Maybe… but NOT right now.
With all of the concern surrounding price gouging (unethically inflated pricing), you want to make sure to keep your account healthy and stay off the radar.
Take a holistic approach to your account. Often, we see Sellers focusing on one particular strategy or going where the low hanging fruit is. You might think that the market will support price increases, but generally speaking, you’re better off to avoid this temptation and distraction right now. Think about your account health above everything else. Making extra dollars in the short term isn’t worth risking your account.
Dynamic and algorithmic repricing have been notable buzzwords for a long while in the repricing and pricing policy world. During “normal” times, it can make sense to reprice multiple ways using a variety of strategies. Different products and categories often have very specific approaches you’d want to take into account. Right now, however, is not the time to experiment. You want to avoid running afoul of Amazon Marketplace’s Fair Pricing Policy found here: https://sellercentral.amazon.com/gp/help/G5TUVJKZHUVMN77V
You should definitely refamiliarize yourself with this policy. You might want to look up Amazon’s policy related to Pricing and Multi-Pack Abuse if you sell bundles or multi-packs. In a nutshell, you want to ensure the items in a group are not priced higher per unit than they would be if purchased separately.
Here’s What You Can Do If You Want To Raise Your Prices:
If you are selling your own products, you’ll already have the price history over time. If you are selling other brands, you might want to refer to price tracking charts such as Keepa, CamelCamelCamel, Helium10 and others which will reveal current and historical pricing trends. Software tools like Jungle Scout, Viral-Launch, Helium10 and others are valuable for on-going monitoring.
As for repricers, there are many to choose from. Some popular repricers are Informed.co, Feedvisor, SellerSnap and BQOOL. The key to keep in mind, is that especially for any medical supplies, items for use in emergencies, items with trigger keywords (ie. mask, sanitizer, etc.) you want constraints in place to ensure your prices don’t increase too much or too quickly.
Regular monitoring of your pricing and evaluation of your pricing strategies is really important right now. If you need any help, the Prime Guidance team is happy to review what you are doing and provide support or advice.
Update By Amazon on Price Gouging
“As you know, Amazon’s Marketplace Fair Pricing Policy protects our customers from unfair, excessive, and misleading prices. Our price gouging prevention systems attempt to account for variations in local laws while also providing customers a consistent experience across our stores. We also take increases in the cost of goods, freight, and labor into consideration, and that’s particularly true in light of COVID-19. We have and will continue to adjust our price gouging thresholds to reflect these dynamics.
If you believe you are offering a fair price for a product that has been suppressed by our price gouging prevention systems, please go to Manage Inventory and re-activate your listings by clicking on Edit and then click the button Save and Finish.
If your listing remains inactive after following the steps above, you may need to update your price by going to the Fix Price Alerts page, or you can appeal our decision through the Account Health Dashboard.”
Author | Scott Margolius, Senior Consultant
In 1954, Robert Frost was asked the question, “What is the most important thing you learned in life?” he was 80 years old. He had lived through the Spanish American War, WWI, the Spanish Influenza, the Great Depression, and WWII, and his answer was, “In three words I can sum up everything I’ve learned about life. It goes on.”
It Goes On.
So with that in mind, how should we be reacting to the Covid-19 in 2020?
First, a little about the author: my name is Sprigley Allan, and for the last 10+ years, I have been helping companies around the world to maximize their exposure and sales online. I am 32 years old and I am currently considered one of the higher risk individuals due to chronic respiratory problems. So this is very real for me. This article is not a marketing gimmick or a push for extra visibility. This article is an honest effort to help fellow entrepreneurs. I can speak for everyone at Prime Guidance when I say that we care, we want to help, and we will be here throughout this challenge.
I am going to be focusing on how to get through the next couple weeks/months from both, a business and a personal perspective. So let’s start with the obvious…. WHAT IS GOING ON WITH AMAZON?
Fulfillment by Amazon and the Coronavirus (FBA vs. FBM)
One of our team members at Prime Guidance is named Matt Kubancik. Matt has extensive experience in e-commerce as a seller and as a co-founder of SkuVault is a certified logistical guru. I asked him about his opinion of the evolving FBA situation with Amazon,
Sprigley: “Hey, Matt, what are your thoughts on the whole FBA situation?”
Matt: “In my experience, you can be a lot more profitable selling on
Amazon, when using FBM. This situation has brought to light the importance of fulfillment in our e-commerce businesses. Many sellers have become completely reliant on Amazon as both a marketplace and as their fulfillment solution.”
Sprigley: “I know that I am guilty of this 🤦. I have been using Amazon to fulfill my Shopify store orders as well. Now that I know it is important to have multiple fulfillment solutions, what would your advice be?”
Matt: “I would recommend looking into a few different companies to set up a more robust order fulfillment solution. Some examples are Deliverr, ShipStation, and SkuVault. Many sellers don’t realize that there is a 1%-5% shrink rate when using Amazon to fulfill orders. This comes from Amazon losing inventory, damaging inventory, mishandling returns, etc…”
Sprigley: “Absolutely, we have been helping clients re-coup those mistakes for years. What about the shipping companies themselves? I am thinking they must be trying to encourage companies to fulfill directly.”
Matt: “All the major players like FedEx, DHL, and UPS offer different programs for small businesses. FedEx has its TechAwards program where they will send you a gift card for you to use to buy label printers, shipping supplies, and it can even be used for software such as SkuVault or ShipStation.”
Current status, as of March 30th, is that all the companies Matt specifically mentioned are still running at full capacity. Setting up a 3PL and the order management system to go with it is not a quick and easy task. Please feel free to reach out to us if you are working on this process and have questions.
