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WINNING PRICING STRATEGIES FOR PRIVATE LABEL SELLERSPeter Kearns, Director Customer Success, West Coast | March 16, 2016
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HOW DO YOU GROW A SUCCESSFUL BUSINESS
ON AMAZON?
LET’S TAKE THE SCIENTIFIC APPROACH
Market EquilibriumA situation in a market when the price is such that the quantity demanded by buyers is correctly balanced by the quantity that sellers wish to supply.
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Markets always navigate toward the equilibriumThe equilibrium point constantly changes in response to changes in the market demand or supply
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HOW CAN WE APPLY THIS TO THE AMAZON MARKETPLACE?
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THE 4 STATES OF THE MARKET
Slow movinghighly competitive
products
Fast movinghighly competitive
products
Slow movingprivate label
products
Fast movingprivate label
products
Your sales velocity
Competition
Optimizing yourReplenishment
Strategy
Winning the Buy Box at the
optimal price
Fast Moving Highly Completive Products
Winning Buy Box at the Optimal PriceThe optimal price is the price point where your profit is optimized
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Order
s Buy Box vs Price
Profit
PriceOptima
lPrice
Diminishing profits due to decline in the Buy Box
share
Money on the table
Winning Buy Box at the Optimal Price
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Order
s Buy Box vs Price
Profit
PriceOptima
lPrice
Diminishing profits due to decline in the Buy Box
share
Money on the table
ORDERS & INVENTORY DATA
MARKET DATA
COMPETITION DATA
Orders Inventory Levels Cost Structure
Sales Rank History
Buy Box Price History
Price Bids by Sellers
Seller Metrics
Buy Box Winner
Optimizing your Replenishment StrategyReplenish when the demand is high and your stock is low?
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Buy Box Price - very high
Demand - high
Competition - low
Replenish or Liquidate?
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Demand
Competitio
n
Buy Box Price
Opportunity Zone
Cost
Replenish or Liquidate?
Replenish when the demand is high and your stock is low?
Optimizing your Replenishment Strategy
Buy Box Price - very high
Demand - high
Competition - low
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COMPETITIVE MARKETS
ADVANTAGE Buy Box reflects market
dynamicsDISADVANTAGE
Intense competition erodes profit margins
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THE 4 STATES OF THE MARKET
Slow movinghighly competitive
products
Fast movinghighly competitive
products
Slow movingprivate label
products
Fast movingprivate label
products
Slow movinghighly competitive
products
Slow movingprivate label
products
Your sales velocity
Competition
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IN ABSENCE OF DIRECT COMPETITION PRIVATE LABEL
PRODUCTS NEED TO BE PRICED ACCORDING TO THE DEMAND
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THE 4 STATES OF THE MARKET
Slow movinghighly competitive
products
Fast movinghighly competitive
products
Slow movingprivate label
products
Fast movingprivate label
products
Slow movinghighly competitive
products
Slow movingprivate label
products
Your sales velocity
Competition
Optimizing your Replenishment
Strategy
Building a Demand Model to find the
optimal price
Fast Moving Private Label Products
Building Demand Model to find Optimal PriceThe optimal price is the price point where your profit is optimized
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Building Demand Model to find Optimal PriceThe optimal price is the price point where your profit is optimized
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COSTS & INVENTORY DATA
ORDERS DATA
Inventory Levels Cost Structure
Orders Sale Price
History
Building Demand Model to find Optimal Price
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COSTS & INVENTORY DATA
ORDERS DATA
Inventory Levels Cost Structure
Orders Sale Price History
Building Demand Model to find Optimal Price
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THE 4 STATES OF THE MARKET
Slow movinghighly competitive
products
Fast movinghighly competitive
products
Slow movingprivate label
products
Fast movingprivate label
products
Your sales velocity
Competition
Mitigating Stale Inventory
Risks
Reviewing Your Product
Catalog
Slow Moving Private Label Products
Attracting TrafficBuilding
Demand Model to find the
optimal price
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FBA Long Storage FeesCharges from Amazon or
other warehousing companies for storing unsold
stock
Tied up cashCash is tied to stale
inventory instead of being used for other opportunities
STALE INVENTORY RISKS
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Utilizing Demand Model to control Sales VelocityPrice impacts demand
Velocity (Pace of Sales) can be controlled by changing the price
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Utilizing Demand Model to control Sales VelocityPrice impacts demand
Velocity (Pace of Sales) can be controlled by changing the price
ALGO-COMMERCEMarket
Pricing
Demand
Competition
GrowthTrends
Decisions
Algorithms
Big Data
AUDIENCE POLL
• Would you like to find out how Feedvisor can help grow your Amazon business? I'd like to schedule a personal demo I'd like some more information about Feedvisor's solution
THANK YOU