Amazon Automate Pricing vs Informed.co: How the Repricers Compare
In spring of 2016, Amazon released a rules-based repricing tool for third-party sellers called “Automate Pricing.” The tool is included in Amazon’s Professional selling plan and offers sellers a way to automatically update their prices in relation to competitors. We know what our readers want, and we’re sure you’re wondering: Who wins the repricing battle of Informed.co vs Amazon Automate Pricing?
After listening to feedback from Amazon sellers, sifting through Seller Central forums, and conducting our own analysis of Amazon’s free repricing tool, we’ve come to this conclusion:
The arrival of Amazon’s Automate Pricing makes the power and depth of Informed.co even clearer.
Read on to find out why there’s no contest between Amazon’s free repricer and Informed.co’s robust pricing intelligence and automated repricing platform.
Gradual, strategic price changes with Informed.co vs instant price-plunges with Amazon Automate Pricing
According to sellers who’ve tested Amazon Automate Pricing, there’s no way to change prices incrementally.
Ryan Grant of Online Selling Experiment notes:
“If you and another seller have Automate Pricing going on the same SKU, it will jump straight to the price that the combination of the two rules dictate.”
To elaborate, this is how Amazon explains it:
“Your price will settle to the final level dictated by your rule and the other seller’s rule. For example, if you and the other seller both have the rule “Stay below the lowest price by $0.10″, your minimum price is $10.00, and the other seller’s minimum price is $10.50, rather than trigger numerous price changes in small increments, your price will go to $10.40, and the other seller’s price will go to $10.50.”
Grant then details how this affects sellers:
“With Amazon’s Automate Pricing, this can mean that your price can go directly to your minimum if even one other seller has a rule that would cause that. Even if you are on a matching profile, if another seller is set to beat your price, the prices will go immediately to whichever one of you has a higher minimum price threshold set.”
For sellers looking to maximize margins, this isn’t news that you want to hear. Amazon is essentially speeding up a “race to the bottom,” eroding any chances of decent profits for all sellers involved.
Sellers using Amazon’s Automate Pricing feature may wind up selling at or near their set minimum prices right away. That’s far from the goal of any Amazon seller.
On the other hand, when you use Informed.co to handle your repricing needs, your prices adjust incrementally. This allows time for marketplace corrections and also helps maximize your profit potential.
Informed.co lets you to reprice upward; Amazon Automate Pricing does not
Sellers who are not well-versed in repricing often fail to realize that advanced repricers can also reprice upward. There are countless reasons for repricing higher, all of which are used to help boost your bottom line.
For example, if you’re in the Buy Box with no competition, you should be able to automatically reprice to your pre-set max price. After all, you have leverage over potential buyers when you’re the only seller carrying what they want. Buyers will be forced to pay a premium if they truly want to own certain items in those situations.
You may also want to reprice upwards when competition matches or is priced below your min price. The logic is that you let them sell out of a SKU at a low-margin price. Then, once you have fewer competitors for that SKU, you can reap the benefit of selling at a higher margin. Of course, you need to have patience for this strategy to work. But, if your goal is higher profits (as it should be) rather than sales volume, this tactic is for you.
Amazon Automate Pricing falls short with its basic competition settings
Amazon Automate Pricing only lets you narrow down the competition you reprice against based on a few factors. When measured up against Informed.co, the new Amazon tool falls way short.
Consider this… With Amazon Automate Pricing, you can ONLY narrow the competition you reprice against in the following ways:
When comparing your price to the Buy Box price, you can choose to compete against:
• All offers for the same ASIN and condition
• Only offers with the same fulfillment method
• Only offers from other third party sellers
When comparing your price to the lowest price, you can choose to compete against:
• All offers for the same ASIN and condition
• Only offers with the same or better sub-condition
• Offers with the same fulfillment method only
• Only sellers with a feedback rating within 5% of yours, or higher
• Offers only from other third-party sellers
One Reddit user under the handle “-zimmicks” had this to say about Amazon’s new repricer in the popular FulfillmentByAmazon subreddit:
“After seeing the limited rules available, I decided it was not worth the effort to even attempt the setup.”
This response came after another user had asked if anyone had tried Amazon Automate Pricing. While “-zimmicks” admitted to not having used it, he analyzed it and made a conscious decision not to waste time testing something he could clearly see was inferior to third-party repricers.
