Greedy Seller
Fellow sellers, I'm seeking some advice on a frustrating situation I've encountered with another seller undercutting repeatedly.
I initially found a product with great profit margins over 100% ROI and there is about 10-15 sellers. I matched the current Buy Box price and sales were going well for about a month. Then yesterday, another seller started hugging the Buy Box, going just 1p below the current buy box.
It's evident they are using a repricing tool to constantly undercut the lowest price by 1p in order to solely maintain the Buy Box themselves. While I understand the motivation to capture all the Buy Box sales, it's exasperating when sellers configure repricers so aggressively just to box others out.
This particular seller has over 200 seller feedbacks, so they are an experienced seller who surely understands pricing strategies. As a result of their relentless undercutting, my potential ROI on this product has plummeted from over 100% down to only 5-10%.
I've now sold out of my inventory for this item. My question for everyone reading is would you continue sourcing more of this product knowing you'll likely just enter another Buy Box battle? Or would you cut your losses and move on to other products?
I'm all for healthy price competition, but it feels unethical when sellers setup repricers to continuously undercut by the smallest increments just to own the Buy Box. I wish we could agree as a seller community to share the Buy Box rather than trying to monopolize it. But I realize that's unlikely to happen.
Any thoughts or advice on how to approach this type of situation would be appreciated.
Here's to better seller karma for all of us.
Seller_MT8rt0A2OpbCx
Seller_UVeFCZoAA4mkx
Unfortunately, that is illegal.
It is up to you what strategy you take and what margin is acceptable. You could move on to a different product, monitor the original product and come back to it later, continue to sell the product, whist trying to compete and making a negligible profit until the other seller (or you) goes bust or gives up on that product, or continue at a reasonable price, taking a small proportion of the Buy Box when the other sellers run out of stock, but making a profit on those sales.
Seller_d8YGbIjNqwFxn
Look at this in a different way. This seller has probably been on the listing longer than you and realises the item is a good seller. They may have invested heavily in the item and brought a lot of units.
They may find it acceptable to sell the item at a reduced margin in order to get sales and create some profit.
There are many aspects to an Amazon business. Mostly profit is important, but businesses can fail if they don't have sufficient turnover so sometimes sales at a reduced margin is beneficial.
They may also have brought the item cheaper than you and/or have cheaper postage costs. They may have a higher margin and are able to drop their price when a competitor undercuts them.
With pricing sometimes you find you get a fair share of the buy box even if you are slightly more expensive. If you can ship faster than your competitor you have a better chance of winning the buy box even with a slightly higher price.
Seller_GK5kQEXpZI6fr
Nobody 'owns' the buy box, you always share the buy box with other sellers. There used to be a metric in SKU central where it told you your % share of the buy box but Amazon in all it's wisdom have removed it.
Seller_UVeFCZoAA4mkx
Seller_DfMOm9tgJKAex
welcome to selling.. in general!!
Seller_sSxf9ltVoIMz9
Find a product lets say a 'Brick' trademark your name 'Greedy Seller' and then register your trademark with Amazon. Then create a listing selling 'Greedy Seller Bricks' and voila, no one else can list against you. Oh and btw also spend around two years trying to get your product up the listing ranks by advertising. Sound difficult, well here's the thing, if you are selling someone else's product, lets for example say Colgate toothpaste, then 15 others will, they will all drive to the lowest price and there will be no money in it. IF THERE WAS MONEY IN IT, I guarantee you a seller like me would step in, buy £50,000 pounds worth at a better price, undercut you, and put you out of business. Welcome to Amazon.
Seller_Fg2fqaWOnEtha
That's selling for you. Personally I'd rather focus on products that might sell less but have less competition. If a new seller arrives and sell them for a lot less, I let them do it (unless I want to get rid of the products) and keep my ideal price. Soon or later they will go. If they stay, well I move on, there are lots of products in the sea.
If I take into account the returns, the packaging, the missing orders, the labour involved etc I'd rather have 100 products that sell 5 times a week each with a good margin rather than have one product that sells 80 times a day for 20p margin.
Seller_fJSqU58yCey9E
Its called business , this is the way that Amazon buy box system works, to give the customer the best possible price. if a seller keeps undercutting you let him have buy box and just wait until he runs out of stock
. otherwise it becomes a race to the bottom , and you end up making no profit , in situations like this you need concentrate on finding more products with better margins . and forget the race to the bottom .
Seller_soBD2wwhsVOww
Just need look at your margin & not worry about what other sellers are doing.For me,25% is minimum I know many sellers run at a margin way lower there's lots of busy fools on here. I currently average 35-40% daily/monthly.If any sku drops below 25% I just dump it & move on
Seller_AbtPA7PB0OrTf
Called price fixing. A good trick is to drop you price really low and get them to sell all the items at a super low price till they stock out.
Seller_O8uJKvMnYDGVw
In one of our categories, we have a seller with almost the same item and sells at half our price, I'm in a position where I could sell at half his price and still make a profit, but I keep my original price and don't bother with under-cutting them, why give your self the hassle. he might sell 10 to my 1 but my 1 makes the profit of his 10, simple.
