Learn how to build a $10,000 Amazon book business step-by-step in 90 days.
Greetings, fellow flippers!
Side Note 1: I’ve been busy working on a few software projects (related to books) and have been neglecting the blog. It’s time to rectify that with today’s post! (If you’re interested in learning more about these software projects, you can fill out the brief survey here, and I’ll even select a few of you to help me out with some beta testing.)
Side Note 2: I’m curious if any of my readers have fully embraced the 100 book weekly challenge. If you’ve jumped right in and have a success story to share, I’d love to hear from you! Please drop me a line at firstname.lastname@example.org and I may even feature you on a future blog post…
The Back Story: There have been a lot of questions circulating around the bookselling community related to the use of repricing software. Since I’m a self-proclaimed “Data Nerd”, I wanted to see if there was any substantial data out there in support or in opposition to using a repricer. My search came up empty, so I decided to kick off my own experiment to analyze the effects of repricers on my sales and profitability.
Before we get into the details of the experiment, let’s make sure we’re on the same page about repricing softwares.
What Does Repricing Software do Anyway?
In a fluid market such as Amazon, prices are constantly changing. For example, your book may have had the lowest FBA price of $14.99 when you listed it a month ago. When you pull up the listing today, however, you may discover that a half dozen other sellers have undercut your price.
In this situation, you would have two viable options:
Basically, a repricing software handles this price adjustment for you automatically, based on the pricing parameters that you select when you set up your account.
Side Note 3: If you want to read a controversial article by Peter Valley on the topic of undercutting other FBA sellers, you can check his post out here.
I won’t dive into the “ethics” of pricing in this post… but let’s just say I believe strongly in the free market. This is America after all – price your inventory as YOU see fit!
The Catch: On the surface, these software solutions seem like great time-saving tools, especially if you have an inventory of several thousand items. Who wants to spend their precious time combing through that many items every few weeks?! Once we look deeper, though, there are a number of reasons why a repricer may not be such a wise business decision after all.
Full Disclosure: Don’t cancel your repricer subscription just yet! Allow me clarify a few things…
Alright, that’s enough background information on repricers and my philosophies on them. Let’s get to the good stuff!
The Experiment: To start with, I carefully assembled two batches of 100 books each. As much as possible, I split the books into matched pairs based on sales rank and my proposed FBA price. The goal was to make the two batches as close to identical as I could. I even put the same number of penny books into each batch, provided I could still list them FBA for at least $8.00. Here’s what the two piles looked like before I listed them:
I then proceeded to list the books using my normal pricing philosophies, but I coded the SKUs as Batch 1 or Batch 2 for tracking purposes. One important note: I did not include any textbooks in either batch since I price them completely different than “normal” books. Here’s how the batches shaped up:
Once all of the books were listed and sent to Amazon’s warehouse, I flipped a coin to determine which batch would be repriced and which batch would be left alone. The coin came up tails, so Batch 2 won the battle and will be subjected to daily repricing courtesy of RepriceIt. I set the parameters to only compare to FBA pricing, so many of the books in that batch won’t be repriced at all (due to the API limitations discussed earlier).
My Hypothesis: My hunch is that I will sell more books out of Batch 2 but I will sacrifice price to do so. The question at the end of this experiment is whether or not the loss of price is worth the additional unit sales. Only time will tell!
Stay tuned as I’ll provide updates on this experiment over the next few months…
What are YOUR predictions on the outcome of this experiment? Leave a comment below to share your thoughts.
As always, happy flipping!
Howdy! My name is Caleb Roth and I have dabbled in selling books on Amazon for the past decade. In late 2014 I decided to approach my business more seriously, switched completely over to FBA (Fulfilled By Amazon), and haven’t regretted it for a second!