Delving deeper into the limitations of Amazon Automate Pricing
Here’s how “-zimmicks” explained what he found to be the pitfalls of Amazon’s new repricing tool in detail:
“[Amazon Automate Pricing] compares your price to either the lowest price or the buy box price. You then have 3 options: beat, match, or just above. You can choose to compete based on condition or fulfillment method, and can choose [to compete against] only 3rd party sellers (exclude amazon).
Here are the problems with those options that I see. If you are FBA and you choose to compete with only [sellers using the] same fulfillment method (FBA) based on [the] buy box [price], it will ignore FBM sellers and [your repricing rules] won’t trigger when you lose the buy box to an FBM [seller]. If you don’t ignore FBM and choose to match [the] buy box [price] (which will get you a rotation with other FBA sellers), you will be priced much lower than you need to be to win the buy box against an FBM [seller].”
Then he goes on to say:
“You have to set min/max [prices] (which is a good thing to do anyway). Once you change your price by any other method (manually, feed, etc.) the repricer turns off for that SKU until you manually turn it back on. You cannot activate it by feed.”
On the other hand…
Informed.co has a total gamechanger built in that lets you set min prices based on your desired minimum profit, while Amazon doesn’t
It’s true: You don’t have to crunch through costs like sourcing, shipping, and FBA fees to calculate min prices for your automated repricer anymore.
That’s because Informed.co’s built in profit-based min and max price feature allows you to set the minimum profit you’d like to make per sale in any strategy you create, and with that number, the software will reverse-engineer the min price for any listings that you apply the strategy on.
Here’s an example:
Suppose you’re an Amazon seller with some FBA listings and some MFN listings and you want to create a repricing strategy for your low-priced FBA products that nets you a minimum profit of $2 per sale.
You decide on a few custom rules that would price-match other FBA sellers and price above MFN sellers by $1.00.
Then, when you’re finishing up the setup for the strategy, you’ll get to the part where you set your min and max prices. Choose the “Profit” option, and then input your desired min and max profit per sale — you can choose a percentage (say, 30% profit per sale), or a fixed currency amount (in your case, $2 for your min profit, and you can use other currencies if your default marketplace doesn’t transact in dollars).
For max profit, while it’s tempting to input “infinity” or something in the millions, it’s best to set a cap on your price-range with something reasonable based on current market conditions.
When you complete the setup for your strategy, you can then apply it to any FBA listings you want, and Informed.co will automatically calculate the min and max prices based on the min and max profit you set by using Amazon’s APIs to pull in shipping costs, marketplace and FBA fees, and pulling in your product costs from your uploads.
It’s the simplest way to set min and max prices while ensuring you earn a desirable minimum profit on every sale you make.
You can’t even bulk upload your repricing rules into Amazon Automate Pricing
That means you have to manually input all of your min and max prices for every. single. SKU. Talk about a tedious, time-consuming task!
With Informed.co, it’s fast and easy to upload your costs for each item with an Excel spreadsheet and have them feed into our profit-based min and max calculations mentioned in the last section. These features cut your setup time a ton, allowing you to focus on other important things on your to-do list.
Sellers looking to minimize manual data entry should then avoid the time-suck that’s built into Amazon Automate Pricing.
Informed.co also has vital exclusion settings that Amazon Automate Pricing doesn’t
One of Informed.co‘s best features is its ability to exclude competition based on their number of handling days.
This lets sellers hone in on stronger competitors to avoid repricing against those who offer low prices with excessively long handling days and, thus, a longer “complete delivery window,” a.k.a. the total time it takes for a product to arrive in a customer’s hands.
Because some buyers would gladly pay a higher price to get a product faster, this exclusion setting is extremely valuable.
What makes Informed.co even stronger is that it empowers sellers with the ability to exclude competitors who are backordered.
This feature is a major advantage because there’s no reason to compete against sellers who are out of stock.
Having your repricer wired to include backordered sellers by default (as Amazon Automate Pricing does) has a negative impact on prices and profits.
