Selling on Amazon is more complicated than on other marketplaces. The billing potential is also much higher if you manage to make decisions in a cool way.
On a financial level, I could possibly be on another level right now without making this mistake over and over again, especially these last two years. I sell on Amazon the products I sell because they divert me. This is good and bad.
- It’s good because what for others could be working for me is simply a hobby.
- It’s bad because I don’t make decisions rationally but in many cases emotionally and this is a problem.
The problem I have when setting sales prices on Amazon
You are curious because you are aware of the problem that I have but I still have a hard time eliminating it. It can be summed up like this: I don’t like to undersell products.
“Malvender” is a subjective assessment. I am not happy when something sells quickly and even less so if the price we have set is perceived as low. “Could it have been sold for more?”
Actually that way of thinking is not correct. The metric more relevant than absolute ROI is churn in combination with ROI. It is more interesting to sell again with a lower ROI than to have a higher ROI in the same period of time. Let’s see, in the end it is easy to do the numbers and set the ROIs for a quick sale if the result is superior to waiting a little longer to get a higher profit.
Selling with the same losses is an option
They are those things that you realize and little by little you get the message. I am consulting for large companies with a wide range of products. They may be carrying 40,000 and of these about 1,000 they are carrying them at a loss.
Here capital recovery is held in mind. We right now easily have over 100k invested in products. I have a hard time selling at a loss because in the end everything can be sold at a profit on Amazon. You just have to have a little patience. Sometimes it might make sense to release the product earlier so you can reinvest and rotate more.
That is why rebates have been invented. Here the companies are made of stock by selling in the vast majority of cases at a loss. As a consumer I think that one is not so aware that many times they are selling us products that have had a higher cost than what they are offering us.
The solution – set rules
The solution that we are implementing right now is to set rules.
Until when do we want to sell a product with an ROI of x% before lowering prices?
What is the right time to sell a product on Amazon?
When do you have to withdraw products before you can sell them again?
Etc.
The rules replace the decisions that in many cases are emotional. At least in my case. It is the problem when over time it invites you to be the best customer of your own product. Now it’s time to sell and stop fooling around… 😉
Stay tuned.
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