I know I need to reprice my inventory in order to keep it moving and yet repricing is a huge drag. No matter what program I’ve used, it takes time and there is a sense of futility about it. It is like housekeeping…you have to keep doing it over and over again just to stay in place. And I quickly grow bored with cleaning house. Or, if you prefer your analogies science based, pricing on Amazon is chaos theory made visible. Small factors on a minute-by-minute basis can change the outcomes dramatically in a seemingly random way. While you might, for example, be able to predict that your price will get you sales, you have no idea for how long that will remain true because someone else might be sitting by their computer changing their prices too.
I’ve written blog posts and Step-by-Steps about repricing in the past largely because…it’s difficult. Most repricers out there rely on a set of rules that you set within an “if/then” universe. If the other seller is FBA, then…etc. For a short amount of time your worldview and rules work for you and then…entropy and a swift descent into chaos. That is assuming you had a good set of rules to begin with – which most of us don’t at first because we’re inexperienced. To learn rules that work for us, we make guesses and learn from our mistakes. And we do this because the alternative of doing nothing means our sales grind to a halt.
The ultimate effect of most repricers is a gradual lowering of prices. I drop my price five cents, my competition drops five cents and the cycle begins anew – the ugly “race to the bottom.” Even if you slow down the race by not dropping below your competition, that doesn’t mean they won’t keep lowering their prices or that other sellers won’t keep plunging to sales failure and losses. It seems that someone is always losing their heads over pricing and/or they don’t know how to manage their repricer properly.
When I heard Skip McGrath stand up and give a testimonial for Feedvisor at the CES II conference in September, I was immediately interested. Skip is one of my FBA heroes for one thing. For the other, he described a “set it and forget it” system that almost seemed too good to be true. He spends minutes a months rather than hours on repricing – and he is a million-dollar seller on Amazon! I started my free trial after the conference and my sales shot upwards in a way I’d never been able to achieve on my own with manual repricing or with a repricer. The best part is how little time I spend repricing and how incredibly effective it is. The program gives me detailed analytics as well. I know how profitable my items are, how often I’m in the buy box and much more.
I shared my excitement with my fellow DFW FBA’ers at dinner and there were a lot of questions. Overwhelmingly was the “is it worth it?” question because those who had looked into the program knew it was expensive. Some had concluded it was only for large sellers like Skip McGrath. Still others were interested but wondered, “When is it worth it? At what sales level?” That’s why I decided to write this blog so people could get a smaller seller’s perspective.
The first few weeks I cleared out a lot of old inventory that I just couldn’t get rid of previously without a blood bath. As you can see in the report pictured, I’ve had these darn dog toys since 2012. I’ve sold some but OMG, it has been two years – even with advertising! I sold eight units in the past two weeks which is amazing. You can see my profit margin is only 25%, but at least I have a profit margin. I just want to get rid of these dogs. The same with the toy that I’ve had for nearly a year. I had eight units left after the holidays last year and I sold them in the first week using Feedvisor. My profit margin wasn’t what I want, but I can now use the money for something that is not so over-saturated with low-ball sellers.
The number that I find the most fascinating and exciting on this report is the Current Buy Box Share (the historical is not so important right now as I’ve only been using Feedvisor for a month or so). Given that more than 70% of all Amazon buyers buy from the Buy Box without looking at other offers, getting in the Buy Box is obviously incredibly important for sales. I’m getting terrific Buy Box share without playing the lowball game. If anything, some of my prices actually went up with Feedvisor. How is that possible?
How does Feedvisor work?
According to them, it is their “fully algorithmic repricing solution.” Their secret sauce in other words. Instead of repricing based on your competitor’s prices like most rules-based systems do, Feedvisor leverages its algorithm and understanding of how the Buy Box works to reprice based on maximum profit, optimum sales or any other business goal you may have. And it is not necessarily a trade-off either. For quite a few of my products I’m making excellent profit and optimum sales. This is a really cool function. You set your floor and ceiling prices for your item. Feedvisor tells you exactly what your break-even point is so you can decide if you want reprice based on a percentage or within a price range. I generally do a price range.
If you are repricing for optimum sales, it will test your prices within your range to determine the sweet spot where you are getting steady sales at a good profit – the most dollars in your pocket in other words. This makes sense if you have a large supply of (hopefully replenishable) inventory to sell. If you are repricing for maximum profit, and don’t care as much about frequency of sales, then it will reprice for that. This is a good strategy for when you have a limited number of items with a potentially high return.
What else is in the secret sauce?
