Read this article (https://sellersessions.com/product-quality-perceptions/) and then the scientific paper direct from the horse’s mouth.
Premium priced products often are perceived as higher quality by Amazon customers. They don’t mind paying a bit more if they believe the product is worth the value.
This has a certain bandwidth—it’s the difference between what you charge and what customers are willing to pay. For every successful brand claiming they are thriving with premium priced products, there are many more—hundreds to thousands—that didn’t succeed.
While there’s no strict definition, a premium price might be £2-3 higher than the average price of the top competitors, or even £10 higher. The key to your success lies in understanding the bandwidth and the tolerance customers have for parting with their money.
Chad Rubin, a highly regarded Amazon seller, has developed an AI repricing tool that can be very effective in finding these insights around price (on your product), including the bandwidth and tolerance to purchase levels by the Amazon customer.
Traditional repricing tools were quite limited, but with advancements in AI, which has been around for years, the new versions are significantly better. Rubin has invested $2.4 million of his own money in this technology, betting on its effectiveness.
Premium-priced products do not equal desirable rankings.
Shock horror, people still believe that Amazon is the go-to place for deals.
Look at past shareholder documents and the current issues around price fixing and monopolies. Then examine the top three placements across most product categories and check the prices.
Count how many products you see that are not high street brands or industry giants like Nike, Adidas, or Apple, that are not premium-priced. In most cases, you’ll find that success often involves a strategy of lower pricing, high volume, and defensive play because you have a target on your back. Everything has a price.
What if there is a sweet spot? Where you are in the top ten, but find the niche for good sales, margin, and it’s easier to maintain than to move onto the next product?
What do most successful Amazon sellers have in common? A robust pipeline where they develop products that meet customer needs, support the successful ones, and eliminate the unsuccessful ones as quickly and efficiently as possible.
I think, I feel, but I’m not sure
Entrepreneurs are, by nature, risk-takers and leverage as much as possible until they squeeze every last drop from the lemon (Amazon sellers are no different). They notice things others overlook, they tune out the noise and keep going, and then, at some point, some will prove everyone wrong.
But what if what you think and feel are incorrect? How many businesses fail compared to those that succeed, how many last longer than five years, and how many not only succeed but also achieve a spectacular exit? It’s crucial to have a vision while also operating in objective reality.
