Urgency and discounts

If customers know they can always get a discount, they aren’t going to feel particularly motivated to buy right now. They know they can come back tomorrow, or the day after.

For discounts to work, you need to create a sense of urgency. Your potential purchaser needs to feel that if they don’t press the buy button right now this very minute, they’ll miss out.

One way some retailers do it is to email their customers with news of new discounts, letting them get ahead of the queue. Of course, for this to work you’ll have had to build your own email list – not particularly easy if your business is based on Amazon.

You’ll want to get used to copywriting that pushes all the right buttons, with phrases like “ends soon”, “hurry!”, “last chance”, “today only”, or “one time offer”. If you have your own e-commerce website you can add a strong call to action right next to the buy button.

But there are other ways to create urgency, too. You might have a flash sale or a lightning deal. Customers know that this deal will only be available for so long, so even if they don’t buy right now, they’ll likely come back before the end of the day or week. Lightning deals on Amazon, of course, last even less time, so they’ll probably hit the Buy button good and fast.

Preorders at discount prices can also work well to get new products off to a good start. “Order before Tuesday 19th for a special discount” will get buyers thinking about what happens if they wait till the day after…

When a time limit coincides with a special occasion, such as Thanksgiving, Veterans Day, or Black Friday, it’s particularly potent. These are great times to offer Flash Sales, particularly as buyers are often likely to be looking for deals at these times in any case. Of course, you’d want the special occasion to be relevant to your product; discounts on cement mixers, laptops or dehumidifiers probably won’t work their magic for Valentine’s Day.

On the other hand you might set a limit for the number of units available at the special price. One UK retailer uses the slogan “When it’s gone it’s gone”. That can actually be more effective than a time limit, as your buyer doesn’t know how much time they’ve got. Those 100 units might take till tomorrow to sell out, or they might all be gone in ten minutes.

Clearance sales are a particular case in point. Buyers know that you’re clearing out the last inventory, so they know there’s only a limited amount left. Limited-edition products are another way that manufacturers and retailers create scarcity in luxury items. For instance, a limited edition handbag might have just 500 units sold worldwide; the scarcity of the product allows the retailer to keep a high price and still build in the big FOMO factor.

You might also want to add scarcity by only allowing one purchase per customer. This also helps you defend your product against resellers buying it at sales price and then putting it on sale at the original price, making a nice profit margin.

Of course if you use Vipon, you can also get access to buyers who have already proven that they’re really motivated to get discounts. Motivated buyers plus scarcity plus time pressure is a really great way to get your products moving out of the warehouse!

Value Vs Price

Oscar Wilde once said  “A cynic is someone who knows the price of everything and the value of nothing”.

A lot of FBA sellers focus on price. They use automatic repricers, they try to undercut their competition, and they believe price is what’s going to get them sales.

In fact, buyers are looking for value, not price. If someone doesn’t have a cat, they don’t want to buy a cat toy at any price. If they do have a cat, and it only plays with catnip fish toys, they will only buy catnip fish toys. The value lies in the fact that choosy cat will play with it.

They might try other toys, but they feel they’re taking a risk. Choosy cat may not like it. So they’ll want to pay a low price to reflect that risk. If you happened to have a discount offer, they might be tempted.

With fashion goods, buyers might look for one of two different kinds of value. A woman who knows she looks good in black might see an asymmetrical cut black linen dress and instantly see that it’s going to make her look amazing. That’s the value to her. It’s personal. On the other hand a lot of buyers want to be in the trend, or they want to buy a particular designer brand so they can show that they own it. That’s a social value, in some ways.

The interesting fact here is that for some designer brands, sending the message “I’m rich enough to afford it” is part of the value. Of course, someone who’s not quite rich enough to afford it will jump at the chance to buy it in a sale. But if there are too many sales, the original buyers may feel the brand has been devalued; anyone can buy it now, and that exclusive appeal has gone.