- Comprehensive knowledge of your competitors – it checks your competitor’s prices thousands of times an hour and takes into account their shipping options, available stock, seller ratings and other variables that Amazon looks at when calculating the Buy Box.
- Historical pricing trends – like CamelCamelCamel on steroids. This is a constantly growing dataset that can take into account past performance at different times of the year like Christmas.
- A constantly improving intelligence – the program evaluates every single price change to see if the effect was positive or negative and improves itself to find the perfect pricing sweet spot for your product.
Did you catch that first point? Feedvisor is checking prices on Amazon thousands of times an hour! No rules-based program can be that responsive even if you are set up to reprice several times a day. I like the intelligence aspect of this program a lot. I use the “Contribution” report to help me determine which products are making me the most money. If you look at this limited sample of my inventory, you can see that in two weeks, I made approximately the same amount of profit from sales of my first and third products. I achieved this through nine sales of the first product (accelerated quite a bit from the 2-4 I might have gotten before Feedvisor) and 34 sales of the third product. So which product is the most valuable for me?
I spent $27 to buy nine units of the first product and $34 to buy 34 units of the third product. They are still pretty close. The third product is seasonal; the first product sells all year round. I want to sell all my units of the third product by Halloween. At this rate, I’m confident I’ll make it. So now which product is most valuable to me? That’s the great thing about this report. I can easily make my own decisions and decide where I want to invest more dollars for maximum return. The number that matters most is that Profit number. It doesn’t matter if I have to sell 34 units or 9 to get there as long as my out-of-pocket costs are reasonable in relationship to my return.
Feedvisor also reprices merchant fulfilled items. I can add my expenses to the item such that it makes it easy to compare MF vs FBA fulfilled and determine which way of selling is most profitable to me.
Using the program is simple. Feedvisor pulls all my new products – they only reprice new – from Amazon.com. I click on the product to bring up this screen (below). From here I can click on the little Amazon icon if I want to see the product on Amazon and look at other sellers. The “price listed on Amazon” is my current price on Amazon. You can see how much I paid originally – wahoo! Feedvisor uses this number along with the estimated FBA fee to determine my cost. I have the referral fee of 15% (for grocery). I can now set either my floor and ceiling (which I did here) or my markup on cost as a percentage or a flat amount. Once I put in my floor price of $9.99, the program filled in the percentage for me and the markup on cost. As you can see, if I sold this product for $9.99, I’d still nearly double my money after expenses. I’ve sold several units this week for $15.99 which is higher than my original price point of $14.99. Once I set these numbers, I don’t have to do anything else. Feedvisor will adjust my prices in response to the chaotic marketplace and I’ll sleep better at night knowing that Feedvisor is trying to get the best and most profitable price for me at all times.
Even though my floor is at $9.99, the program won’t move in that direction unless I stop getting the Buy Box, and it won’t jump there right off the bat, either. It will move down by increments. Also, because Amazon uses more than price to determine the Buy Box, I’m often able to get the Buy Box at a higher price than my competition – sometimes significantly so. Dropping down to match their price would mean leaving money on the table and Feedvisor keeps that from happening. I have really good seller and customer feedback metrics and Amazon relies on these as well as price for determining the Buy Box.
Another great function of the program is it will jump UP right away if a lowballer sells out. This happened to my friend Lesley with Feedvisor. She had a product where she was sharing the Buy Box near the bottom of her range. The other seller sold out and her price instantly jumped up to what Feedvisor thought was a more optimal price based on her history of sales of this product and she sold out all her units at the higher price. If she had been repricing manually or through a scheduled repricer, she would have likely sold a number of units at the lower price and missed out on all that extra revenue simply because she didn’t know her competitor had sold out.
This feature alone is worth the price of the product to me. As we all head into Christmas, the experienced among you know how crazy it is and how you have to reprice every day – sometimes every few hours – if you are going to remain competitive. With Feedvisor, I don’t have to worry about that this year. I’ll set my range and get back to work scouting or – gasp! – spending time with my family.
Another helpful report I get is the Buy Box report. It shows me which products are getting the Buy Box and which ones aren’t. The relatively few that aren’t require my attention, the rest do not. I have a few products where I have decided to wait out a low-baller and so my floor is too high for the box right now. I now spend a few minutes each week repricing my new inventory. As new products/SKUs arrive in the warehouse I set my floor and ceiling prices. I check the Buy Box report to see if anything else requires my attention and I’m done.
