the 2017 amazon virtual summit: day 2
TRANSCRIPT
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THE 2017
AmazonVIRTUAL SUMMIT
Presented BY:
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AMAZON SUMMIT LOGISTICS
11am PST / 2pm EST EACH DAY
3-DAY EVENT | 2/28, 3/1 & 3/2
ALL 3 DAYS ARE BEING RECORDED & SENT OUT
HAVE A QUESTION? SUBMIT IN CHAT BOX
MORE RESOURCES IN ‘HANDOUTS’ SECTION
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AMAZON SUMMIT LOGISTICS
Maximizing Your Amazon Product Discoverability via Content Optimization
Price Wars: Overtaking Your Competitors On Amazon
Finding More Traffic, Finding More SalesDAY 3
DAY 2
DAY 1
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AGENDA
• Key Buy Box variables
• Busting Buy Box myths
• Defining price wars
• Why price wars occur on Amazon
• Avoiding price wars
• How to handle price wars the smart way
HOW DOES THE BUY BOX ALGORITHM WORK?
THE BUY BOX Key Questions to Consider
• Is your Product Prime Eligible?
• What is your Landed Price?
• Are you exceeding Amazon’s target for Seller performance?
• How fast are your hipping times relative to your customer base?
• Are your products consistently in stock and in quantities that ensure demand will be met?
WHY SELLERS SHOULD CARE ABOUT THE BUY BOX
82% of Amazon website sales today go through the Buy Box, and this number greatly increases with Amazon mobile sales
LOWEST PRICE ALWAYS WINS THE BUY BOX: NOT TRUE
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DOES AMAZON ALWAYS WIN THE BUY BOX?
RULE-BASED VS.
ALGORITHMIC REPRICERS
AMAZON PRICE WARS
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DEFINITION OF PRICE WARS
A commercial competition characterized by the repeated cutting of prices below
those of competitors
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FAMOUS EXAMPLES
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FAMOUS EXAMPLES
VS VS
VS
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WHY PRICE WARS OCCUR
Price wars are becoming more common because managers tend to view a price change as an
easy, quick, and reversible action
AMAZON PRICE WARS
EXAMPLES
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PRICE WARS: EXAMPLE 1Short price war, low impact
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PRICE WARS: EXAMPLE 2Short price war, high impact
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PRICE WARS: EXAMPLE 3Multiple competitors, Multiple methods
AMAZON PRICE WARS: STATISTICS
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PRICE WAR DURATION
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NUMBER OF COMPETITORS IN PRICE WARS
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PERCENTAGE OF FBA AND FBM PRODUCTS
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WHY DO PRICE WARS HAPPEN ON AMAZON?
Rule-based repricing• Competing for the same
product• Lack of understanding
MANAGING PRICE WARS ON AMAZON
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THE PRISONER’S DILEMMA
• You and another person were both arrested for something you did
• Each one is in solitary confinement with no means of communicating with the other
• The prosecutors offer each one of you a bargain. Each prisoner is given the opportunity
either to: betray and testify that the other committed the crime, or to cooperate with the
other by remaining silent.
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THE PRISONER’S DILEMMA
• If both you and the other person remain silent, you each get 1 year in prison
YOU
OTHER PERSON
Silent
Silent 1 year, 1 year
Betray
Betray
5 years, Free
Free , 5 years
• If the other person betray you and you don’t, he goes free and you spend five years in prison
• If you betray and the other person doesn’t, you go free and he spends five years in prison
3 year , 3 year• If both of you betray, each one will get 3 years in prison
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THE AMAZON SELLER’S DILEMMA
• You and another Amazon seller are selling a profitable product
• You have no way to communicate with the other sellers
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THE AMAZON SELLER’S DILEMMA
• If you both cooperate and keep prices high, you each make $10 million in profit
YOU
COMPETITOR
Keep price high
Keep price high
$10M , $10M
Cut price
Cut price
$2M , $13M
$13M , $2M
• If you lower prices and your competitor doesn’t, you make $13 million in profit and your competitor only makes $2 million
• If your competitor lowers prices and you don’t, your competitor makes $13 million and you make $2 million
$5M , $5M• If you both compete and lower prices, you each make $5 million in profit
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HOW TO AVOID PRICE WARS?
1. Be patient
2. Know your competitors
3. Be a market leader
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What is their repricing method?KNOW YOUR COMPETITORS
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How low can they go?KNOW YOUR COMPETITORS
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What goes down must come upKNOW YOUR COMPETITORS
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Day 3 | March 2nd | 11am PST/2pm EST
Finding More Traffic, Finding More SalesTopics Discussed:
• Amazon Marketing Services – The New Frontier
• Optimizing Your Sponsored Product Ads
• Leveraging Other People’s Traffic
• Creating Promotions that Convert
• Live Walk-Through and Open Q&A
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THANK YOU