New Feature: Auto-Calculate Min & Max Prices Based On Target Profit
If you’ve ever used automated repricing software, then you understand how vital it is to set min and max prices. You might also know that setting min and max prices can require some work.
Also known as your minimum and maximum price points (or price floors and ceilings), these price thresholds are there to ensure that you’ll never sell something below a profitable (or at least a break-even) price — and you’ll never be priced above an acceptable amount for the marketplace.
Think of min and max prices as profit security and loss protection for your listing prices.
Informed.co users know min prices well; that’s because repricing can’t be enabled for a listing until its min price is set. Max prices are not required for repricing, but they can help you avoid losing out on sales due to being overpriced.
Until recently, the way sellers set min and max prices on Informed.co could only be done two different ways: manually or by building formulas. But starting today, Informed.co users have another way to set min and max prices — where they no longer need to worry about potentially making mistakes when calculating them — thanks to this new, major product update:
Now, our users have the option to use profit-based min and max prices for Amazon and eBay listings.
This update has everything to do with the fact that Informed.co now integrates Amazon and eBay marketplace fees into our software (in addition to your sourcing costs), which allows us to reverse engineer your min and max prices based on your desired target profit per listing.
So, what does that mean for you?
Read on to learn about the impact of this groundbreaking advancement in how to set min and max prices for automated repricing strategies in Informed.co.
The old ways of calculating min and max prices
Before we added the ability to use profit-based min and max prices in your strategy settings, Informed.co users had to manually input their min and max prices or use our formula builder to set them.
While these methods have worked effectively for our users for years, they require a deep understanding of fees and costs. Plus, you need to make careful calculations to ensure your min prices are high enough to recoup sourcing and shipping costs, fulfillment fees and more, all while still making a profit.
On top of that, sellers setting their min and max prices manually need to determine prices that account for their desired minimum profit per sale. Or, if they’re using the formula builder, they need to build profits into their formulas by adding a fixed amount or percentage markup to their base costs.
Although it is rare, both of these methods can leave users open to human error, such as inputting a decimal in the wrong place or miscalculating costs. That’s where profit-based min and max prices come into play.
It all started with the new Profit column on the Listings page
If you’re already an Informed.co user, then you probably noticed we added a Profit column to your Listings page this spring.
The Profit column shows the estimated profit you’ll earn on a sale at a listing’s current price by subtracting:
• the cost of goods
• marketplace fees
• shipping fees
• FBA fees (if applicable)
The Profit column also has a calculator icon next to the amount of profit shown for each listing at its current price.
Hover your mouse over that calculator and a caption will pop up displaying exactly how Informed.co arrived at your estimated profit for that listing at your current price:
Hover over the calculator icon in the Profit column, and you’ll see how your profit for each listing is calculated at its current price. You can also hover over the calculators in the Min and Max columns to see the details of your minand max prices.
Informed.co calculates your Amazon marketplace and FBA fees by using Amazon’s GetMyFeesEstimate API call. Fees for eBay listings are calculated at 10% of your final sale price.
Shipping costs are tied to SKU-level information that Informed.co also pulls from Amazon and eBay. Informed.co users also have the ability to manually input their costs or upload costs in bulk using templates and hosted file uploads.
And, Informed.co users have the luxury of linking their sourcing cost information just once and having it automatically update (so they never have to go back and make changes) and sync to your repricing strategies by taking of advantage of seamless integrations with:
That leads us right to our new feature of being able to set profit-based min and max prices.
You decide on your desired profit, Informed.co automatically calculates your min and max prices
With all the necessary cost and fee information being fed into Informed.co via hosted file uploads and Amazon’s GetMyFeesEstimate API, our users can now set min and max prices for their repricing strategies easier than ever before — no calculations necessary.
When creating a strategy with profit-based min and max prices, you select your desired minimum profit and the maximum profit you believe you can make per sale. Then, Informed.co automatically calculates the min and max prices specific to each listing you set to that strategy.
Next, we’ll show you how it looks and exactly how it works in the app.
Using profit-based min and max prices in Informed.co
To get set up with profit-based min and max prices, start creating a strategy. When you get to the Set Your Min & Max section (shown below), select the Profit option (it will be highlighted in blue when it’s selected).
Next, decide if you’d like your profit-per-sale to be a percentage or fixed currency value.
If you choose “Fixed Value” and your listing appears in a marketplace that uses a different currency than what you’ve specified, Informed.co will automatically convert the currency for you.
Once you decide if you’d rather target a percentage or fixed value for your profit, decide on the minimum and maximum amount of profit you’re looking to make on each sale.
It’s as simple as entering just two numbers, one into the Minimum Profit field and one into the Maximum Profit field.
The new feature includes example min and max prices based on a variety of sample products (that you can refresh to experiment with different items). If you change a number in the Minimum Profit or Maximum Profit fields, Informed.co will automatically update the example numbers, as shown in the gif above.
The numbers you input in the Minimum Profit field and the Maximum Profit field will represent the minimum amount of profit and the maximum amount of profit you’ll make on each listing associated with this strategy.
