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My Book Repricing Experiment – Part 1

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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 thebookflipper@gmail.com 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:

  • Lower your price to be more competitive – and hopefully get the sale more quickly
  • Leave your price the same and wait for the lowball offers to sell out

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.

  • Software glitches – Software tends to malfunction from time to time, and if you are trusting your entire inventory to a repricing algorithm you may lose out big time if a glitch occurs.  Check out this story about some glitches that occurred with RepricerExpress where they dropped the prices all the way down to a penny for thousands of their customers’ items.  I’m not trying to use scare tactics to convince you to avoid repricers, but the threat is out there.  What’s worse, you won’t be getting a penny back (pun intended!) from the repricing companies (unless you know a great lawyer), so the losses will come entirely out of your own pocket.
  • Added costs, unknown benefits – Depending on which software provider you select, the monthly costs can run as much as $30-$150 per month.  Will they increase your sales?  Most likely.  But will you lose out on more profits than if you waited it out and eventually got some of those sales on your own?  No one knows for sure.
  • Amazon’s API limitations – Regardless of how you feel about the above two points, the major shortcoming of EVERY repricer currently on the market is the limitations on the data that Amazon shares within its API.  When applications send requests for pricing data to Amazon, they only receive the lowest 20 used prices and the lowest 20 new prices.  If there are no FBA prices within these datasets, then your repricer won’t know how to price your items compared to other FBA offers.  This is the same reason why your scouting apps sometimes show that there aren’t any FBA offers, yet when you click through to the Amazon page you may find more than a dozen FBA offers on the listing.  If you are selling books FBA – and you should be – many of your listings won’t be able to be repriced based on these API limitations.  Even if the software claims that it can price against only FBA listings, it can only do so if there are FBA prices in the lowest 20 offers.  But the software companies won’t admit that readily on their websites, or fewer of us would sign up for their services.  For that reason alone, I have been hesitant to jump on the repricer bandwagon.

Full Disclosure: Don’t cancel your repricer subscription just yet! Allow me clarify a few things…

  • Repricers make a ton of sense for non-media items where you can actually get the coveted Buy Box.  If you have inventory outside of books, you may get a lot of benefit out of using a repricer.
  • I actually do use a repricer (gasp!) for inventory older than 6 months in an attempt to clear out some of my slower-moving items.
  • I implement a floor price to avoid dumping my books at a loss. I’ve already made my money on those older books, so any increased sales are icing on the proverbial cake.  
  • I’m still working on the best solution for dealing with older inventory.  A repricer may play a vital role in that process – only time will tell.

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:

IMG_9536

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:

  • Batch 1 – average rank: 678k, average list price: $16.50
  • Batch 2 – average rank: 650k, average list price: $16.46

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!

31 Comments

  1. As always, you’ve written an interesting, thought-provoking blog entry! After reading what you wrote, my bet is that Batch 1 will create more money for you in the end. However, you may have to wait longer to receive it.

  2. Caleb
    I use reprice it on my inventory and reprice books with certain SKU’s after 3 months
    All I find it is just marks most all books down to your default min setting.
    as our setting is $9,95.
    I could do the same thing by hand just as easy.
    Still have to play with reprice it settings some more.
    Maybe I am doing it incorrectly.
    Maybe it is just my inventory.
    Do you experience this mass mark down to min on most all item repriced ?

    Thanks for all do and share……………..
    Pat G

    • Hey Pat,

      I do find that using a repricer is inefficient at best. It’s like when you need a scalpel but all you have is a chainsaw… If you’re comfortable doing so, you’re welcome to email me your RepriceIt settings and I’ll take a quick look to see if you’re setting up something incorrectly. thebookflipper@gmail.com

      Make sure you’re comparing only to FBA prices as a general rule. But there are some FBA sellers who don’t take advantage of FBA and simply match the lowest MF price. This would be harmful to your repricing rules for sure.

  3. I have been experimenting with a repriceit template to only raise my prices and manually repricing using “manage pricing” in sellercentral. Amazon will tell you when you have been undercut, but not when you can raise prices a bit.

    Also, you can set repriceit to not reprice if there is insufficient FBA data/competition. I have been experimenting with multiple templates that target a specific action and group portion of my inventory. I am finding that the repricer is capable of more than I originally assumed because of the a fore mentioned handicaps. I just need to put more time into setting these templates and testing them.

