When & Why to Use Algorithmic Repricing Strategies on Amazon

The post on algorithmic repricing is part of our in-depth series on repricing strategies you can use with the help of an automated repricer to boost sales and profitability as an eCommerce merchant.

The eCommerce landscape changes fast, and if you want to experience success with longevity, then you have to stay on top of what the best sellers are doing to remain ahead of their competition. One such practice that top sellers have recently embraced is algorithmic repricing, which is when your automated repricer uses built-in algorithms to dictate strategic price changes that help you achieve different business goals.

But not all repricers are created equal, and not every piece of repricing software relies on algorithms to power price changes. That’s why it’s crucial to have a solid knowledge of the available repricers, as well as all the different options for repricing strategies you can use for driving sales, scaling your enterprise, and boosting profits.

With the number of strategic pricing tools available to online sellers increasing constantly, understanding what works best, what doesn’t make sense to use, and why certain tools and tactics are necessary parts of doing business is more important than ever.

So, where do algorithmic repricing strategies fit into a successful online seller’s game plan?

Read on to discover how an algorithmic repricer like Informed.co’s can help get your products into the Buy Box and, in the case of private label products and other listings facing little to no competition, help you hit your target sales velocity for maximum profitability on the world’s most competitive marketplace.


What is algorithmic repricing?

First you had to wrap your mind around automated repricing software that uses rules-based strategies to power your price changes and keep you competitive. These days, rules-based repricing is still vital, but it’s no longer enough to fuel a steady stream of sales. Instead, you need a repricing platform that combines classic rules-based repricing with advanced algorithmic repricing strategies so you can utilize each style for what it’s best at.

Some people find themselves intimidated at the mere mention of “algorithms.” What does the word even mean?

Put simply, an algorithm is a set of logical rules that dictate how something behaves, such as in calculations or other problem-solving operations. In the case of repricing, algorithms inform your repricer how to specifically adjust your prices based on the different competitive situations you find yourself in.

The best part about Informed.co’s algorithms is that they use historical pricing data to gauge exactly what would be the best price adjustment for each of your listings at any given time. And, as you use them more frequently over time, our algorithms use machine learning technology to make better predictions on what price changes will get you the best results for your business goals.

That means algorithms are self-learning, and the more you use them, the more they improve their ability to get you the results you want.


Informed.co’s original algorithmic repricing strategy: Get the Buy Box

Algorithms can be created to perform all kinds of tasks, and at Informed.co, we’ve built multiple repricing algorithms in-house to help sellers like you attain different business goals. The first algorithmic repricing strategy we made is called “Get the Buy Box,” which helps Amazon sellers win the Buy Box without having to create their own custom rules-based strategies.

While many sellers find success with rules-based repricing, sometimes you’ll want to use a strategy that works in a more dynamic way. Get the Buy Box does just that, repricing in both directions in an effort to win you the Buy Box and then keep you in it at the most profitable price point.

To use Informed.co’s algorithmic Get the Buy Box strategy, first you must have Buy Box Eligible status — otherwise you won’t be able to win the Buy Box. That’s the most important step to get out of the way if you plan on using this strategy.

Then, to start repricing with it, you simply select “Get the Buy Box” from our list of repricing strategy options, set your min and max prices (we recommend using our profit-based or ROI-based min and max price feature, where Informed.co automatically calculates your min and max prices based on the desired profit or ROI you want for each sale), and enable the strategy on any listings you’d like to use it on.

The way the algorithm works is that it starts by analyzing your price and seller metrics against those of the current Buy Box holder. With that information, it determines an initial price that it believes will land your listing in the Buy Box and then adjusts your price to it.

If you don’t win the Buy Box after the initial price change, the algorithm will continue lowering your price incrementally until you either win the Buy Box or hit your min price. If you hit your min price without winning the Buy Box, you can adjust your repricer settings to have your price reset back up to your max price, and then the algorithm will repeat the process in an attempt to get you Buy Box placement again.

Another important note is that when you win the Buy Box while using the Get the Buy Box algorithm, your price will never be lowered when you’re in the Buy Box.

And, we’ll never raise your price when you’re using the Get the Buy Box algorithm and you’re in the Buy Box unless we detect that the competitive landscape on the listing has changed in a way that will let you hold onto the Buy Box at that higher price.

And that is how you start winning the Buy Box more often with less of a time-commitment.


Sales velocity algorithm for Amazon private label, white label, and bundle repricing

More recently, Informed.co unveiled a new sales velocity algorithm to help Amazon sellers reprice listings facing little to no competition.

Because traditional Amazon repricing strategies rely on competitor price changes to trigger your own price changes, sellers couldn’t use them to drive sales of their private label and white label products, since these typically have their own unique ASINs with no other “competitors” on them. The same limitation applied to Amazon product bundles, since these required their own unique ASIN, as well, and typically faced no direct competition on listings.

While other ASINs featuring related products to these private label, white label, and bundled products existed, the fact that these “competitors” weren’t competing on the same exact listings presented our engineers with an interesting problem to solve.

That’s what led them to focus on sales velocity repricing, where you can specify a target 30-day sales velocity for each of your listings, and our repricer will test the market by adjusting your price each day until we discover the “sweet spot” that drives enough sales to hit your target.

Informed.co uses historical sales data and your previous 30-day sales velocity to determine a starting price for testing the market. After seeing how many sales you generated at that price, it will make another change the next day and repeat its analysis of your resulting sales.

As you continue using the sales velocity algorithm, it learns what price changes are the most effective by tapping into our proprietary machine learning technology. So, over time, you’ll find that you’re hitting your targets faster, helping you raise those sales targets to reasonable levels as you continue to grow your business.

And that’s how we built an algorithmic repricing strategy for private label and white label sellers, Amazon bundles, and other products facing little to no competition on Amazon.


The bottom line on using algorithmic repricing strategies on Amazon

Staying competitive as an Amazon seller is getting more difficult by the day, and without algorithmic repricing strategies on your side, you risk losing sales to savvy competitor who are already leveraging these tools.

While the term “algorithmic repricing strategies” may sound intimidating, they’re actually simple to set up and start using. And, we think the results you’ll get from algorithmic repricing strategies, such as Informed.co’s Get the Buy Box strategy and sales velocity algorithm for private label and white label sellers, will be more than enough to convince you of their value and place in every smart seller’s tool stack.

We’d love for you to experience the power of algorithmic repricing strategies on your listings. That’s why we offer a free 14-day trial where you can test out whether these strategies make sense for your business.

If you’re interested, click the image below to get started, and we hope to hear from you soon about how these advanced repricing strategies helped you scale.