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ASM Module 5: Product Pricing

for Profit

In this lesson, you will learn how pricing works on Amazon, and

you will select the ideal base price point for your product to

help ensure that you get the most profit.

This Lesson Covers:

1. Premium Price

2. Recommended Price Option

3. Alternate Price Option

4. Launching Price

5. Pricing Phases

6. The Price Is Right

1. Premium Price

There are a multitude of ways to decide on the price of a product. This lesson

recommends to specific ways to begin with.

Keep in mind that it is very easy to change your prices in Seller Central, so do

not feel that the price you choose now is final—you can always update it later.

A lower selling price doesn’t guarantee more sales

, and it

definitely

doesn’t

mean more profit. Instead, consider setting a

premium price

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Since you are following the ASM model, you are selling a high-quality

product—and that means that you can sell your product at the higher end of

the market!

2. Recommended Price Option

In this method, you base your price on your profit margin:

Calculate the break-even point of your product, including cost, shipping,

and Amazon fees.

2. Calculate what a 10% profit would be.

3. Add the two numbers to set your final price point.

4. Example: If your break-even point is $15, a 10% profit would be $1.50.

Combine those two numbers, and set your price at $16.50.

Note: This is only your starting point

. You will raise the price over time, to raise

your profit margin. The price point you set right now is just to get you started!

3. Alternate Price Option

Start by looking at your primary and competing products. Set your base price

in the middle range of these products.

For example, if the products are priced at $29.99, $19.99, and $34.99, price yours

around $28.

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4. Launching Price

Set your product at a lower price than your base, when you first launch. You

will adjust this product price over time, but setting the price lower during the

launch can give you a boost, as you are starting out.

A lower initial launch price means you will have a lower profit margin, at

first—this is normal! Getting sales velocity out of the gate is the primary

objective. Once the launch is over, you will raise your price.

5. Pricing Phases

This is the formula for how you will set your prices:

Base price, until you are ready to launch

upcoming lesson)

3. Post-Launch price testing—increase the price by $1 per week until you

notice your sales starting to drop. At that point, revert back to the most

recent price.

2. LBR (Launch, Blitz, and Rank) price (you will learn more about LBR in an

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6. The Price Is Right

You will continue to split-test your pricing throughout the lifespan of your

product. It is the easiest element to split-test, so take advantage of that fact!

You might find that at a higher price you have less sales, but the higher

conversion rate and profit margin make up for that.

Use your base price in your listing for now, until your inventory arrives and you

are ready to launch.

Now, it’s time to go to the next lesson, where you will take everything you’ve

created throughout this module, and add it to your product listing!

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