2016 Amazon Virtual Summit: Feedvisor
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The document discusses strategies for private label sellers on Amazon, emphasizing the importance of market equilibrium and optimal pricing to balance supply and demand. It outlines four market states and the necessity of optimizing replenishment strategies based on competition and sales velocity. Additionally, it highlights the need to manage inventory effectively to mitigate risks associated with stale products and maximize profits.
2016 Amazon Virtual Summit: Feedvisor
- 1. WINNING PRICING STRATEGIES FOR PRIVATE LABEL SELLERS Peter Kearns, Director Customer Success, West Coast | March 16, 2016
- 2. 2 HOW DO YOU GROW A SUCCESSFUL BUSINESS ON AMAZON? LET’S TAKE THE SCIENTIFIC APPROACH
- 3. Market Equilibrium A 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. 3
- 4. Markets always navigate toward the equilibrium The equilibrium point constantly changes in response to changes in the market demand or supply 4
- 5. HOW CAN WE APPLY THIS TO THE AMAZON MARKETPLACE?
- 6. 6 THE 4 STATES OF THE MARKET Slow moving highly competitive products Fast moving highly competitive products Slow moving private label products Fast moving private label products Your sales velocity Competition
- 7. Optimizing your Replenishment Strategy Winning the Buy Box at the optimal price Fast Moving Highly Completive Products
- 8. Winning Buy Box at the Optimal Price The optimal price is the price point where your profit is optimized 8 Orders Buy Box vs Price Profit Price Optimal Price Diminishing profits due to decline in the Buy Box share Money on the table
- 9. Winning Buy Box at the Optimal Price 9 Orders Buy Box vs Price Profit Price Optimal Price 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
- 10. Optimizing your Replenishment Strategy Replenish when the demand is high and your stock is low? 10 Buy Box Price - very high Demand - high Competition - low Replenish or Liquidate? 10
- 11. 11 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 11
- 12. 12 COMPETITIVE MARKETS ADVANTAGE Buy Box reflects market dynamics DISADVANTAGE Intense competition erodes profit margins
- 13. 13 THE 4 STATES OF THE MARKET Slow moving highly competitive products Fast moving highly competitive products Slow moving private label products Fast moving private label products Slow moving highly competitive products Slow moving private label products Your sales velocity Competition
- 14. 1 4 IN ABSENCE OF DIRECT COMPETITION PRIVATE LABEL PRODUCTS NEED TO BE PRICED ACCORDING TO THE DEMAND
- 15. 15 THE 4 STATES OF THE MARKET Slow moving highly competitive products Fast moving highly competitive products Slow moving private label products Fast moving private label products Slow moving highly competitive products Slow moving private label products Your sales velocity Competition
- 16. Optimizing your Replenishment Strategy Building a Demand Model to find the optimal price Fast Moving Private Label Products
- 17. Building Demand Model to find Optimal Price The optimal price is the price point where your profit is optimized 17
- 18. 1818 Building Demand Model to find Optimal Price The optimal price is the price point where your profit is optimized
- 19. 19 COSTS & INVENTORY DATA ORDERS DATA Inventory Levels Cost Structure Orders Sale Price History Building Demand Model to find Optimal Price
- 20. 20 COSTS & INVENTORY DATA ORDERS DATA Inventory Levels Cost Structure Orders Sale Price History Building Demand Model to find Optimal Price
- 21. 21 THE 4 STATES OF THE MARKET Slow moving highly competitive products Fast moving highly competitive products Slow moving private label products Fast moving private label products Your sales velocity Competition
- 22. Mitigating Stale Inventory Risks Reviewing Your Product Catalog Slow Moving Private Label Products Attracting TrafficBuilding Demand Model to find the optimal price
- 23. FBA Long Storage Fees Charges from Amazon or other warehousing companies for storing unsold stock 23 Tied up cash Cash is tied to stale inventory instead of being used for other opportunities STALE INVENTORY RISKS
- 24. Utilizing Demand Model to control Sales Velocity Price impacts demand Velocity (Pace of Sales) can be controlled by changing the price 24
- 25. 25 Utilizing Demand Model to control Sales Velocity Price impacts demand Velocity (Pace of Sales) can be controlled by changing the price
- 27. 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
- 28. THANK YOU