In fact, one Reddit user tried Amazon Automate Pricing and stopped using it because it didn’t include this powerful feature. Under the Reddit handle SnowmanOlaf, this is what he had to say:
“I’ve used [Amazon Automate Pricing]. Can’t have different rules for specific sellers, can’t ignore backordered sellers, turns off repricing when you change your price and the interface is clumsy.”
Which brings us to the next major difference between Informed.co and Amazon Automate Pricing:
Amazon Automate Pricing isn’t optimal for listings competing against both FBA and MFN sellers
Reddit user “-zimmicks,” who was quoted earlier, also had this to say about Amazon Automate Pricing:
“You can set it to stay a certain amount above the buy box when competing against FBM [sellers], but that is only good if you are the only FBA [seller], and you also need to know how much to stay above and that varies by listing and price. If you are competing with both FBM and FBA sellers on a listing, you would need 2 different strategies, which [Amazon’s new] tool does not allow you to do.”
Ryan Grant of Online Selling Experiment touched upon this issue, too:
“[Amazon Automate Pricing] only lets you compete against the buy box [price] or the lowest price on the listing. It doesn’t have a great option for competing with a mix of FBA sellers and merchant fulfilled (MF) sellers on a single listing. You can select for example to compete only with FBA sellers, but then if you lose the buy box to a MF seller your pricing rules won’t take effect.”
“If you choose to instead simply match the buy box and don’t take the fulfillment method into account you will end up directly matching the MF competition and pricing lower than you would need to in order to win the buy box. This is important, as on some listings I can be 10% higher than MF competition and still win the buy box a larger percentage of the time. A potential workaround is likely to set it to a % above the buy box if you are only competing against MF sellers. [But] [t]his rule will cease to have the same value…if another FBA seller comes in.”
Grant sums up the cons of Amazon Automate Pricing like this:
“Long story short, the tool doesn’t allow for the ability to have one set of rules for MF and one for FBA, which creates some challenges.”
On the flipside, he had this to say about Informed.co:
“With Informed.co, I can setup a profile to do one thing to my price if there is FBA competition and then another if there is only MF competition on a single listing.”
This flexibility allows Informed.co users like Grant to have different repricing strategies against FBA or Merchant-Fulfilled sellers for the same SKU. According to Grant, this is a true game-changer.
Which brings us to the next point about Informed.co vs Amazon Automate Pricing:
Amazon Automate Pricing holds your price when you land in the Buy Box
Yep, you heard that right.
Sellers using Amazon Automate Pricing have no flexibility to raise their price when they win the Buy Box.
According to Amazon:
“Your rule will stop repricing once you are the Buy Box winner.”
A true intelligent repricer like Informed.co can slowly raise your price when you’re in the Buy Box. That way, you can test if higher profits are possible when you’re in the best position to make a sale.
Sellers have to wonder why Amazon doesn’t offer this functionality when it’s to sellers’ advantage to have this feature.
But the lack of features within Amazon Automate Pricing when compared to Informed.co doesn’t end there:
Amazon also doesn’t let you exclude specific sellers from competition
Suppose you want to focus on one specific group of competitors for certain SKUs. Or, let’s say there are a couple of competing FBA sellers who don’t seem to understand the importance of margins.
With Amazon Automate Pricing, you won’t be able to target or exclude these specific competitors from your repricing strategies.
With Informed.co, it’s simple to hone in on exact competitors, so you’re able to drill down your strategy much more. This helps you focus on only your toughest competitors, fueling your sales and profits and helping you avoid underpricing products.
Informed.co vs Amazon Automate Pricing: More things to consider
Beyond all of the differences in functionality and power between Informed.co and Amazon Automate Pricing, there are other considerations.
Chief among them, think about this: Why would any third-party seller want to use a tool created by one of its main competitors?
“For those who use automated repricing, one would be very foolish to use Amazon’s tool over a private third-party’s tool. Amazon is also a competitor on the Amazon marketplace (obviously), and in using their repricing tool one divulges to Amazon the minimum price at which one is willing to sell.”
Some sellers fear that the underlying reason behind Amazon’s foray into automated pricing is more devious than meets the eye.
Of course, we can’t say for sure whether Amazon’s intent is to glean secret pricing information from third-party sellers. But, sellers must understand that Amazon holds the power here, and they should carefully consider whether they feel comfortable revealing their minimum selling threshold for various products before deciding to use Amazon’s new tool.