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Paulina Masson is with us taking us through price optimisation and tactics we can employ, customer psychology and how consumers see prices to increase your conversions and split testing to ensure your price change tactics are statistically relevant before you drop a change
- Founder of Shopkeeper accounting solution (profit dashboard)
- Always need some Amazon analytics
- Favourite topic is the numbers – pricing, fees, savings and all
Coupon Codes pricing
- Everyone knows that coupons exist but not every seller is using them for price optimisation
- Coupons used to only exist on US markets and recently made available on European side
- Called vouchers in Europe for pricing automation strategies
- Whatever is new you should be the first to jump on it as you get highest conversion rates
- Enable vouchers for every single product that you run
- Green flag on your search as a conversion colour
- Can be used in a launch, instead of dropping price use a discount for conversion and price optimisation
- Paulina suggests to use a $amount off rather than a %figure off
Financial Limitations
- Moste sellers deciding prices are looking at competitors to judge
- Take a snapshot on the single day but that is a mistake
- Take a middling price based on competitors
- That price decision is based on their own judgement of what they would pay and feel scared to charge more than their own personal financial limitation
- But just try charging more than your limit and see how it sells
- The price can be a signal to buyers of a higher quality product
Free Shipping
- You have to spend a certain amount to get free shipping
- If your prices are somewhere a little lower than the limit then it becomes more expensive for the buyer
- By raising your product price to just above the shipping limit then you gain more profit and the seller gets the product cheaper
Consumer Psychology
- You will see prices that are X.99
- The consumer is conditioned to expect a price of X.99
- We only tend to read the first digits not the 99
- As we are brainwashed to think we are getting a bargain as it’s .99
- If we see two products the same at one being $30 and another at $29.99 then we perceive the $30 as of higher quality because it’s not X.99…
- As a seller you can choose to be a bargain product (X.99) or a premium luxury item at $30
- Make it a more luxury looking product but round up the product price
Dropping Quickly and then Raising prices
- Launch: don’t recommend launching at low price
- Reality is you will lose your own buy box
- Amazon takes away buy box if you raise your price too suddenly
- You need to stagger the price increase to not trigger this
- Or you could go with a voucher code to avoid dropping the physical price to get around the limitation
- Start with a 40% margin and give a bigger coupon
Business Buyers
- You can enable Business Buyers (Services>Amazon Business) in your Seller account
- Enable for business buyers to see special listing deals
- You can customise the discounts you give for volume purchases
Split Testing
- Don’t be scared to charge more – split test it
- You must calculate how many views you need to your listing to decide if the traffic is statistically relevant
- Use ABTestguide.com to put in the conversion rate you want (unit sessions percentage) say you want 15% from 12%
- I want to see if the increase in price will give me the goal conversion
- If my traffic is 500 visitors a week it tells me I need to get 1,200 unique visitors for a single test variation on that price – this means it’s 2 weeks at one price to know if the price change is working or not
- Beware of seasons that come into play as this could seasonally affect your metrics
- If you see the conversion rate drop to -12 or -5 so don’t sit and wait for the test to complete as 4 days of poor conversion will affect your Amazon ranking – STOP the TEST early
- PPC bids can also affect your split-testing – might need to turn off or get a tool to track organic sales
- If you don’t reach the stage of statistical significance then you’re not able to make a solid decision
- A quiet market it takes longer
- THis is not a tactic for a new product
