Today, I’m going to teach you how to set your Amazon product up for success by finding your product’s price sweet spot during launch.
Then, you can create a promotion that can help you sell more inventory and rank faster on Amazon.
What I will show you today is one of many product launching methods Just One Dime teaches our members in our Amazon FBA Mastery membership, which teaches how to start, launch, build, and grow a successful Amazon store. It comes from the minds of myself, the Just One Dime coaches, and our combined 50+ years experience selling on Amazon.
Launch your product below ideal price.
Before you can successfully launch any type of promotion for your Amazon product, you need to know the standard price that your product will sell at the best.
As you research, manufacture, and prepare your product for launch, you should determine a goal price to eventually sell that product at.
Except when you do launch that product, the price will be lower than your goal sell price. You will aim to eventually sell your product at your ideal price. But not from the outset.
Price is closely associated with value. Customers evaluate products based on what they’re likely to receive versus the amount of money they have to spend. In that case, it stands to reason that if you offer a lower price than you could sell your product for—or a lower price than your competitors’ products sell for—shoppers will assign greater value to your product.
Put another way, if you find a premium leather jacket for $300, you know it’s a quality product—and probably, in fact, worth the $300. However, if you find that exact same jacket for $150 a month later, that jacket now has greater value because you know it’s worth $300. However, you only have to spend $150 in order to add that jacket, and all its associated quality and value, to your closet. In other words, the product’s perceived shopper value increases when you can part with less money to acquire the item.
Amazon shoppers operate the same way.
For example, let’s say you will launch a bamboo bread slicer for $25.
However, your competitors’ products all sell for $30+. Customers will be more likely to purchase your product because it now has greater shopper value. Customers know that the product could go for $30 or more, which means $25—17% less cost than the rest of Amazon’s bamboo bread slicers—is a great deal.
When you do launch your product, you should aim to launch it at a price 10-20% below your ideal sale price.
To get that price, multiply your goal sell price by 0.9 (for 90% of the product’s price, or 10% off) or 0.8 (for 80% of the product’s price, or 20% off). Then, launch your product within that range.
Let’s say you want to sell your bamboo bread slicer for $35.
$35 x 0.9 = $31.50
$35 x 0.8 = $28
You should launch your product between $28 and $31.50.
Get your products noticed by shoppers…and Amazon.
Before you launch your product, write your product listing copy, or perform any type of product/listing setup on Amazon, you should have a plethora of keywords on hand that describe your product. Keywords are words or phrases that shoppers search on Amazon.com to find whatever it is they’re looking to buy.
Keywords can be a single word or term, such as “bread slicer”. Keywords can also be longer, more descriptive, phrases such as “bamboo bread slicer for homemade bread”. And several different keywords can all lead to the same (set of) products.
You can find relevant, high-search volume keywords that describe your product from competitors’ listing titles, autocomplete search suggestions from Amazon.com’s search bar, or even product research software such as Just One Dime’s own Niche Hunter (coming soon!).
As you build out your product listing, you will strategically place your keywords throughout your listing’s copy. This allows your product to appear in search results when a shopper searches one of those, or similar, keywords.
Where your product appears in Amazon’s search results once a shopper searches a relevant keyword is called rank. The higher your product’s ranking, the easier it is for shoppers to find, and thus buy.
When you first launch your product, even with the right keywords and a low price, however, your product will rank poorly. In other words, regardless of what you’ve done right, when your product first launches, it will not appear on the first, second, or even third page of search results until customers start to purchase your product.
In order to get your product ranking, and in front of the right customers, you’ll need to run pay per click advertising (PPC).
PPC operates on a bidding system: You bid dollar amounts for certain keywords you want your product to rank for. Then, when a shopper searches that keyword, depending on your bid for that word compared to competitors’ bids, your product will appear in search results as a sponsored ad.
The higher your bid, the higher your product’s sponsored ad will rank for that keyword. And when a shopper clicks on your sponsored ad, you pay Amazon your bid amount for that click. Essentially, with PPC you gain customer exposure by paying to appear in search results.
