Pricing Strategy for Launching New Products on Amazon!🚀

What’s your pricing strategy when launching new products this year?

If you’re unclear about how you will exactly do this then read on and it does not matter if you are a new seller or an existing one looking to launch new products.

Doing business on Amazon is difficult. We have come to realize that after spending years with sellers, we understand their problems. One of the biggest ones is pricing, especially when launching new products.

We tried to solve this problem by executing a strategy about 4 months back with a couple of clients who wanted to launch new products on Amazon.

These are some of the results that we were able to achieve for them:

Now these may not be super exceptional results, but they are much better than what we used to get for previous clients with a relatively non-structured strategy.

 So here's the deal:

Identify what your Target price is.  (This is the price you want to stick for a much longer term, where you are highly profitable)

• Start with a big discount in the first week (like 40% - 50% off your Target Price).

• Gradually reduce the discount each week by 5-10% for eight weeks until you reach your target price. (***very important, so you don’t lose the buy-box)

Here is what it looks like.

***Assuming the target price is USD 50.

Now you will experience losses for these 8 weeks, but why does this strategy work?

• Builds Early Momentum:

  Offering a significant discount in the first week grabs attention and encourages early sales, kickstarting your product's momentum.

• Increases Conversion Rates:

  By providing value upfront with discounted prices, you increase the likelihood of converting hesitant buyers into confident purchasers.

• Boosts Organic Rankings:

  Amazon's algorithm rewards products with high sales velocity, and discounted prices in the initial weeks help drive more sales, leading to better organic rankings.

• Maintains Competitiveness:

  Gradually reducing the discount over time allows you to maintain competitiveness without devaluing your product or losing the buy-box to competitors.

But how is this better?

• % of Organic Sales is the KPI for long-term success. In the results we showed, sellers were able to get 70% organic sales in just 3 months which means less ad spends, better TACOS, and more money to be made.

But do not blindly apply this strategy.*

Before executing this strategy do run your numbers and understand exactly how much loss you will incur and, at the target price, how much time it will take for you to recover that investment.

At the end of the day, you don’t want to be a loss-making business on Amazon. I hope this was helpful.

For a more detailed rundown on how you can do this, check out our video going in depth on how this can help you scale up fast.

So who are we?

We are YourSeller, a team of Amazon experts with 6+ years of experience in helping sellers build a sustainable and profitable business on Amazon.

 So if you need help with your product listings or just want to have a conversation about anything Amazon, click here and book yourself a free consultation with our founder.

Worst case, you’ll have someone to share your pain with 🙂

Until next time, happy selling!