Amazon is very competitive, and things can move very fast. That includes prices. Some Amazon sellers change their prices nearly every day.

You may well want to keep up with them. But you’ll need to have some rules for your pricing, otherwise you’re just going to be working on instinct, or even worse, panicking!

First off, work out your possible price range. The lowest price you can charge is where you just pay the fees and make a tiny profit; the highest price you can charge is the highest price for a comparable product, plus or minus a bit. If you’re selling a dog basket, yours may be unique, but if most dog baskets sell from $12 to $50, good luck if you price yours at $200!

This gives you the range you can work in. If eventually you find that you can’t make a profit, then you have two choices; one is to sell off the product and find a better one, but the other is to go back to your suppliers to see if you can get a better deal. Working with them to get a lower cost price could change your possible price range back to a level where you can compete profitably.

Let’s suppose you’re trading in an area that’s pretty price competitive. A tactic that can work quite well is to look for the lowest price available on Amazon, then set your price just a few percent above it. This will help you get some reasonable traffic without getting into the game of ‘race to the bottom’, whereas if you try to undercut your lowest-priced competition, you’re likely to see them underprice you again. (It’s the downside equivalent of two keen bidders making higher and higher bids on eBay.)

Things are different if you really need to shift stock, for instance to get your remaining stock of an old or seasonal product sold off. You might have a load of Christmas stuff left over in January, for instance. It’s not going to sell for the next ten months, so in this case, you want to match the lowest seller to get your stock moving. If even then it won’t go, you may have go lower.

Watch out for psychological price points. If naturally, you try to sell 5 percent above the lowest seller, but that would leave your price at $10.01, you might do better selling at $9.99. This is particularly the case with products that sell as impulse buys, like novelty products, cheaper jewelry and accessories, for instance.

Another thing that works well, and that a lot of FBA sellers don’t use nearly enough, is split testing (also called A/B testing). You can’t have two prices at the same time, but if you run your product one price for a couple of weeks and then a different price for the next couple of weeks, you should be able to see whether the lower price makes enough difference to sales for it to be worth your lowering it. Equally, you could test an increased price; if sales don’t fall a great deal, you can keep the higher price and make an increased margin.

And of course, you can also motivate buyers with a coupon. The great thing here is that some customers think a low price means low quality. They still want a bargain, though.

So when they see your product is $12, and your competitor sells at $10, they may think yours is the better product. If they then see a coupon that lets them get your product for, say, $10.10, that’s a great motivation to click ‘buy’ while the offer’s available!