Let’s think about another instance of value, the Swiss Army Knife. These are genuinely all-in-one tools which can open beer and wine bottles, fix loose screws, cut and file your nails, whittle or saw through wood, cut wire and get stones out of your horse’s hooves.

Their value is that you have one small tool which isn’t difficult to carry around and which can easily get you out of a fix. And they’re also known to be reliable and high quality. So they sell at a reasonably high price.

But some products that try to do everything just don’t sell. A fridge that’s integrated with your home entertainment system? Would you actually pay extra for that? Back in the old days before the internet, one telecoms company produced a component that could be both a router and a modem. That allowed a network engineer to order inventory without knowing how many of each they’d need, which was convenient.

The trouble was, it cost three times as much as either an ordinary router or an ordinary modem. The concept was great, but the price was way out of kilter. Of course, eventually component prices came down and now we all have little boxes that do both jobs sitting in our homes.

And then there are over-engineered products. For instance, a juicer selling at $400 that had all kinds of intriguing bells and whistles, but was actually slower than juicing your oranges by hand. The price, here, is higher than the value.

So when you’re setting your prices, do some hard thinking about the relationship between your price and the value that the product delivers to the buyer.

Of course, you might then want to offer a discount to give a very special extra value to the buyer or to get a product off to a good start. In which case, Vipon will be happy to help!

Pricing a unique Amazon product

Usually, if you’re an FBA seller, you’ll have plenty of competition. But sometimes, you may end up being the only seller of a particular type of product. For instance, if you get in early on a new health trend in supplements, you might be the only seller. This might not last long, so you want to set a price that will maximize your profits by giving you the best mix of high margins and plenty of sales.

You could just apply a mark-up, and that’s what lots of retailers do. But buyers don’t care how much you paid for the product. They only care about what it does for them. So while you will probably make some profit if you use a regular mark-up, you might not make as much as you could.

You can look at substitute products; that is, products which are not the same as yours but which fulfill the same need. For instance, one local food market has several great take-out stalls. They have burritos, Japanese bento boxes, Chinese fried rice, and just recently a super Ghanaian Afro food stall arrived, selling chicken and peanut stew on jollof rice with a side order of plantain.

Obviously, no one else was selling the same food, and in fact there’s no other African food truck anywhere in town. But most of the other stalls were selling around a four bucks price point for a snack and eight to ten bucks for a proper meal. So a box of fried plantain sells for $4, and the stew sells at $9.50.

The big decision here, though, was whether the customers at that food market were adventurous enough to pay a premium for Ghanaian food, or needed a discounted price to be tempted away from their regular stands. If I’d been in charge I think I might have nuanced things by pricing at $5 and $10.50, and offering a promotional discount for the first few weeks.

You can also look at the value your product delivers. If it saves buyers a hassle, even a low-level hassle like having too many cables around the office, that might justify a relatively high price. If it preserves something expensive – for instance, an acid-free mounting for a work of art or a stopper that can keep a half-empty bottle of champagne nicely bubbly – then it would get a premium for that, too.

Some photographers spend $50 a time on filters that don’t do anything. Does that sound stupid? It isn’t, because the filter goes on to a lens that might be worth $600, so if anything gets scratched or broken, it will be the filter, not the lens. It’s insurance!

Think about how important your product is to your buyer. If it’s a novelty green fingernail decal for Halloween, it’s not really important. If it’s a suit to go to job interviews, it is very important. Importance equals value and means, which you probably guessed, you might succeed with a relatively high price.

Think about how long your product will be a solo product. If you have a new kind of cocktail stick, you’ll probably just have a couple of months and then competitors will have organized their sourcing. If it’s a complex health supplement you might have quite a bit longer. You need to get those sales to make your best profits before the competition get there, so a higher price together with a bigger ad spend might be the best idea.

There’s no easy way to do this. You really do need to think it through. In fact, it’s probably not a bad idea to think through these issues even if you do have competitors.

And of course, if you want to offer a promotional discount, you know where to come: Vipon!

