How is Amazon's price calculated? How is it set?

Some friends want to open a store on the Amazon platform. Since it is a cross-border e-commerce, it involves currency conversion. At the same time, when setting product prices, you need to consider logistics costs. Let’s talk about how to calculate Amazon prices today.

When you put a product on the shelf, you have to learn how to set the price. When setting the price on Amazon, you don’t just set the price as you wish. We need to refer to our competitors’ prices.

If your product is exactly the same as your competitors, then you must make sure that your price is either lower than your competitors' or much higher.

For example, if others sell for $20, you can set the price at $19, or $25 or more. This is because it involves the buyer's shopping psychology. Many buyers want cheap products, but there are also many buyers who want better quality products.

A higher product price means that your product quality should be better. Generally, the premise of following this principle is that it needs to correspond to the main picture of the product. The main picture of the product is exactly the same, the price must be lower than others. If the price is much higher than others, the main picture of the product must have more texture. You will set the price of the product, and then you need to calculate the product cost.

Factors that influence pricing

1. Platform commission: When sellers sell products on the cross-border e-commerce platform Amazon, Amazon will charge different commissions based on different categories.

2. Product quality and procurement costs: We know that the production costs of products include raw materials, research and development, manufacturing, transportation, and factory profits. If sellers improve or innovate products to ensure quality, the cost will also increase.

3. Market supply and demand: Market demand has a significant impact on product prices. When the market is chasing a new product, the new product is in short supply, and its price will also increase accordingly. However, when the product is widely distributed online and offline by merchants, buyers have more choices, and sellers' profits are diluted, which will also affect the price.

In addition, the speed of developing new products in each industry is also very fast. When new products appear, the attractiveness of old products to buyers will also decrease, and price reduction is inevitable.

4. Expected profit: Profit is also an important factor affecting price. As a seller, you need to invest a lot of manpower and material resources. When selecting products, you will consider whether the product has a market and profit. Otherwise, there is no need to develop and promote it. The expected profit of sellers for their products is also different. Some may be several times the cost, and some may be several percent.

5. Brand image positioning: Different product brand positioning has different price positioning. Brands that go for the low-end market will have lower prices; brands that go for the mid-end market will have moderate prices; brands that go for the high-end market will have higher prices, but their products and services are also high-end.

If the product quality is good, the cost will naturally increase; sellers with their own factories have relatively low costs, while sellers without factories have relatively high procurement costs. In order to ensure profits, sellers will naturally set higher prices.

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