WINNING PRICING STRATEGIES FOR PRIVATE LABEL SELLERSVictor Rosenman, Feedvisor CEO | January 2016

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HOW DO YOU GROW A SUCCESSFUL BUSINESS

ON AMAZON?

LET’S TAKE THE SCIENTIFIC APPROACH

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.

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Markets always

navigate toward the

equilibriumThe equilibrium point constantly changes in response to

changes in the market demand or supply

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HOW CAN WE APPLY THIS TO THE

AMAZON MARKETPLACE?

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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

Optimizing yourReplenishment Strategy

Winning the Buy Box at the optimal price

Fast Moving Highly Completive Products

Winning Buy Box

at the Optimal PriceThe optimal price is the price point where

your profit is optimized

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Orders

Buy Box

vs Price

Profit

PriceOptimal

Price

Diminishing profits due to

decline in the Buy Box shareMoney on the table

Winning Buy Box

at the Optimal Price

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Orders

Buy Box

vs Price

Profit

PriceOptimal

Price

Diminishing profits due to

decline in the Buy Box shareMoney 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

Fast Moving Highly Completive Products

Optimizing yourReplenishment Strategy

Winning the Buy Box at the optimal price

Optimizing your

Replenishment Strategy

Replenish when the demand is high and your stock is low?

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Buy Box Price - very high

Demand - high

Competition - low

Replenish or Liquidate?

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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

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COMPETITIVE MARKETS

ADVANTAGE

Buy Box reflects market dynamics

DISADVANTAGE

Intense competition erodes profit margins

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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

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IN ABSENCE OF DIRECT COMPETITION

PRIVATE LABEL PRODUCTS NEED TO BE

PRICED ACCORDING TO THE DEMAND

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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

Optimizing your Replenishment Strategy

Building a Demand Model to find the optimal price

Fast Moving Private Label Products

Building Demand Model

to find Optimal Price

The optimal price is the price point where

your profit is optimized

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Building Demand Model

to find Optimal Price

The optimal price is the price point where

your profit is optimized

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COSTS &

INVENTORY DATAORDERS

DATA

Inventory Levels

Cost Structure

Orders

Sale Price History

Building Demand Model

to find Optimal Price

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COSTS &

INVENTORY DATAORDERS

DATA

Inventory Levels

Cost Structure

Orders

Sale Price History

Building Demand Model

to find Optimal Price

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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

Mitigating Stale Inventory Risks

Reviewing Your Product Catalog

Slow Moving Private Label Products

Attracting TrafficBuilding Demand Model to find the

optimal price

FBA Long Storage Fees

Charges from Amazon or other

warehousing companies for

storing unsold stock

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Tied up cash

Cash is tied to stale inventory

instead of being used for other

opportunities

STALE INVENTORY RISKS

Utilizing Demand Model

to control Sales Velocity

Price impacts demand

Velocity (Pace of Sales) can be controlled by changing the

price

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Utilizing Demand Model

to control Sales Velocity

Price impacts demand

Velocity (Pace of Sales) can be controlled by changing the

price

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“Proprietary algorithms that analyze Big Data and translate it into

actions will be the secret sauce of the successful organizations”

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PETER SONDERGAARD, GLOBAL HEAD OF RESEARCH, GARTNER

ALGO-COMMERCE

Market

Pricing

Demand

Competition

GrowthTrends DecisionsAlgorithmsBig Data

Feedvisor launchesALGORITHMIC REPRICING FOR PRIVATE LABEL

PRODUCTS

Visit us at Booth 15 to learn more

THANK YOU