“Excess inventory” and how to deal with it

Amazon’s algorithms are very smart. For instance, they can tell when you buy a luxury pen that you’ll need a refill to go with it. They can guess when you start to advertise your product what keywords will be most appropriate. And they can tell just how much inventory you ought to have in the warehouse.

If you have too much, watch out! Amazon charges you for stock that has been in the warehouse too long without being sold.

First of all you need to check your inventory and sales figures on Seller Central. If sales dropped recently, Amazon may have recalculated how much stock you need based on that lower figure rather than on your usual sales level. If you can already see sales coming back, then it’s likely things will adjust in due course.

However, if you really do have too much stock in the warehouse, there are several things you can do. If the situation looks really bad, and you have somewhere to store stuff, you can take it out of the warehouse, though you’ll still have to pay to get it back.

If sales have been flagging a little and your stock is relatively high, re-marketing is probably your best bet. Take a look at your product page and refresh the photos, improve the keywords, or rewrite the product titles and descriptions so they are punchier and more persuasive.

You might also decide to push your advertising budget up a bit till your sales start shifting your stockpile. Depending on the scale of the problem, just doubling your ad budget for a couple of weeks might be all you need. If your product lacked visibility, that should address the issue.

You could also bundle your excess stock with another product. For instance, if you sell pet stuff and have an excess inventory of dog collars, include a collar with every leash you sell and you’ll soon make inroads on the excess. You’ll be able to charge a little more for each leash, though you might not make the full sales price of the collar as customers will expect the package to sell at a discount to the value of the items if purchased separately.

If you have a really major problem, such as a stock of last-generation mobile phones or last season’s fashionable sandals, then you can use Amazon Outlet to offer deals. You could, as a last resort, use Amazon’s FBA Liquidation to send the inventory to a wholesale liquidator; but in that case you’ll be lucky to get back 10 percent of your intended sales price.

The other fast way to shift inventory, of course, is to use a one-off promotion. Discounts, particularly deep discounts, can get your product moving fast. That will push it back up the sales rankings as well as getting rid of excess inventory. So why not use a short term coupon campaign through Vipon to target discount-hungry buyers and free up a bit of warehouse space?

Amazon Discounts and Customer Expectations

When you’re setting your discount levels for a promotion, obviously you want to check the profit you’ll make at each discount level. There’s no point increasing your sales dramatically if you’re not making any profit.

But another thing you’ll want to bear in mind is how effective a given discount level might be in the market. Will a 10 percent discount, for instance, make your customers sit up and notice, or will they sigh “Just ten percent? That’s not much”?

If you’re in a sector that’s having a tough time, you may see discount stickers all around. In that case, of course, you’re going to have to work harder. If you’re in a boom market, possibly no one’s discounting at all.

We wondered whether simply Googling “Amazon discounts” would be a good way to find out what customers are seeing. It was an interesting exercise, and it gave us several ideas which we’re sharing with you this week.

First of all, it’s worth noting that Amazon doesn’t miss a trick. Amazon.com came top of the search results. Clicking through to Amazon’s discount page showed discounts mainly around 10-15 percent, mixed up with a lot of “Save $$$$” ($2, $10, and in one case, $300) offers.

However, the second thing we found was that the other Google search results showed much more significant discounts. The table below shows how many times each discount level appeared on page one of the search results.

DiscountNumber of times shown

That’s interesting. Google doesn’t show any discounts below 25%, and the area between 25% and 50% is a sweet spot accounting for the vast majority of results. The second page of results showed rather more of the higher (70% and above) discounts, and one 5% discount. So Google obviously thinks people who are looking for discounts are looking for big ones.

Where do those search results refer? In most cases, to a coupon site, or a newspaper. If customers are looking for discounts, this is where Google thinks they’ll want to go – after Amazon itself. (In fact, if they’re looking for big discounts, this is where they’ll want to go first, of course, given the relatively small discounts on Amazon’s discount page.)

So if you want your discount noticed, you’re best off using a coupon site like Vipon, rather than just promoting it on Amazon. (Of course, it’s also an advantage that Vipon is a membership site, full of members who are looking for discounts. Many of them won’t necessarily bother checking Amazon, they’ll come to Vipon first.)

