Amazon FBA Pricing Strategy for Newly Launched Products
Summary
TLDRIn this video, the co-founder of Your Seller discusses a pricing strategy for successful Amazon product launches. The model suggests starting with an aggressive price, significantly lower than the target, to incentivize buyers and gain early reviews. Gradually increase the price by 5-7% weekly to maintain buy box eligibility and organic advantage. The speaker advises against lowering prices during festive seasons, emphasizing that a good product with a solid rating will sell itself. For further assistance with Amazon product launches, viewers are encouraged to contact Your Seller.
Takeaways
- đ Start with an aggressive pricing strategy to rank higher on Amazon and gain organic advantage.
- đ° Offer a price advantage for the first few weeks to incentivize buyers and build momentum for product success.
- đ Launch the product at a significantly lower price, like $30 for a product with a target price of $50, to attract initial customers.
- đș Gradually increase the price in increments of 5 or 7% each week to avoid losing the buy box and maintain Amazon's algorithm favor.
- â ïž Be cautious with price increases as Amazon's algorithm does not favor rapid price changes.
- đ Avoid significant price reductions during festive seasons as customers value quality over discounts.
- đ High-quality products with good ratings will sell well regardless of price during high-traffic periods.
- đĄ The initial losses from aggressive pricing can be offset by long-term organic ranking and reduced advertising costs.
- đ Pricing products normally and then discounting based on results can lead to unpredictable traction and higher advertising spends.
- đ Maintaining control over the initial losses allows for better profitability and organic advantage in the long run.
- đ§ For assistance with Amazon product launches or ecosystem-related needs, reach out to the experts at Your Seller.
Q & A
What is the main focus of the video script provided?
-The video script focuses on a pricing model for successful product launches on Amazon, emphasizing the importance of strategic pricing to gain organic advantage and rank higher.
Who is the speaker in the video script?
-The speaker is Chi, the co-founder of Your Seller, a team of Amazon experts who help sellers grow their business on the platform.
Why is pricing important for product ranking on Amazon?
-Pricing is crucial because it has a significant correlation with how well products rank on Amazon, affecting their visibility and sales potential.
What pricing strategy does Chi recommend for new product launches on Amazon?
-Chi recommends an aggressive initial pricing strategy, starting with a lower price to provide value and incentivize buyers, then gradually increasing the price in increments of 5 or 7% each week.
Why should sellers not price their products at par with the competition during the initial launch phase?
-Pricing at par with competition during the initial launch phase is not recommended because new listings lack reviews, ratings, or proof of concept to inspire buyer confidence, and thus need to offer a price advantage to attract customers.
What is the recommended initial pricing period for a new product launch on Amazon?
-The recommended initial pricing period is for the first three to four weeks of launching the product.
What is the maximum price increase percentage per week that Chi suggests to avoid losing the buy box on Amazon?
-Chi suggests a maximum price increase of 5 to 7% per week to avoid losing the buy box on Amazon.
Why is it important to maintain a gradual price increase over a period of 8 weeks?
-A gradual price increase over 8 weeks helps build momentum into conversion rates and positions the product for long-term success without losing the buy box or organic advantage.
What is the potential downside of not following the recommended pricing strategy during the initial launch phase?
-Not following the recommended strategy can lead to higher advertising spends, uncontrollable product traction, and a longer period of lower profitability.
What is Chi's advice on pricing products during the festive season on Amazon?
-Chi advises against lowering prices during the festive season, as customers do not necessarily see value in price reductions, and a well-rated product can sell well due to increased traffic and demand.
How can sellers reach out to Chi and Your Seller for help with Amazon product launches or other Amazon ecosystem-related issues?
-Sellers can reach out to Chi and Your Seller by contacting them at [email protected] for assistance with Amazon product launches or other Amazon ecosystem-related matters.
Outlines
đĄ Amazon Product Pricing Strategy for Launch Success
Shi Chi, co-founder of Your Seller, introduces a pricing model for successful Amazon product launches. The model emphasizes aggressive initial pricing to provide customer value and gain organic advantage. It suggests launching at a lower price, such as $30 for a product with a target price of $50, and gradually increasing it by 5-7% each week to avoid losing the buy box. This strategy is meant to build momentum in conversion rates and ensure long-term product success. The summary also addresses concerns about initial losses and the ineffectiveness of inconsistent pricing strategies, which can lead to higher advertising costs and longer periods of reduced profitability.
