Possibly the biggest repricing question of all goes like this:
“How do you deal with aggressive underpricers?”
Let’s say you reprice a book, and 10 seconds later you notice you’ve been underpriced by a penny (this happens, a lot). Then you drop your price again. And in seconds or minutes, you’re underpriced – again.
Most sellers respond to every act of underpricing by underpricing right back, letting the underpricer drag them into a pricing war, as every competing seller leapfrogs their price downwards. It's a game that no one wins.
You probably guessed it: At NeuroPrice, we don’t recommend trying to beat aggressive underpricers at their own game. Here’s a few reasons this is bad repricing strategy:
1. Every action triggers a reaction: Aggressive underpricers will always respond to your underpricing by underpricing you back. Forcing you to respond, in a downward spiral straight to the bottom. Which brings us to…
2. Underpricing triggers a race to the bottom. Whether sellers are underpricing each other by 50 cents or 1 cent, it still forces products into unprofitability fast. And the whole thing could have been avoided if each seller had just waited their turn for a sale instead of underpricing.
Bottom line: Playing the game of aggressive underpricers = more work, less money.
Then how should you respond?
Instead of frantically trying to be the lowest price at all times, we recommend focusing on being competitive (they are not the same).
For example, it’s a myth that the Buy Box always goes to the lowest price item. The Buy Box frequently goes to an offer that isn’t even close to the cheapest price.
Likewise, it’s a myth that customers always choose the cheapest option. Especially when the price difference is just pennies.
Keeping prices competitive means not letting them stray too far from a price that a customer will pay, given the current landscape.
I may address this more in depth in a future email, but a simple recommendation is to reprice once a day.
As covered there is such a thing as repricing too often, and its just as true that there’s such a thing as repricing too little.
The best revenge against underpricers is indifference, and not letting them drag you into their toxic game.
Video: How To Deal With Underpricers
-Peter Valley & Team Neuro
PS: I have a video about this exact subject here.