What happens if you look for your own product? “Amazon discount stationery” featured 20%, 25% and 40% off deals. Stationery is a consumable product with usually quite a low price, so we’d guess the discount needed to motivate buyers is relatively low.

“Amazon discount toys” showed 5% and 10%, but also 70% and 80%, giving a very mixed message! It looks as if some toys may be end-of-line, as some toys do date. You might remember crazes like yoyos and cabbage patch dolls; one year’s hot toy is the next year’s fire sale.

On the other hand “Amazon discount beauty” did feature discounts, though without as many numbers being specified, but it was particularly notable for having quite a high proportion of results from fashion and women’s magazines focused on Prime Day discounts.

That’s intriguing. If you’re in beauty products, maybe it’s worth sending out a couple of press releases if you have good Prime Day discounts or a good holiday offer! And obviously, in this sector a Prime Day discount can help you get sales even after it’s ended, if women end up reading the article and seeing your product!

Try out your own product or brand, and see what discounts pop up on the search results page. It’s a great way to see what’s going on, and where Google sends people who are searching for a particular type of product.

What’s happening to the US economy, and what does it mean for FBA sellers?

The world has not had a great few years. First came Covid, with widespread disruption to trade – from lockdown, to a virtual cessation of international travel. Then came the war in Ukraine, together with a huge rise in oil prices that has sparked inflation. And then the Fed put up interest rates to try to stave off inflation.

Remember, we’ve had nearly 20 years of low interest rates and low inflation, so this is pretty disruptive.

The big problem is that the US was technically already in recession in the first six months of 2020. Normally, the Fed would reduce interest rates to kick-start the economy. But instead, it’s had to raise rates to get rid of inflation – despite the fact that this is likely to cause more economic pain.

The stock market is taking a gloomy view, with the S&P 500 index down from 4,796 at the start of the year to 3613 today.  That’s a fall of nearly 25 percent. Cryptocurrencies have nosedived, too – Bitcoin is down more than 60 percent.

However, the US currently has the lowest unemployment rate in five decades. So although everyone’s having to tighten their belts, right now we’re not in Great Depression territory; people have jobs.

Will they continue to spend? The jury’s out on that. A lot of people, though they’re working and not badly paid, are not feeling confident about their ability to get through a major downturn. They already have a lot of debt, with revolving credits like credit cards, home equity lines of credit, and personal loans growing fast. Right now, they’re not taking the scissors to their credit cards, but my guess is the less confident will probably aim to repay as much debt as they can.

Consumer behavior will change. Nielsen research shows the majority of consumers think recession is already here, and they’re shifting their purchases accordingly. They’re shifting their spend to value retailers and brands, and they’re looking for promotions and discounts. And the private label share of the market has increased very markedly in both the US and Canada as consumers buy cheaper, unbranded products.

But retailers are getting smart. They’re making a lot of promotions, but they’re not discounting very deeply. That means they can increase their sales without reducing their margin very much.

To make money out of the market right now, you’ll want to think about repositioning your products.

•            Can you market them as a way to economize, for instance selling products that can help reduce waste or save energy? Reusable and recyclable products can do really well. Or you could move your food containers’ main benefit from keeping the fridge tidy to storing food safely for longer.

•            Can you market your products as a substitute for more expensive brands or products? For instance, prosecco makers did really well in the credit crunch as they marketed their sparkling wine to customers who used to drink champagne!

•            Consumers have become risk-averse. How can you position your products as a ‘safe buy’? You might stress durability, your five-star reviews, your certifications, for instance.

Using promotions has become difficult, though, because of inflation. Consumers are looking for cheaper buys, but if you reduce your everyday price, you’re going to end up losing money.