Once your desired min and max profit percentages or amounts are set, your min and max prices will be automatically calculatedby Informed.co.
You can always view these prices on your Listings page and see a detailed breakdown of how they were calculated by hovering over the calculator icons next to each min and max price.
And, as mentioned above, you can also see your estimated profit calculations at your current prices by hovering over the calculator icons to the right of the prices displayed in the Profit column.
Create and test an unlimited amount of strategies using profit-based min and max prices
Profit-based min and max prices allow you to easily tweak your price ranges so you can see if it’s possible to drive more sales at different margins.
For some products, you may decide to target a percentage profit per sale, where you earn 5% profit at a minimum and 100% profit at a maximum, for example. For others, you might think a set dollar/Euro/pound amount of profit is a better strategy, where you hypothetically earn a minimum of $5 profit per sale and a maximum of $50 profit per sale. It’s up to you.
After monitoring your sales with each strategy for a set period of time, you’ll get your baseline results for that strategy. From there, you can determine whether it makes sense to update your min and/or max prices to change up your margins.
You may opt to aim for higher profit margins if you feel you can still make enough sales at higher min and/or max prices. Or, you can lower your min prices (and/or max prices) and risk lower profits per sale in an effort to drive more sales and, hopefully, achieve higher net profit due to higher total sales in spite of lower marginal profit.
And if you’re happy with the amount of sales you’re getting, you can always keep your strategies running just as they are.
Strategies with profit-based min and max prices can be applied to as many listings as you want, so you may want to create and experiment with numerous strategies using this new feature.
For example, you can create one strategy to make a minimum of $2 per sale and a maximum of $25 profit for low-cost products; a second strategy to make a minimum of $10 profit per sale and a maximum of $125 for mid-cost items; and a third strategy to make $20 minimum profit and $250 maximum for high-cost listings.
Test and experiment with different profit margins to optimize your strategies over time.
What situations are profit-based min/max prices best suited for?
You can see that this new feature removes the need for doing mathematical calculations to determine your min and max prices because all the necessary numbers are fed into Informed.co and calculated by our software. It’s like reverse-engineering the old model for calculating min and max prices.
So, what situations would strategies using profit-based min and max prices be ideal for? Well, everything.
Consider the typical Informed.co user who uses bulk uploads to enter (and, hopefully, automatically update) the costs of each item listed. Instead of creating a complex strategy using the formula builder to determine min and max prices, that user can now shift focus to the amount of profit per sale she wants to earn and then let the software calculate her min and max prices.
Profit-based min and max prices also make life much easier for users in situations where they’d rather not input the exact cost prices for their listings.
Consider this example:
Suppose you sell books on Amazon and you buy a bulk shipment of 5,000 used paperbacks from Goodwill for $500. You may not want to devote time or money to figuring out the cost of each individual book, so instead you assign an average cost of $0.10/book ($500/5,000 books = $0.10/book) and quickly produce a spreadsheet with all 5,000 listings set with a cost price of a dime.
From there, you can set up a strategy of your choice using profit-based min and max prices to compete against your desired competition (using our robust exclusion settings to narrow down specific types of competition) and then repricing according to one of our types of strategies:
Perhaps you decide to set a min profit of $3 per book and a max profit of $25 per book. Even if you sold all 5,000 books at your min price, you’d still consider the used book purchase a wildly profitable investment.
And, if you see your results are subpar after monitoring your sales under this strategy over time, you can (and should) make small tweaks to your min and max prices by setting a lower min profit and possibly lowering your max profit, as well.
The bottom line on profit-based min and max prices
As you can tell, the addition of profit-based min and max prices is going to make a massive impact on your life as an Amazon or eBay seller.
You no longer need to waste time deducing your min and max prices with complex calculations and formulas (unless you enjoy that sorta thing…), and now you can easily set your min and max prices by letting Informed.co calculate them for you with this new feature.
For now, this feature is only available for Amazon and eBay listings since Walmart Marketplace doesn’t expose its fee structure via API. Hopefully, that will change in time.
Also note that a manually set min or max price will override a profit-based min/max price.
So, if you set an item to reprice using profit-based min/max and then later decide to set a manual price for that product, Informed.co will set that listing to your manual min or max price and will completely disregard the previously set profit-based min/max setting. If later you decide that you do, in fact, want that item to reprice using profit-based min and max prices, you will need to set profit-based min/max for that listing once again.
Lastly, banded shipping is not supported in Informed.co. So, we highly recommend using a fixed-price shipping method to avoid the possibility of incorrect price revisions.
The most important takeaway is that Informed.co users will now have a super easy option for calculating their min and max prices.
By simply selecting Profit as your choice in the Set Your Min & Max section when you’re creating a repricing strategy and then entering your desired profit amount or percentage, Informed.co will automatically set your lowest and highest price points for any listings attached to the strategy you create.
And that’s a fantastic thing when you realize how much time you’ll be saving — and getting back — which will enable you to work on important tasks for your business that you can’t automate.