Pricing books on Amazon: Is it possible to stay one step ahead of the competition?

By Sharon Fussell, August 25, 2011

One issue brought up time and time again by my readers is the pricing of books on Amazon, particularly given the frankly ridiculous price points used by some competitors.

If you were wondering exactly how it is that so many books come to be priced so low you may be interested to know that some sellers are actually using software which monitors competitor prices 24 hours a day: the moment a competitor undercuts them, their own price will go down automatically to undercut the competitor.

But why has pricing books on Amazon become such a contentious subject?

As you may know, a merchant seller can only price a book at a minimum of £2.81, which equates to 1p plus postage credit of £2.80. An FBA seller, however, can price as low as they wish.

Now, that’s fine, but wouldn’t you think they would be interested in making some sort of profit from their transactions?

As it stands many FBA sellers are not just giving their books away, the transaction is actually costing them money because the postage costs and Amazon fees amount to much more than any profit they could possibly make!

Much of this silliness is due to fancy software automatically reducing prices. I can only presume sellers are happy for this to happen in the belief that buyers will only buy the lowest priced item and if their item is priced at the lowest price then they will sell their books before any competitors.

As far as I can see this is a myth. Yes, I am sure that some buyers will choose the first and cheapest copy on the list, but (luckily for me) not all do so.

For example take these recent sales:

This item is available from an FBA seller priced at £1.12, I just sold my copy for £2.75: Want to Play? [Paperback], P. J. Tracy (Author)

Or how about this title:

• Shiny Pennies and Grubby Pinafores: How We Overcame Hardship to Raise a Happy Family in the 1950s [Paperback], Winifred Foley (Author) Used – Good

Lowest FBA price: £1.32
My price: £2.80

Personally I want to make a profit selling my books on Amazon, which is why I very rarely price books at less than £2.80 (although do please note that some of my older copies, listed before the 5p postage credit increase for merchant sellers, are priced at £2.75 -1p below the old merchant selling minimum of £2.76).

Insider Tips…Pricing for Profit

1) To ensure my copy remains on the first selling page I always list my low value popular fiction/non fiction books at £2.80 – this is 1p below the current merchant sellers minimum price – which means that no matter how many copies are listed on the system I am only subject to competition from other FBA sellers selling a copy of the same book.

2) When I am listing I always research other prices of the copy sharing the same ISBN. This is very simple to do; just conduct a normal Amazon search for the ISBN, click on the link showing used and new items for sale and scroll down the first selling page.

I usually pitch my price midway between the highest and the lowest price offered. My philosophy is to try and get a balance between selling for a healthy profit and selling my item as quickly as possible.

The following examples demonstrate that buyers do not always go for the lowest price available, in fact you will see that in some cases buyers have been prepared to pay a much higher premium:

The Demon in the Freezer: The Terrifying Truth About the Threat from Bioterrorism [Hardcover]
Richard Preston (Author) 11 used & new from £0.01(£2.81 including P&P)
My price £6.99

Best Book of Greek Cookery [Paperback]
Chrissa Paradissis (Author) 15 used & new from £3.22 (£5.83 including P&P)
My price £15.99

Tuesdays with Morrie: An Old Man, a Young Man and Life’s Greatest Lesson [Paperback]
Mitch Albom (Author) 105 used & new from £0.01 (£2.81 including P&P)
My price £4.00

So remember, when listing a product on Amazon, you really should be aiming to get the best possible profit, not the lowest price in the list!