That’s why you’ll want to be imaginative about your marketing. Hold multiple limited promotions such as coupons and competitions, weekend specials and lightning deals, maybe on Vipon, and you can grab the most price-conscious consumers. But don’t drop your regular price. Leave it to your competitors to do that, and hope it hurts them. In fact, you may end up seeing competitors leaving the market. There’ll be some disruption if they hold a fire sale, but you’ll inherit a bigger market share at your original price if you stick it out.

Matching Your Product Price & Quality

A key marketing concept is that your pricing should reflect the quality of your goods. Think of Hermes with its hand-stitched leather handbags, some of them costing thousands of dollars; a mass production handbag from Walmart obviously doesn’t have the same construction quality or branding. “You get what pay for,” as they say.

But when you’re selling on Amazon, how do you assess the quality of your products against the other sellers? (That is, assuming you don’t have an existing brand like Hermes, Louis Vuitton, Gucci or Dior.)

One way to do it is the way a lot of customers do it; look at the reviews. If you provide a backpack that looks pretty similar to two or three others, and it’s the same size, but your reviews are five-star and the other guys only get three or four stars, you can charge a higher price because customers are clearly saying it’s higher quality.

Since social proof such as customer reviews are the most influential factor on potential buyers’ assessment of whether or not to buy, this is quite a reliable way to look at your products.

Another way to do it is to look at whether your product provides more features. For instance, if you sell a camera with a bigger zoom than the competition, more megapixels, and so on, you can charge a higher price. (Though of course in marketing terms you should really be looking at the benefits to the customer – better and clearer photos, in this case.)

You can do some quite detailed assessment of competitors’ products just by looking at their Amazon product pages. But in some cases it might be worth buying the product to carry out a more detailed comparison.

There’s a twist to “You get what you pay for,” though, which is that people often tend to assume that a low price indicates a low quality product, or even a counterfeit (in the case of Louis Vuitton luggage or Hermes handbags). That’s a problem if you have good quality but you want to reduce the price to increase sales or to launch a new product.

The answer to that is to keep your headline price the same, but use discounts, coupons, two-for-one offers, or loyalty offers to give your customers a break. You’re presenting the discount as a gift, and you might want to limit in some way – to customers who have already bought from you, to regular customers, to customers who can collect a certain number of point or coupons, or to a single sale week. The more limited, the more special the gift is; a two-for-one in the supermarket is kind of boring, a “first five customers for the new Tesla pay nothing” promotion would make the headlines! (And, as you can imagine, it wouldn’t reduce the value of Teslas at all, because no one would believe that zero was the ‘real’ price.)

Many things in economics are quite rational. Prices aren’t. People actually believe that there’s a ‘right price’ somewhere – in the Middle Age it was believed that the ‘right’ price actually existed as part of the natural order. It can be interesting to ask people what they think is the price for a quart of milk, a gallon of petrol, a Manhattan apartment; chances are they will have a price in mind. It might not relate to the real world. Many of remember how much a Hershey bar cost when we were young, and for some people that’s half a century ago!

So remember that the price/quality equation for your products isn’t just about facts, or what the customer actually pays; it’s psychological, too. That’s why you need to give it real thought!

A few things you didn’t know about Amazon

Most of the time as FBA sellers we’re focused on stuff like best seller ratings, review rankings, organic keyword rank, profit margins, sourcing, and running ad campaigns. Serious stuff. But sometimes, you need to relax. So this week, things you didn’t know about Amazon and didn’t like to ask.

How did Amazon get its name?

Jeff Bezos chose the name first of all because he wanted a name beginning with the first letter of the alphabet, A. (If you’ve ever seen ads for AAAAA Plumber or AA Taxis you’ll know he’s not the only one.) In fact, he’d originally called it Cadabra but incorporated as Amazon. The name also reflects his strategy to “get big fast”, since the Amazon is the longest river in the world.

What price was Amazon IPO’d at?

Amazon’s IPO – the introduction of its shares to the NASDAQ exchange – took place on May 15th, 1997. The shares cost $18.

However, the stock has been subdivided four times since then. If you held one share, you’d now have 240. So that means the effective price paid at the IPO for each of today’s shares was just 7.5 cents.