    • Half the battle is definitely figuring out what the repricers are actually capable of doing. Hopefully you can iron out some of the kinks to make this software successful for you!

  4. Repriceit can see the lowest used buy box price.Its part of the API. That’s what is used. I just set different price floors on different segments and let the price drop to that floor after the item has been in the warehouse at least a month. Higher ranked items get repriced faster.

    Most of the time the item sells long before the floor is reached.

  5. Can’t wait to hear how the experiement comes out!

  6. Sales rank(SR) is a big factor , IMO. Followed by volume of similar listings. I noticed that you made an effort to have somewhat equal SR with the 2 batches. I think high ( over 1M ?, over 500k ?) SR books should not be heavily re-priced. The demand is not there , according to the data. IMO, it is counter intuitive for 10 or 20 sellers to reprice heavily the high SR book. Maybe , once per week, is adequate. Heavy repricing does result in lower prices for the books for the more unique books. I prefer a higher price and waiting vs keeping up to the race to the bottom.

    • Greg – great insights! My batches were as close to identical as I could make them, and I included more lower-ranked books (over half were under 500k, a small handful were over 2MM, just to see how they would be impacted by a repricer). On a higher-ranked book, it’s all about getting the “next sale” – unfortunately if several sellers get involved in a pricing war it will just drag the prices down for everyone. That is one of the downsides for using a repricer.

  7. Caleb,

    I am glad you are trying this experiment.

    I have about 5,500 books FBA right now and have been using repriceit for about a month. It is still a work in progress for me. But the big issue I see is the constant tension between establishing a good rate of return and a strong return on investment. I know Peter Valley would disagree with me, but I believe most book sellers find it better to sacrifice the absolute highest margins in order to have a strong rate of return. I also saw where Peter has now hired someone to do his repricing manually applying Peter’s pricing formulas.

    I haven’t found the perfect solution to the repricing enigma, but I know it is an essential part of the book business.

    Thanks again for the post.

    • Stephen – thanks for reading and for sharing your thoughts! It’s definitely a balance between inciting more sales and protecting your profit margins. I believe in the free market and that sellers can make their own decisions about pricing. A strategy for a mega-seller may not be feasible for a smaller player. Congrats on getting your inventory up over the 5k mark! That’s an impressive feat.

  8. We have 43,000 active books 100% FBA. We use Repriceit exclusively for the last 5+ years. We have worked with them to get the features we needed implemented.

    We upload our inventory at a price of $999.99 and reprice it sets the initial price for us.

    Your article states that 3p sellers cannot get the buy box on media items. This is only halfway true. There is a used buybox for media items and 3p sellers can certainly hold that.

    If you set Repriceit properly, it can do what you need at the expense of not pricing some/a lot of
    Your books.

    Basically your settings have to be fairly conservatove while also pricing only against FBA as well as same condition or better.
    This way the worst thing that happens is your item doesn’t get priced because there is not enough competing offers, rather than underpriced.
    Eventually the stars will align and that item will get priced.

    You can also manually price the ones that didn’t get priced.

    • Mike,

      Impressive work on building such a large inventory of books! Thanks for sharing your repricer strategies here as well. I know that Bryan Young uses a repricer for all of his books, but I haven’t felt confident enough yet in relying completely on a repricer. Your insights give me hope that this could be possible!

  9. Need an update!

  10. Hi caleb!

    I decide to start using repriceit but ran into some problems. I checked the box that says to not price above amazon but some still do. Does this happen to you or is it my mistake with my settings.

    Thanks.

  11. Any update on your repricing experiment?

  12. I used Bryan Green’s suggested template on repriceit. I somehow seem to come across some of my items that are coming in at $100 ( way to high). I only a little over 1000 book, but trying to get up there with the “big boys!” I will fiddle around with it some more, but to be honest Im confused

    • Hey Michael – all of the repricers can only “see” the lowest 20 used offers, so if there are no FBA offers, or no FBA offers in the same condition as yours, then the software can’t reprice those books at all. In these cases, those books will be left at your initial price.

    • Where can I find Bryan’s template?

  13. Caleb,

    Great insight. Any update?

  14. This maybe a silly question, but do repricers price the up or do they only drop the price?

  15. Give us the update! 🙂

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