How to Set up Costs for Your Products in AI Repricing?

Setting up your first AI repricing rule is a breeze, largely thanks to BQool’s intuitive AI Repricer. But behind every successful repricing strategy, there are carefully calculated costs that dictate the price floor and ceiling for every product sold on Amazon. By meticulously setting up your minimum and maximum prices, you will be able to control your prices efficiently and compete against other offers effectively.

Taking this key initial step allows you to confidently scale your business with flexible pricing strategies while avoiding common pricing pitfalls like Amazon potential high pricing error. In this quick guide, you will learn how to decide your Min and Max Price and choose the appropriate AI repricing strategy to keep prices competitive with ease so that you can start making profit from the sales you make with BQool AI repricer.

Appropriate Floor/Ceiling Prices: Min & Max Tips

Let’s say you want to resell a laptop that costs $500. It would not make sense to set the maximum price at $1500 because that would be too expensive. Instead, your prices should reflect what the laptop is worth in the market.

Setting up floor and ceiling price is an art as price strategy can make or break the effectiveness of your repricer. This is why we advocate paying full attention to min and max price setup when building your repricing strategy. It is essential to set reasonable values that are neither too high nor too low for your floor and ceiling price to maximize the effectiveness of the repricer.

BQool suggests sellers who aren’t familiar with setting up their min and max price should initially take the 10 to 30 Percent Rule: Min should be above the cost of the product at least by 10%, Max should be above the cost of the product at most by 30%. Adhering to such a measure could ensure a smooth min and max setup without triggering the potential low or high pricing error. Here are the two product examples with the cost exceeding 100 USD:

Mishimoto MMRAD-F2D-99 Performance Aluminum Radiator

Cost $620
Min $715.00 (Cost + 15.3%) & Max $775.00 (Cost + 25%)

https://www.amazon.com/gp/product/B00860G0MS

 

Whiteline W82047E Front Radius/Strut Rod to Chassis Bushing

https://www.amazon.com/gp/product/B0070I9FK6

Cost $100.00
Min $119 (Cost + 19%) & Max $125 (Cost + 25%)

 

If you happen to sell low-cost products with high profit margins, you can step away from the 10 to 30 Percent Rules. And increase your min and max price to 50 to 80 Percent if the prices can reflect the market demands. Usually, this strategy applies to products that are low prices, because the lower the cost value is, the higher the increase by percentage for min and max would be.

 

Here is a product example with a cost being under $100 USD:

Kodak Gold 200 Color Negative Film (ISO 200) 35mm 36-Exposures

Cost $9.50

Min $15.00 (Cost + 57.89%) & Max $17.00 (Cost + 78.95%)

https://www.amazon.com/gp/product/B000JLI0K2

What are the Risks of Setting a very high Max Price?

It is crucial to avoid the pitfall of setting an excessively high maximum price. This erroneous method not only affects your repricing strategy, but also puts your Amazon seller account at risk. Indeed, Amazon may delist your items if you have set up an unrealistically high maximum price.

We can’t stress enough the importance for anyone to understand the value of the items they are selling. This is why if you are unsure about how to determine your minimum or maximum price, we recommend calculating them to be between 10 and 30% of your cost.

ALERT!!!

We strongly advise against repricing at your maximum price if your max price is abnormally high like cost + 200%. Avoid potential high pricing errors for your own peace of mind.

 

 

 

Set Up AI Repricing Strategy with Profit in Mind

 

We recommend the AI Equalizer for new users of BQool AI repricer to reprice their listings. The AI Equalizer provides an optimal balance between sales volume and profit margins. Rather than an overly aggressive ruleset, it offers flexibility to scale pricing as needed.

How to configure AI Repricing Strategy that considers your costs?

When you are setting up your AI repricing rule you need to pay close attention to the three steps that we have highlighted in yellow:

 

1.When you are the only seller

Even if you are the only seller on a listing, you can take this opportunity to maximize your profit. We recommend you choose to customize your price and choose your min price then input a percentage rather than a dollar amount. This will allow your price to scale up or down with the market. You will also avoid getting potential high pricing error if you reprice to your max price that is deemed too high by Amazon.

2. When the Buy Box is suppressed

This is a very crucial step, since you are still selling your products even if the buy box has been suppressed! If you are an FBA seller, you need to aim to compete against FBA offers because in the absence of the buy box, shoppers are willing to pay extra to buy from FBA sellers who are eligible for prime shipping.

When you want to configure this step, we recommend you choose “lowest price” if you are a FBA seller. The repricer will reprice against the lowest FBA offer only.

3. When your product is backordered

When you configure your repricing rule with AI you need to look at this setting too. This is the type of situation where you might want to increase your prices when your products are out of stock. We suggest you input a value such as Max price minus 10% for example:

The way you will set up this part will depend on your inventory lead time. In the case you have planned very well and replenished your inventory on time, then you should be able to compete in a most competitive way like competing against the buy box price.

 

 

 

When you want to reprice your listings on Amazon and use a repricer, you need to set reasonable minimums and maximums that reflect your product’s value to ensure long-term profitability and account health. Once you have successfully set up this step, you can quickly implement BQool’s AI rules for balanced strategies and adjust pricing bands strategically to maintain a competitive edge.

 

 

 

 

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Pauline Thoméré

February 23, 2024
Pauline's passions lie in eCommerce and supporting individuals in their online selling endeavors. Currently, as a frequent contributor to the BQool Blog, she channels her passions into creating informative contents that break down the complex challenges Amazon sellers face on a daily basis.

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