Just for reference, the shares now trade at $114 and they have traded as high as $188!

Is Amazon just a retailer?

No, it also has a huge business providing cloud computing services that are used by companies such as Lyft, Netflix, and AirBNB. It’s a business that has grown fast and is very profitable for Amazon.

How many dogs are there at Amazon?

We’re not joking. Right from the start employees have taken their animal companions in to work, and there are now an estimated 5,000 dogs at the Seattle campus. There’s even an Amazon page devoted to them at https://www.aboutamazon.com/news/workplace/how-much-does-amazon-love-dogs-just-ask-one-of-the-7-000-pups-that-work-here.

However, the dogs are way outnumbered by an estimated 200,000 mobile robots that work at Amazon worldwide.

What other companies does Amazon own?

You might think Whole Foods is a separate company. It isn’t; Amazon bought it in 2017. GoodReads looks like it has nothing to do with Amazon – but Amazon owns it. Amazon also owns Twitch, Audible, Kuiper satellite internet, AbeBooks, film site IMDb, PillPack, and Woot.

How long is Amazon Prime Day?

Trick question! It’s now 48 hours.

How long did it take the original Kindle to sell out?

Kindle, Amazon’s proprietary e-book reading device, came to the market in November 2007. It sold out within five and a half hours.

What year did Kindle e-books first outsell printed books?

A lot of people consider this was the end of the print-and-paper age and the beginning of the electronic age. And it was as long ago as 2009.

Is Amazon a tourist destination?

Yes! 23 of its North American warehouses open for guided visits which last around an hour. It’s well worth making the detour to see these state-of-the-art logistics facilities, though the kids would probably prefer Disneyland.

Who is Danbo?

Danbo is just an Amazon branded cardboard box – ‘danbo’ is Japanese for corrugated cardboard. But in Japan, the Amazon box has become a manga (comics) character and achieved amazing popularity, with action figures and even electronic gadgets designed in his honor.

What are The Spheres?

The Spheres are a set of spaces filled with plants from all over the world, where employees at Amazon HQ can go to chill out and feel connected with nature.

Where did Amazon hold its first business meetings?

Ironically, in the very early days Jeff Bezos, his then wife Mackenzie and his first employees held meetings in a local Barnes & Noble bookstore. Ironically, because Barnes & Noble had no idea they were playing host to a future competitor!

What was the first book sold by Amazon?

Douglas Hofstadter’s Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. Quite a mouthful!

We hope you’ve enjoyed this week’s blog. Back to usual with some solid business advice next week!

Price elasticity: what it is and why it matters

Price is super important for your Amazon products. If your price is too high, you might not make any sales on Amazon. If you price is too low, you might not make any profit. Price elasticity is a basic economic concept that has a lot of meaning for marketers. It measures how a given product will respond to changes in price; some products are very responsive to price changes, while others are not.

Naturally, as the price rises, demand will fall. If the price is dropped, demand will increase. But some types of product only see a small change in demand, while others see a much bigger change. A very price-elastic product is one where a small discount will result in a big jump in demand; a very price-inelastic product is one where demand is hardly affected by the price. For instance, domestic water consumption is usually price-inelastic; we have to drink, wash clothes, shower and brush our teeth, and the price of the water supply doesn’t come into the equation.

Many consumer goods are price-elastic. For instance, if you sell small toys, novelty products, or kitchen consumables, you’ll probably find your product is price-elastic. Moving the price can result in quite large changes in sales. A price-elastic product can really benefit from a discounting or coupon campaign.

Now, an economist can actually produce a price-elasticity ratio which shows exactly how a product will respond to price changes. But you don’t need to do that to have a good idea of how price-elastic your products are.

Generally, a product will tend to be a bit less price-elastic if other factors are relatively more important. For instance:

•            safety – in the case of products intended for children;

•            high quality – in the case of products intended for professional users or connoisseurs;

•            durability – in the case of footwear, for instance, or machinery.

