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How to Prevent Repricing Failures

By Tami Ben-David August 18, 2013
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About the Author

A British ex-pat, Tami been writing and content-strategizing for Israeli tech start-ups for the last 5 years. When she's not writing nerdy content, you can find Tami on open water charity swims or traveling to far-flung countries.

How much would you pay for your own home cinema?

If you were to invest in a 60 inch plasma screen TV, surround sound speakers, a set of three plush cinema-style seats, a popcorn machine and a vending machine for snacks and drinks? it would set you back about $11,000.

Worth it? Maybe.

But what if you were simply looking for a large screen to affix to your living room wall and link to a projector?

Would you pay $9,525,930,932,505,110.00 for it?!

Probably not.

A recent Amazon search found that a simple fixed frame screen was priced at this hilariously extortionate and totally obscene figure. A figure that translates into nine quadrillion, five hundred and twenty five trillion, nine hundred and thirty billion, nine hundred and thirty two million, five hundred and five thousand, one hundred and ten dollars. Oh, and don’t forget the extra seventeen dollars and ninety nine cents for shipping!


repricingTo put this number in perspective, it is almost two hundred times the amount of the world’s total economic market, which is estimated at $55 trillion! Sounds unrealistic? Well, it is. As one customer review put it, “this is a great screen, don’t get me wrong, but I’m pretty sure Walmart has the same one on sale for $114.”

So what exactly happened here?

This is a perfect example of an automatic repricer gone wrong. What most likely occurred was that the seller was using a rule-based software that did not require him to set a ceiling price on the product. In addition, the software did not have the functionality to lower the price of a product when sales were not being made.

While this case is certainly entertaining, it indicates just how careful one has to be when choosing and using a repricing software.

Advantages to using good repricing software:

If you’re using good software, it will recognize a potential price war. A price war is when those selling a similar product compete against each other for the lowest possible listing price. This may sound great to customers but it can be detrimental for sellers.

Price wars decrease the value of products and cut into sellers’ profits and revenues.

Unless you’re using an Amazon repricer that knows how to cope with price wars, your own prices could also plummet, further exacerbating the problem and eating into your profit margin.

Good software is also configured properly and will prevent against mistakes that could cause you to lose money. Just as the above (albeit extreme) example illustrates how a seller loses money because the price of his product was set too high, the same is also true the other way round. A product might inadvertently be sold for less than it?s worth, causing the seller to lose profit.

There are many types of repricing software out there. Take time to do research and decide which is best for your business and which has the functions you need.

If you don’t, your product may mistakenly be priced in the quadrillions, and even with Amazon’s helpful offer of a $10 discount to those who apply for an Amazon store card, you’re still highly unlikely to make any sales!

Feedvisor’s algorithmic repricing solution differs from rule-based repricers in that it takes into account all market conditions, rather than just competitors’ prices. It finds the ideal price for each product, balancing Buy Box share and profit margin at the point that maximizes overall profits.

Maximize Demand, Profits, and Revenue With Feedvisor

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