With PPC, you pay for each click on your sponsored listing. This means you might spend a lot of money to get in front of the right customers. And, keep in mind that you pay for each click regardless of if that customer buys your product or not.
In fact, a shopper might find your product, click on it (you pay for that click), and ultimately decide to buy from a competitor.
Here is where our pricing strategy—starting low and steadily increasing your product’s price until you find your product’s price sweet spot—comes into play with PPC. By launching your listing below your ideal price, you can increase your click through rate—the percentage of clicks on your listing after it appears in search results. Shoppers will be intrigued by your product if they can compare it to similar models that cost more.
By increasing your click through rate, you’re likely to increase your sales. And both of those metrics clue Amazon’s algorithm into the fact that your listing is a strong result for that keyword. This means that Amazon will in turn present your listing in search results more often, and often higher than it might otherwise. All of which means you can spend less in PPC advertising costs for the exposure you need to get your organic, non-sponsored, listing to rank closer to the top of page one of search results (which is where you want it).
Your product’s lower price tag will influence customers who find it to more quickly make the decision to purchase your product.
Starting with a low price can also help drive top-notch reviews to your product listing. This, in turn, helps your product to rank higher across a broad spectrum of keywords, which helps your sales.
Additionally, if your product is selling in droves at a lower price, that’s a fairly strong indicator that you can increase its price ever so slightly and maintain shopper interest. Just be sure to raise the price only gradually.
Raise your product’s price to find its sweet spot.
If you follow our Amazon FBA training, your product’s launch phase should last for the first two to three weeks after your product has officially gone on sale. You will maintain your original, 10-20% lower-than-ideal price, throughout that time.
After that first two to three week period, you can start to slowly raise your product’s price $1 at a time. As you raise your price, keep a close eye on your click through and conversion rates.
This phase is crucial: It’s where you will determine your product’s exact pricing sweet spot.
Amazon’s algorithm will watch you closely. If your sales numbers start to drop because you’ve increased your price too quickly or above what most customers are willing to pay, your rank will fall off, which will decrease your sales and visibility. You must ensure that your sales are consistent at the new, dollar-increased price before you raise the price another dime.
If all goes well, and sales are maintaining, you will be able to consistently bump your product’s price up $1 every two or three days until you hit your goal price. You might even be able to go a dollar or two above your goal, depending on how shoppers react.
However, if your sales start to drop after you raise the price, you may have reached your price threshold. Alternatively, you may have simply raised the price too quickly.
Either way, by starting lower than you intend to sell your product for and then building, you can find the true sweet spot between the profits you want to see and a steady stream of revenue.
Once you’ve hit your product price’s sweet spot and have established sales history, you can then begin to offer limited time deals such as coupon deals and lightning deals. You can even take advantage of subscribe & save options.
Additionally, once your product is selling well and has secured at least a 3.5 average star rating, you can leverage huge customer visibility through Amazon's Black Friday, Cyber Monday, and Prime Day events. These events consist of the actual holidays themselves as well as week-long, and in some cases multi-week long, celebratory sales. And shoppers flock to Amazon during these periods for limited-time deals, which can drastically increase your visibility, brand awareness, and sales.
While launching your product on Amazon can be challenging and even frightening, it can also be incredibly rewarding and insightful when done well. With the right know-how and a well-thought out strategy, you can leverage your first few weeks on-sale to build a strong arsenal of conversions that will work for you later on.
What I’ve just given you is a brief overview of Just One Dime’s price-launch strategy, one of the many launch strategies we teach in our Amazon FBA Mastery membership. Our membership can show you different ways to launch products on Amazon, run promotions and advertising, and even how to expand your sales across different online channels and regions of the world. Apply to meet and speak with a Just One Dime team member to learn how we can help you achieve your business goals at JOD.com/freedom.
How do you plan to launch your first Amazon product? Let me know in the comments.