Think about setting up an artisan bakery. When would you trade price for one of these other factors? You would probably be quite aggressive to get the best price on paper bags and packaging, but you would want a durable bread oven that will last you ten or twenty years, and you might pay a bit more for a reputable brand. And you’d probably want high quality ingredients, so while you would shop around for your flour, you wouldn’t necessarily buy the cheapest.

So one way to make your goods less vulnerable to competitors pushing prices down is to play up safety, quality, and durability as factors.

There’s another important reason you should know how price-elastic your products are. If your goods are price-inelastic, you shouldn’t really think about discounting. You will be giving money away, and you won’t get much of a boost in sales. On the other hand, if your goods are price-elastic, offering discounts is a great way to get your inventory moving out the door, and you’ll probably make more money even though you’re selling at a lower price.

Discounting on Vipon could be a smart move for price-elastic products. The more price-elastic the product, the better the return will be. (You might also want to think about focusing your discounts on the time of year they can really grab you seasonal business, such as back-to-school discounts on stationery and backpacks.) And if you use Vipon, you know that you’re accessing a customer base which is very price-focused, too.

By the way, there’s a particularly weird kind of product called a Veblen good. Performance cars, haute couture and multiple Michelin starred restaurants probably fit this description. A Veblen good isn’t just price inelastic, demand will increase if the price goes up, because people think it’s even more important to be seen with this brand!

Watching your Amazon competitors’ deals  

If you’re an active FBA seller, you’re going to want to watch what your competitors are doing.

For instance, if they’re running a big discount offer, you need to know about it. That’s something that could affect your sales significantly. If they’re suddenly splurging on pay per click ads, you’ll want to know about that too.

So you’ll want to bookmark their product pages for a start. You’ll probably want to automate some of your task; most good FBA software has the ability to track products and Amazon sales ranks. You may find that some competitors always run the same kind of deals, for instance doing one Lightning Deal a month, or always offering the same level of discount when they have a promotion.

Make a note of when they ran a major promotion and see whether it took a chunk out of your sales on Amazon. If that particular competitor is taking sales away from other people, but not from you, then you don’t need to try to match their promotional price.

If you do want to counter their promotions, then do it with a rebate or a coupon, rather than by cutting your product price. That makes it easy to restate your base price later.

Never do the same thing that they’re doing. Find another way to counter their price cuts. For instance, if they are using coupons, you should look at the value gap, then think of different ways to fill it. You could use a multipack or a bundle promotion to make their single-item promotion look less exciting, for instance.

You might also respond by stressing non-price factors. For instance, if your competitor’s shampoo isn’t hypoallergenic, then when they’re having a promotion, make sure your marketing, web banner, infographics, and so on stress that your shampoo won’t set off people’s allergies.

Go a little further and look at what keywords your competitors are targeting, too. Do you have more, or different, keywords? How do they rank against you? Do they have keywords you haven’t thought of? You can always try to out-think them by going a step further towards ‘long tail’ keywords. If they have ‘allergy free shampoo’ you could have ‘allergy free natural shampoo’ or ‘organic allergy free shampoo’, and so on.

Use Google Alerts (which is free) to monitor what your competitors are doing and what kind of reviews and publicity they’re getting. It can be a good idea to track your own brand too; if you’re getting bad press you want to know about it, and if you’re getting good press, you’ll want to find a way to leverage it.

Remember also to keep an eye on whether new competitors are entering the sector, or old ones are quitting. This isn’t something that you’ll need to act on in the short term, but if you see a lot of competitors quitting the sector, it usually means it’s not profitable enough for them. If you’re the sector leader by a long way and you have keen prices and a great supplier, you might just happen to ‘own’ the market, in which case this is good news. You may even be able to put your price up a bit as there’s less competition for customers’ dollars. But if you’re one of twenty competitors all around the same size and the product isn’t super-profitable for you, it could mean you’ll need to think hard about your business viability in the long term. It would certainly suggest you shouldn’t match rivals’ discounts or coupon offers, as they may only be discounting to sell off their remaining stock. From your point of view, the sooner they’re gone, the better!