Amazon Pricing Strategy for Multi-Channel Brands

Amazon Pricing Strategy, specifically pricing increase, is a hot topic Envision Horizons has been having with clients since last year.  Allure recently released an article titled “Beauty Products Are the Most Expensive They’ve Been Since 2016” which explains that cosmetics, hair, and fragrance products are getting more expensive as the inflation rate continues to rise. […]
Written By Laura Meyer
Published on September 21, 2022   |3 minute read

Amazon Pricing Strategy, specifically pricing increase, is a hot topic Envision Horizons has been having with clients since last year. 

Allure recently released an article titled “Beauty Products Are the Most Expensive They’ve Been Since 2016” which explains that cosmetics, hair, and fragrance products are getting more expensive as the inflation rate continues to rise.

On Amazon, pricing strategy is especially challenging because it is a platform where lower price items are rewarded within Amazon’s algorithm.

If you are a multi-channel brand and/or with large distributors changing and updating prices can be all the more challenging to have list prices change in unison. Every large retailer including Amazon wants to be selling products at the best price for their customers. Amazon even has a scraping technology that flags your listings as a “brand health” issue if another online retailer is selling that exact product at a low price.

What is the best way to update pricing when you sell on Amazon and work with other retailers and distributors?

Amazon Pricing Strategy

Plan Pricing Changes Ahead of Time

1. Plan ahead and if possible update pricing for your entire catalog rather than trying to do it one product at a time.

Consider Rising Costs

2. Look at all rising costs, not just COGS. Inflation and the changing digital landscape are impacting costs for businesses across all categories including higher salaries to be competitive for top talent, the rising cost of customer acquisition as competition increases, and even other overhead costs like fuel and utilities for facilities.

Hold Retailer Partners Accountable

3. Start negotiating early with retailer partners and have an official date that new pricing will go into effect. Hold your partners accountable for these changes and do not be shy in calling buyers if those changes aren’t pushed through on time.

Communicate Price Changes with Customers

4. Communicate price changes with your loyal customers. Similar to how subscription services give a several-month heads up to price increases, use your company’s CRM and retention marketing to let your customers know that prices will be increasing and give them a window to do last-minute bulk buys. No one likes surprises when it comes to items costing more and this also creates a sense of urgency to replenish which never hurts either.

Communicate with Authorized Resellers to Maintain Buy Box Ownership

5. When it comes to selling on Amazon make sure you are owning the buy box and if you do have authorized resellers similar to any other retail partner, make sure they are aware of the price changes.

Do Your Market Research

6. Be reasonable in your price increases and make sure to do your market research so that you aren’t too aggressive that it turns away customers. Ideally, your products and brand positioning are so amazing, that a 5%-10% increase isn’t going to turn your customers away.

Envision Horizons Services

At Envision Horizons, we believe big picture thinking is the key to driving growth on Amazon. Our team of experts combines strategy, creativity, and proprietary technology to optimize all of the moving parts needed to scale our clients’ profitability and market share. We analyze advertising, product positioning, and customer experience to build custom strategies to ensure our clients are always acquiring incremental customers. Contact Us about full service Amazon account management.

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At Envision Horizons, we believe big picture thinking is the key to driving growth on Amazon. 

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