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    Why It’s Important to Keep Your Amazon Prices Competitive

    Here’s What Makes a Price on Amazon Competitive
    Posted by James Hyatt on February 22, 2023

    Pricing is one of the most overlooked areas in the Amazon industry. Pricing strategy plays a significant role in your battle for Amazon ecommerce dominance. However, devising an Amazon pricing strategy can be overwhelming as it is filled with limitations, guidelines, and variations that can cause confusion for new sellers.

    Today, let’s talk about pricing principles that will help you crack the code to becoming more competitive on Amazon.

     Pricing strategy plays a significant role in your battle for Amazon ecommerce dominance

    Why Is Pricing on Amazon So Important?

    Consumers are becoming more and more savvy to cheap deals on Amazon. Nowadays, to glean any hope of performing well on the platform, you must price your products as competitively as possible, as the right Amazon pricing strategy can reap some substantial rewards. Below are just a few reasons why pricing is so important:

    • It helps you stay competitive. Having the ability to adapt to competitors’ pricing is key to staying on top of them.
    • It attracts customers. Shoppers are always looking for the best deal possible. By offering competitive prices, you can pull in more customers to your listings.
    • It helps you generate revenue. A successful Amazon pricing strategy can help you steadily increase your revenue, which can be reinvested back into your business.

     Two types on Amazon Pricing

    Pricing Types on Amazon

    There are two types of prices on Amazon that sellers must be familiar with, these are the item price and the total price.

    Item price is simply the cost of an individual product. This is the price customers will see while browsing (excluding the shipping costs and any other factors that may affect the final price).

    Total price, or landed price, is the “all-inclusive” price the customer pays at checkout. The following are included in the total price:

    • Shipping and handling charges
    • Discounts, rebates, or special sales/promotions
    • Shipping methods
    • Business practices, such as any reduction or elimination of shipping charges on an order, or of any other order-related fees and expenses
    • Low-price guarantees

    Buy Box: Mastering the Amazon Algorithm

    Within the product detail page, customers will find the “Buy Box,” which provides the quickest and easiest way for a customer to complete their purchase. As the same product can be sold by multiple sellers, these sellers may be able to compete for the Buy Box, and – naturally – Amazon’s algorithm will then decide which seller is the best fit to get the Buy Box.

    Amazon’s algorithm will then decide which seller is the best fit to get the Buy Box

    There are a number of factors that influence getting the buy box, some of which are:

    • Pricing
    • Fulfillment method
    • Refund rate
    • Order defect rate
    • Stock availability
    • Seller response time
    • Shipping time
    • Reviews

    Winning the Buy Box is critical, as most customers buy products directly using the Buy Box without even considering the other offers. And evidently, pricing is one of the key deciding factors that Amazon’s algorithm considers when assigning the Buy Box. (It’s worth noting, however, that while competitive pricing is very important, you can still win the Buy Box at a higher product price if your other metrics are great – but you must still be well-versed with various pricing strategies.)

    Setting Amazon Prices to Win the Buy Box

    Setting and updating prices on your listings can be done using different tactics. Here are some of them:

    Manual pricing

    With this strategy, you’ll be adjusting the products yourself. While doing this offers the most freedom, you will have to closely monitor your listings to ensure that you are offering the best possible price for your products. This method is time consuming and will only work if you have a few products listed, as it also requires you to constantly monitor competitors’ price movements in order to stay ahead of your own adjustments.

    Amazon repricing tools

    There are tools available for purchase that will automatically reprice your items to ensure that you are always winning the buy box. These tools are generally sold as a monthly or annual fee. Amazon also has its own repricing tool called “Automate Pricing.” You can pre-configure rules like maximum and minimum prices, select products that you want, choose the competition you want to track, etc.

    Algorithmic pricing

    With algorithmic pricing, you’ll use a program that will weigh a number of factors to determine the best price for your product. Algorithmic repricing is the most sophisticated form of repricing tool on the market as it uses self-learning algorithms to reprice products. These tools can be expensive and typically only make sense for established sellers with a large inventory on Amazon.

    Amazon Competitive Pricing Strategies

    Here are a few pricing strategies worth trying on Amazon:


    economy pricing strategy means reducing your price to an economically feasible minimum

    The economy pricing strategy means reducing your price to an economically feasible minimum. This generally applies to everyday goods like foods and other consumable items. Such products are cheap to advertise, low in shipping costs, and usually sold in a bunch. Even in cases where it may not always generate the economically feasible minimum, it can still work well to create a subconscious trigger to buy.



    Contrary to the first strategy, the premium strategy means pricing your product highly to create a certain feeling of exclusiveness. With regard to this selling tactic on Amazon, it is suitable for well-known brands offering new products, since they can make initial waves in the market and then sell their items at more affordable prices.

    the premium strategy means pricing your product highly to create a certain feeling of exclusiveness


    This approach can be tricky. It is best suited for products that are planned to be sold in a competitive environment. For this strategy to work, you first have to price your products higher than most sellers, wait until your competitors do the same for their offerings, and then immediately decrease your price to encourage customers to buy from you.


    If you want to be successful on Amazon, you need to hone in on a pricing strategy that works for you. Take the time to study different types of Amazon pricing strategies before making a decision. Don’t box yourself into any one single strategy – what works today may not tomorrow. Also, bear in mind that one tactic may be incredibly effective for one product, but not another. Learn as you go.

    By having a reliable pricing strategy you are well on your way to win the Buy Box, which will boost your organic sales significantly.

    organix sales

    Stay ahead of the curve. Keep up with the most effective pricing strategies and use them to your advantage. Let’s discuss your business goals and how your brand can use adaptive pricing to stay on top – book a call with us today!


    About the Author

    James Hyatt

    James Hyatt is the founder and CEO of Rank N Bank, an Amazon Advertising Agency that prides itself on quick, clear communication, transparent pricing, and industry-leading expertise. He graduated with a degree in Business Management at San Diego State University. A self-made entrepreneur, he has built Rank N Bank with no funding or debt, with the sole purpose to help clients grow their businesses profitably.

    Outside the business sphere, James is passionate about racing sports cars at the well-known Willow Springs Raceway, surfing the famous wave breaks on the East and West coast, and challenging himself out on the mountain trails around the U.S.

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