Mindmap
Keywords
đĄPricing Strategy
đĄAmazon Seller
đĄProduct Launch
đĄBuy Box
đĄOrganic Advantage
đĄConversion Rates
đĄBSR (Best Sellers Rank)
đĄFestival Season
đĄProfitability
đĄTraction
đĄAmazon Ecosystem
Highlights
Pricing strategy is crucial for product ranking on Amazon.
Aggressive initial pricing can provide value and incentivize buyers.
Launching at a lower price can help gain organic advantage.
Example given: Launch product at $30 if target price is $50.
Incremental price increase by 5-7% each week post-launch.
Avoiding drastic price increases to maintain buy box.
Strategy builds momentum for conversion rates over 8 weeks.
Resisting aggressive pricing can lead to higher advertising costs.
Controlling traction and profitability with a structured pricing model.
Avoid lowering prices during festive seasons as it doesn't add perceived value.
High-quality products with good ratings sell well regardless of price.
Expert consultation on Amazon product pricing and strategy.
Contact provided for assistance with Amazon business growth.
Importance of maintaining a balance between pricing and profitability.
The co-founder of Your Seller discusses Amazon's pricing structure.
Amazon's algorithm does not favor rapid price increases.
The significance of a well-executed product launch for long-term success.
Your Seller offers help with Amazon ecosystem challenges.
Transcripts
if you are confused about how to price
your products on Amazon then in this
video I'm going to talk about a model
that you can use as a guide for
successful product launches so I'm sh
chi I the co-founder of your seller we
are a team of Amazon experts and we help
sellers grow their business on Amazon
and at the same time be
[Music]
profitable now there's a huge
correlation between how you are pricing
your products and how well your products
are able to rank higher up uh and we ADV
we use a specific pricing structure that
we recommend to all of our clients to
ensure that you ex extract the uh
organic Advantage from the very first
day of your product
launch basically the idea is to go
really aggressive at the start and
provide enough value to the customer
rather than pricing it at a price which
is at par with competition because it's
a naked listing at the end of the day
and you do not have any reviews or
ratings or a proof of concept uh that
would Inspire buyers confidence so the
idea is to incentivize the buyer for
taking that risk uh and giving that
price advantage in terms of value added
benefit for the first three or four
months for the first three or four weeks
of launching so for example if your
Target price is say $50 for your product
then I recommend you launch your product
at say $30 say for the first week
increase it to $35 for second week and
then then do it in increments of 5 or 7%
each week uh this will ensure that you
do not lose your buy box and at the same
time uh you have to understand that
Amazon's algorithm does not appreciate
price increases so uh make sure that you
abide by the 5 to 7% price increase per
week rule or else you will run the risk
of losing your buy box so a strategy
like this followed over a period of 8
weeks can really build a lot of momentum
into your conversion rates and place
your product for a much more longer term
success now a lot of times sellers do
resist this strategy because of the
losses that you end up incurring at the
start of your product launch uh and they
would want to price their product at a
normal price then basically discounted
depending on whether they are able to
get the expected results out of them or
not the problem with this strategy is
it's it's it's all over the place and it
is haire and you are not able to control
the traction that your product is able
to get which will result in higher
advertising spends also and will make
sure that your profitability basically
goes for a TOS over a longer time frame
now this is a much bigger loss than the
loss that you incur saybe in the first
few weeks of your product launch because
then your tacos will be in control and
you will be able to gain that organic
Advantage from competition because your
BSR will always be at a certain level um
a lot lot of the times we also get asked
this question of how to price the
products during say uh the festival
season all the holidays now I can't
stress this enough but I've never
suggested my clients to basically go
down on price during the festive season
because the customer does not see value
in that um at the end of the day if your
product is good has a fourstar rating uh
then whether you increase the price or
not it is still going to sell for itself
because of the humongous amount of
traction and traffic that is going to
come into those days so these are the
kind of things that we basically consult
with our clients on uh so if you want to
launch your products on Amazon or need
help with anything that is within the
Amazon ecosystem uh then do reach out to
us on contact at
your.in and we'll be happy to on board
you as a client I hope this was helpful
thank you for watching
[Music]
cheers
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