I sell grocery and health & beauty which means I can sometimes run up against an expiration date. While Feedvisor doesn’t keep track of my dates (my assistant does that), it does allow me to aggressively reprice if I need to clear out some expiring units as well. Most of the time I’m pricing for profit, but occasionally speed is more important. With Feedvisor I can do both as needed.
Feedvisor does not change the chaos that is selling on Amazon.com but it keeps up with all the changes for me.
Does it make sense for you?
I love this program, but there are some cons, too. It is expensive – and I paid a year up front to get my rate. Bigger sellers will pay more although they tend to be eligible for more flexible pricing with no long-term contracts. The pricing is partly determined by the number of SKUs they are repricing for you. You get to choose which items to reprice. It is not an all-or-nothing proposition which is good. Also, Feedvisor doesn’t reprice used and collectible items – a substantial percentage of my inventory – so I still need to use a rules-based program to reprice my books and collectible games. The reason they don’t do books and collectibles is because you can’t win the Buy Box. This is a very Buy-Box focused program. The initial set up can take a few hours depending on how many new items you have since you have to go in and add the floor and ceiling for each product the first time. I had more than 200 SKUs so the first time through took me a few hours. Now I only spend a few minutes at a time.
If you are at all interested, I suggest you try the free trial and ask yourself these questions:
- How much time and money do I currently spend on repricing?
- Am I happy with my current repricing efforts?
- Will this program help me make more money?
- Will I make enough more money to cover my fee?
- What is my time worth to me?
- What categories do I mostly sell in?
- Do I tend to have competition for my products?
- Am I planning to grow or stay where I am?
Of these questions, I think the last three require the most attention. If you mostly sell books, for example, this program may not make sense until you have hundreds of non-book MSKUs. I think food, toys, pets and baby are ideal for Feedvisor because they are competitive and volatile. In the case of toys, it is Volatile with a capital V. If you are mostly selling products without competition, then you don’t need a repricer. While many people might reflexively say “of course!” to the last question, it may not be true. Many people rise to a certain level of comfort in this business and they stay there. They are running the business part-time, they might be retired or there might be another reason why they have pretty much risen to their level of sales and are comfortable there making a few thousand a month. In this case, it doesn’t make sense to spend a hundred dollars or more a month on a repricer (just as an example – your fees may be more or less than this).
In my case, I’m transitioning over the next year from part-time to full-time FBA sales. I plan to double-to-triple my current sales over the next year. For me, Feedvisor is a competitive tool that makes perfect sense. Not only have my sales already nearly tripled, but it has made me more confident in my purchases. What I mean by this is I am more willing to take on a volatile and potentially high-risk product because I know that Feedvisor will be monitoring it constantly for me and acting in my best interest rather than racing to the price bottom. I’ve been buying toys again, creating more unique listings and generally skewing my buying habits towards more new versus used and collectible items.
With the data I’m getting from Feedvisor, I can see in a glance what my top profit-producing products are and focus my attention and inventory dollars there while quickly selling out my low performers so I can re-invest those dollars into better performers. What Feedvisor does that is different from a listing and/or accounting program like InventoryLab, for example, is it brings in the Buy Box information. So while InventoryLab can tell you after the fact how profitable your product was, Feedvisor brings in the analytics of the Buy Box to tell me how likely it is I can sell it at a certain price point, how many units at a certain percentage of the Buy Box, how competitive that product is and how often I got the Buy Box to obtain this level of sales.
I am buying a basic level of service from Feedvisor. My understanding is that bigger sellers get even more intense data regarding their sales and competitors. This program will scale with me as I grow. Best of all – from my point of view – is I don’t have to think about it very much. Once I’ve set my floor and ceiling, I don’t have to revisit that item unless I see that it is not getting the Buy Box or I have a few units I need to aggressively sell.
How do I try it out?
I talked to my sales guy and the director of Marketing at Feedvisor in order to negotiate a substantial discount for you as an experiment. Go to the “contact us” portion of their site. If you and mention my name in the email when you sign up for the free trial, Feedvisor will tell you about this discount for my readers only. They don’t want me to put it in writing because it will vary depending on your level of service, but I can assure you it is significant. Even the most basic level is substantial. Bigger sellers get an even bigger discount. I hate to be mysterious, but I can understand Feedvisor’s desire not to quote a particular dollar amount since it is based on a seller’s unique use of services.
This is the first deal of this kind they’ve ever done. They don’t do discount, referral or affiliate programs. It will be a grand experiment for us all.
As we head into the busiest time of the year, you might want to try it out and see if it makes sense for you. Even if you don’t have the money today, you will know how it works when you are ready to grow.