Let us all remember why we signed up for FBA in the first place. Amazon tells us that the average product sees a ~50% increase in sales when they transition from FBM to FBA. With that being said, we are not advocating giving up on FBA, but instead having multiple options available for fulfillment moving forward.
Amazon Rankings and Product Launches During CoronaVirus
By far, the most common question I am getting from clients and other sellers is, “How does this situation affect my product rankings and product launches?”. So let’s split this question into two main parts.
- Amazon Ranking – Simple answer is that there is no simple answer. As most of the people reading this article know, ranking a product on Amazon is a demanding and challenging process. Once you achieve your ranking, you want to keep it! One of the most significant impacts on your rank is the consistent availability of your product. Don’t stock out! Take a look at your advertising campaigns and promotional calendar and make sure you are not pushing more sales when you may stock out on that product. If you do stock out, close the listing so that when you are back in stock, you have a better chance of regaining the Amazon BSR (Amazon Best Seller Rank) from before.
Product Launches – This is
somewhat of a passion for me. I have launched more than a thousand products on
Amazon over the last few years. When the Corona Virus started to become a real
issue, many sellers decided to postpone their product launches. Initially, I
thought that made sense as well. However, I had a friend who desperately needed
to launch a product; he had already bought the inventory and had the launch
process underway. Over the next few days (March 16 – 18) he had the most
successful launch I have been a part of in months. We discovered substantial
discounts on top of funnel traffic from both Facebook and Instagram. Not to
mention that as more and more people are being obligated to stay home, we are
seeing record amounts of time being spent online. Average daily in-home data
usage is up across the board. Here is a quote from comscore “Comparing the
same Sunday/Monday/Tuesday in March year-over-year, we can see that mobile
phone data usage grew by more than 50 percent! Gaming consoles (+48%), smart
speakers (+44%), streaming boxes/sticks (+38%) and connected TVs (+37%) all saw
significant upticks in data usage.” All of this translates to a product
launch gold rush. It is arguably one of the best times to launch a product in
recent history. There is a lot more to discuss on this topic, and we continue
to release more information in the coming weeks.
Amazon & Walmart Advertising During CoronaVirus
This topic has been… interesting. I have been advertising online since 2002 and have never seen that kind of rapid movement that we see now. Below I have listed out some basic pointers:
- Do not overreact – The advertising algorithms were not designed with moments like this in mind. For me, it seems like Prime Day and Q4 rolled into one with no warning. Many sellers are panicking and making sweeping changes to their campaigns, which they will most likely regret as things normalize. My advice to clients has been to keep a close eye on the campaigns and to make sure they are not overspending. However, they also need to make sure that they are not running out of budget. Since some of your competitors have decided to shut off their ads, your CPC’s might be going down, and some of the most valuable keywords that were previously out of your budget may be worth trying again.
- Defend Your Brand – If you decide to pull back on some advertising, keep your eye on your branded campaigns. Especially if you are stocking out on popular items or if your competitors are aggressive. Now is not a time to give up branded SERPS to competitors.
- Amazon Advertising Changes – Before CoronaVirus, Amazon advertisers were already reeling from all the updates to Sponsored Products and Sponsored Brands. There was the launch of Sponsored Brand Videos, Sponsored Display, changes to Advertising. Amazon and much much more. If you are looking for a useful resource on the recent changes, here is the link to Amazon’s advertising FAQ’s, https://amzn.to/3awXM4d.
These are a few useful pointers, but if you would like to dive deeper into your advertising efforts on both Walmart and Amazon, please contact us directly.
What Should My Team Be Working On?
This is a question I am getting multiple times a day. As business owners, we all feel responsible for taking care of our team members. I was recently on a call with Ezra Firestone from SmartMarketer.com, and he gave a phenomenal response to this question. He said that his team is working on improving the sites UX and polishing some of their more precise email flows.
He is taking this time to knock out some to-do’s that did not reach the top of the priority list before. Mostly, he is finding ways to keep his team busy during an otherwise scary time. Mark Cuban was just on CNBC, saying that how companies respond to coronavirus will define their ‘brand for decades’. I believe this is true both for our consumers and our team members. One of the tasks most of my clients are working on now is filing the top of the funnel. As we all know, that can be a very time-consuming process. As of now, most Americans are sitting on extra time, so let’s find ways of using it productively instead of just waiting for normalcy to return.
Finding The Positive
Ok, enough of the doom and gloom. What are some of the positive things we can be focusing on right now?
- People are hanging Christmas Lights & Flags to share solidarity and good cheer all over America.
- Corporate Goodness
- Burger King is offering 2 free kid meals with orders over their App through April 6th.
- Disney donated all their extra food to local charities when they closed down their parks.
- Adobe is offering Creative Cloud FREE for 60 days!
- Video Conferencing
- For many of us, we have been using video conferencing for years. While we are in isolation, keep in mind that this can be used for fun too. I have friends who are holding poker games with their teams over Zoom!
- Free At-Home Workouts
- Peloton – They have extended the Free Trial on their app to 90 days.
- Corepower – They are providing weekly collections of classes for Free.
- Check Your Library – Many public libraries have access to premium at-home workouts that are free for library cardholders. For example, my library has free access to Aaptiv, which has over 2,500 recorded exercises available.
We are committed to being there for our clients, friends, family, and industry. These are unsettling times, but they will pass. Here are some last ways to help those in need that we borrowed from Groovelife:
- Check on your neighbors by downloading the app Next Door and see if you can meet any needs for those unable to leave their houses.
- Donate to your local charities and organizations to help send aid to those who have need.
- Buy from your locally owned businesses. Whether it’s takeout, merch, or gift cards, this will support them and also their employees!
- Check-in on your friends and family. Stay positive and spread encouragement to those who need it!
Contact Prime Guidance for a free analysis of your business and learn how we can help!