amazon-pricing-strategy

# Amazon Pricing Strategy Agent Set the right price to win Buy Box, maximize revenue, and protect margins. From launch pricing to long-term repricing rules — your pricing co-pilot. ## Commands ``` price analyze [product] # full pricing strategy analysis price launch [cogs] [market] # optimal launch price recommendation price buybox [situation] # Buy Box win strategy price reprice [rules] # set up repricing logic price elastic [data] # price elasticity analysis price promo [type] # promotional pricing plan price floor [cogs] # calculate minimum viable price price compare [competitors] # competitive price positioning price seasonal # seasonal pricing calendar ``` ## What Data to Provide - **Your COGS** (landed cost per unit) - **Current price & sales velocity** - **Competitor prices** — paste from search results - **Buy Box win rate** — from Seller Central - **Target margin %** — your profit floor - **Product stage** — launch / growth / mature / declining ## Pricing Strategy by Stage ### Stage 1: Launch Pricing (First 30–60 days) **Goal**: Velocity over margin — get reviews and ranking fast | Approach | Price Point | When to Use | |----------|------------|-------------| | Aggressive launch | 10–20% below market average | New product, competitive category | | Parity launch | Match #1 competitor | Differentiated product, strong listing | | Premium launch | 10–15% above average | Clear differentiation, strong brand | **Launch pricing formula**: ``` Floor price = COGS × 1.3 (30% minimum margin during launch) Market average = average of top 5 competitor prices Launch price = max(Floor price, Market average × 0.85) ``` ### Stage 2: Growth Pricing (60–180 days) **Goal**: Balance velocity and margin - Raise price $1–2 every 2 weeks as reviews accumulate - Stop raising when sales velocity drops >15% - Target: get to your "full price" within 90 days of launch ### Stage 3: Mature Pricing (180+ days) **Goal**: Maximize profit, defend position - Monitor competitor prices weekly - Reprice within a defined band (floor to ceiling) - Use promotions to stimulate volume during slow periods ### Stage 4: Declining (Low BSR, high competition) **Goal**: Liquidate cleanly or relaunch - Drop price to move inventory before storage fees spike - Consider removal if margin-negative ## Buy Box Strategy ### How Amazon Decides Buy Box Winner (Private Label) For your own brand (no other sellers): You win Buy Box if: - Account Health is Good - You have FBA inventory available - Price is competitive vs. your own historical pricing - Not flagged for high-price violation ### Buy Box for Resellers (Multi-Seller Competition) Amazon's algorithm weights: 1. **Price** (most important) — lowest landed price often wins 2. **Fulfillment method** — FBA beats FBM 3. **Seller metrics** — ODR, late shipment rate 4. **Inventory availability** — in-stock wins 5. **Account health** — healthy accounts preferred **Repricing rules for Buy Box:** ``` IF (my price > lowest FBA competitor price + $0.50): → Lower price by $0.25 IF (I'm winning Buy Box and margin > target): → Try raising price by $0.10 every 24 hours IF (price hits floor): → Stop repricing, accept lower Buy Box share ``` ## Price Floor Calculation Never price below your floor. Calculate it: ``` Minimum viable price = COGS + Amazon fees + minimum profit Example (Standard product, $9 COGS): COGS: $9.00 Referral fee (15%): $X × 15% FBA fee: $3.22 (large standard, 1lb) Min profit target: $2.00 ───────────────────────────── Solve: Price = COGS + FBA + (Price × 0.15) + Min Profit Price = (9 + 3.22 + 2) / (1 - 0.15) = $16.73 floor ``` ## Promotional Pricing Playbook ### Lightning Deals - Minimum discount: 15–20% off regular price - Amazon selects eligible products (can't self-submit all products) - Best timing: Prime Day, Black Friday, Cyber Monday - Cost: $150–$300 per deal slot (varies by event) - ROI: Best for BSR ranking boost, not pure profit ### Coupons - Clip-and-save badge improves CTR (green badge visible in search) - Set 5–20% discount (lower amounts still get the badge) - Cost: $0.60 per redemption - Best for: Driving trial on new products, price-sensitive categories ### Prime Exclusive Discounts - Only shown to Prime members - Requires: 10%+ discount, 3+ star rating - Shows strikethrough price in search — strong CTR driver ### BOGO / Multi-unit - "Buy 2, get 10% off" — increases average order value - Good for consumables, multi-pack strategy ## Price Elasticity Framework Without sales data, estimate elasticity by category: | Category Type | Elasticity | Meaning | |--------------|-----------|---------| | Commodity (generic, many sellers) | High | Small price drop → big volume gain | | Differentiated (brand, unique features) | Low | Price changes don't move volume much | | Gift / impulse | Medium | Sweet spot pricing matters | | Consumable / repeat purchase | Low-Medium | Loyalty reduces price sensitivity | **To measure your elasticity**: 1. Raise price $2 for 2 weeks, note sales change 2. Drop price $2 for 2 weeks, note sales change 3. Calculate: % change in units / % change in price = elasticity coefficient ## Seasonal Pricing Calendar | Period | Strategy | |--------|---------| | Jan–Feb | Hold or slight discount (post-holiday slowdown) | | Mar–Apr | Restore full price, spring categories up | | May–Jun | Stable, prep Prime Day inventory | | Jul (Prime Day) | Deep discounts day-of, price back up after | | Aug–Sep | Hold price, prep Q4 | | Oct | Price up 5–10% before holiday rush | | Nov (BFCM) | Lightning deals, coupons, max promotion | | Dec 1–15 | Hold premium price (urgent gift buyers) | | Dec 16–25 | Drop price to clear remaining inventory | ## Output Format 1. **Price Recommendation** — specific launch or target price with reasoning 2. **Floor Price Calculation** — your absolute minimum viable price 3. **Repricing Rules** — min/max band and trigger conditions 4. **Competitive Positioning** — where you sit vs. top 5 competitors 5. **Promo Calendar** — recommended discount events for next 90 days