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Should Repricing Software Offer a Whole Bag of Tricks?
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A couple days ago I was interviewed by CNN.com to explain how repricing software could price a book at $23,698,655.93. No one doubts that a repricing tool was behind the story, as no sane seller would intentionally price a book for millions. But how could the repricer have been so off?
A quick Google search discovers a bunch of very affordable Amazon repricing software tools: from downloadable software to Web-based utilities. Obviously, there is no free lunch, and one typically gets the repricer he or she pays for. I suspect the problem is much deeper than a software glitch: It is rooted in the fact that low-cost repricers roll the responsibility of choosing the repricing strategy and appropriate parameters onto a seller! Clearly, the designers save money by not incorporating complex repricing algorithms and decision-making components into their tools, which in turn allows them to sell these tools cheaper. But is it good for a seller? I am almost certain that the $23,698,655.93 + shipping is a result of the seller choosing the wrong strategy or supplying the wrong parameters.
It is not the seller who should take the blame, however! On the surface, these repricing tools give you a lot of hooks and capabilities. The problem is that a seller needs to understand in depth how these tools work. Otherwise, it is painfully easy to make a mistake.
For example, one popular repricer brags that it has 80 parameters that a seller can customize. Is this really what sellers dream of? When I ask my clients what they want from a repricing software, they typically say they just want it to do its job and help them get the Buy Box while maintaining the largest profitable margin. A seller should not be pondering which strategy to choose from 80 available options. A seller should focus on working the supply chain and perfecting operations and customer service. It is the software that should bear the burden of complexity and make our lives easier!
To add some humor, I would like to end with an ancient Greek story, which is, unfortunately, quite applicable here:
A fox was boasting to a cat of its clever devices for escaping enemies. “I have a whole bag of tricks,” the fox said. “Which contains a hundred ways of escaping my enemies.”
“I have only one,” replied the cat. “But I can generally manage with that.”
Just at that moment, they heard a pack of howling hounds coming toward them. The cat immediately scampered up a tree and hid itself in the boughs. “This is my plan,” the cat said. “What are you going to do?”
The fox debated one way, then another, as the hounds continued to come nearer and nearer. At last, in its confusion, the fox was caught by the hounds and killed by the hunters.
The key differentiator of Feedvisor’s amazon repricing solution is the ability to determine pricing without requiring a seller to put together a set of repricing rules. Based on artificial intelligence computer technology of a kind typically used in stock markets, Feedvisor algorithms are capable to learn each and every competitive situation and to take the necessary action automatically. For example, it is capable to detect patterns such as price war or on contrary a signal by a competitor to raise prices. Or simply an opportunity to raise prices and keep the buy box since a high-ranked competitor has just run out of stock..
These unique algorithms enable our clients to increase their sales as well as profitability. Learn more about Feedvisor’s Repricing Solution.