$25

FBA Pricing Tip: Why $25 is the new “magic” price point

| 25 Comments

Old rules:  Here’s how the game used to work –  If you weren’t a Prime member, but purchased at least $35 worth of Prime items at the same time, you could still qualify for free shipping.  You wouldn’t get free 2-day shipping that way, but at least you saved money by not having to pay for any additional shipping costs.  For sellers, this meant that $35 was the “magic” price point where you could appeal to a greater number of customers.  If you were going to sell a book for around $30 based on other Prime offers, you could actually ignore those lower-priced offers and instead price your copy at $35 and still have a decent chance of getting the sale.  Here’s an example of this phenomenon in action from one of my own sales:IMG_7895 (1)IMG_7894 (1)

As you can see, at the exact time my order went pending for $35, there were several cheaper Prime offers available in the same condition as mine (Good), from reputable sellers (FranklinMedia has 100% feedback with over 1,100 reviews).  Why did this particular customer skip those better-priced items in favor of my $35 copy?  They were apparently a non-Prime member who wanted free shipping.  It doesn’t have to make sense – a customer’s purchasing psychology would be the topic for an entirely different blog!  You simply need to understand that this does indeed happen, use this knowledge for your own benefit, and price accordingly in certain scenarios.

New rules:  There’s a new “magic” price point on the block now – $25 has moved in and has kicked the old $35 pricing philosophy to the curb.  Amazon recently announced that they have moved the $35 free shipping price point up to $49, but for books the price point came down to $25.  Here’s the actual verbiage from their site:Screen Shot 2016-02-22 at 8.09.37 AM

What this change means for booksellers:  If you run across a scenario where you plan to price one of your books in the $20-24 price range, you may want to bump it up to $25 instead.  Not only will you be avoiding the competitive “race to the bottom” that happens so often with repricing softwares, but you may also appeal to a new group of customers who are looking for a free shipping option!  This strategy may not work all the time, but it’s at least worth a second thought during the pricing process.

What this change DOESN’T mean for booksellers:  If you have a plethora of books priced at the old $35 price point, don’t rush to drop these prices to $25.  Prime customers are used to paying more for items with that Prime logo next to them – sometimes a LOT MORE – than they would for the same item from a Merchant Fulfilled seller.  If you’re the only Prime seller on the listing, keep your price where it is.  If anything, consider raising your price if the item is selling often enough to fully take advantage of how much more Prime customers are willing to pay for the benefits of Prime.

Endnote:  Have you had any success using the $35 price point in the past?  Share your story in the comments below!  If you want to take advantage of the higher prices that you can command for your books by selling them to Prime buyers, check out my eFLIP software.  eFLIP helps you find cheap books from Merchant Fulfilled sellers that you can resell at much higher FBA prices.  The best part?  You can now source books from anywhere with an internet connection!  Start your risk-free 3-day trial today.

Have a flippin’ awesome week, bookselling comrades!

25 Comments

  1. Thank you so much for this timely information! I always enjoy your posts 🙂

  2. I really enjoyed this informative blog and am eager to give it a test drive.
    Is it possible in your example case that the customer filtered a search to show only books that would receive the free shipping? If so, maybe he only saw your selection and not the other lower-priced offers due to his search. That’s not to say that the psychology aspect is not true. I firmly agree with that.

    Regards,
    Kim

    • Hey Kim – I’m glad you found the blog! I don’t believe the above scenario is what happened – if they searched by free shipping or Prime, either way they would have seen the lower-priced offers that were present at the time they purchased my copy. My hunch is that Amazon is trying to steer more people toward Prime membership by tweaking their free shipping price points.

  3. IMO this is huge. As someone who gets most of their inventory from Amazon and flips back on Amazon, I think this opens up a lot more books. I will find books occasionally that get as low as a penny but rise at other times of the year to as high as 9 or 10 dollars. These books would sustain a $25 FBA offer but supporting a $35 FBA offer would be more difficult. Those kind of books would clear $14 profit give or take some. Paying $4 and pocketing $13 – $15 is a solid win.

  4. Today’s project: repricing all my $24.99 books to $25.05,

  5. So now we have to go and change the description that mentions 35$ free shipping for all our books. Oh well.

  6. Caleb,
    Awesome information as always. There’s always so much value behind everything you put out, and I always enjoy and appreciate it.

  7. Love the blog Caleb. I’m a bookseller also, began researching the business back in November and just started actually buying and listing books this month. Blogs/websites like yours have been SO helpful to me in starting this business…so thank you! Really looking forward to the repricing experiment and sales rank experiment results as well. Keep up the good work my friend!

  8. Caleb, thanks for always keeping us informed regarding important information which affects Amazon FBA sellers.

  9. Having an unusually slow week for my books. I have a good mix of short head/long tail. Any ideas? My mix is mostly non-fiction business/academic press/niche non-fiction. Wondering if my inventory is too academic-leaning for this time of the year. Either that, or maybe my pricing is too ambitious?

    • Hey Smitty – February is the slowest month for selling books. Hang in there, keep sending in more inventory, and sales should begin to tick back upwards in the next few weeks!

      • Thanks! Good to know!

      • Thanks, Caleb. I had found my book business growing arithmetically from the time I had started in June, 2015 through Jan 2016. Suddenly, in Feb 2016, my sales volume dropped significantly through April 2016. I have 100% positive feedaback and all my metrics are checked green. My inventory is mostly books that scan under 1 million and hasn’t changed. I have about 800 books in inventory so I would assume that’s a large enough sampling to establish consistency. Most of my books are VG or or LN. I simply don’t understand the fall off.

        • Are you still sending in fresh inventory on a consistent basis? That’s the most significant factor in inventory turn rates in my perspective. Also, 800 books is not much in the way of inventory levels. You should get that up to 2k or more to see consistent sales.

  10. Caleb,

    I have to commend you for creating this awesome blog! Great information!

    As a person who has had a lot of experience selling collectible books in a large new/used bookstore in the 90’s, I guess I have made some false assumptions regarding the present value of collectible first editions. It seems the wheels have fallen off fiction since my venture into retail selling in the 90’s. I have collectible status for books but someone had posted to me on the MST site that “The collectible book category is where books go to die.” What’s your take on that?

    • Sellers can’t see collectible books easily – they have to click around several times to find that category, so in my experience they just ignore them and buy Used or New.

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