We are supportive of Amazon, but would like to point out potential challenges that could arise from using this price matching tool:
- If you use this to compete against FBA (Fulfillment by Amazon) merchants and/or Amazon, probability stands against winning the Buy Box. This is because Amazon fulfillment gives those merchants a higher than average relevancy score, which in turn boosts their chance in winning the Buy Box.
- As there is always the chance of not matching to the correct ASIN (EX – A single product matching to a multi-pack product listing), you may be put into a situation where another merchant has incorrectly matched to an ASIN you are listing on. Due to incorrect data and price, you may therefore be dropping price to levels that cannot be supported. You will not be able to set other variables within the logic behind this tool; therefore you will be at the will of the lowest priced merchant on the listing.
Based on this week’s announcement, my initial thoughts and recommendations are as follows:
- We recommend retailers use a more sophisticated competitive pricing tool that has deep logic and proven performance like the Mercent repricing tool.
- If you do use this tool, and if you are competing against FBA merchants or Amazon, be cautious of the number of items you are repricing because you may be fighting an unwinnable battle.
- Always ensure you matching to the correct ASIN, and your completion is properly displaying the appropriate data for that ASIN. This will ensure you are not lowering your price to levels you cannot support
It is my opinion that as time goes on Amazon will bake new features into their tool, such as true re-pricing and the capacity to set a relative floor variable.
Here is the high level overview of the program that Amazon released in Seller Central.
- The Match Lowest Price feature lets you quickly and easily matches the current lowest prices for items with at least one other listing.
- In Manage Inventory, click the triangle on the left of the top row and choose “Not low price.” This will select all of the listings on the page for which the value in the “Your Price” column is higher than the figure in “Low Price” column. (The “Not low price” option will not appear if all your listings on the page already have the lowest price.)
- Next, click the Actions button and select “Match low price.” This will change the selected listings’ values in the “Your Price” column to match the values in the “Low Price” column.
Matt Fisher
Online Marketing Manager
Mercent Corporation | www.mercent.com
