How to Deal with Price Tankers on Amazon

It's happened to all of us! 😭

You did the analysis and it looked like a great product .

Before you knew it there were more sellers on the listing, sales slowed and the price started tanking. 📉

Price tanking is caused by sellers continuously undercutting each other to win the Buy Box. This competition triggers a downward price spiral that killls profit margins, making the item unprofitable or leading to significant losses.

Key Aspects of Price Tanking

• Causes: Common triggers include over-competition, panic selling to avoid long-term storage fees, and aggressive repricing software.

• Impact: It erodes profit margins for all sellers, makes inventory management difficult, and can lead to long-term devaluation of products.

• Seller Psychology: It often occurs when sellers panic or aim to liquidate slow-moving inventory, which can result in selling at a loss just to recover capital.

While it may temporarily boost sales for the seller with the lowest price, it generally causes, unsustainable, long-term pricing issues for the listing.

A few suggestions on how to handle this.

1️⃣ CHECK THE DATA

Analyse the Keepa sales charts. They will tell you EXACTLY what's happening... Where the price was, where it is now, whether this is seasonal, how many sellers are on the listing and so much more!

2️⃣ DECISION TIME

Decide whether you're going to JOIN in and COMPETE for the buy box or; you're going to WAIT it out.

If you can't be the FIRST to sell at the higher prices and the listing tanks, often it can pay you dividends to WAIT and sell at the HIGHER price 3-4 months later (on the worst listings, it could only be a few days to a couple of weeks).

3️⃣ JOIN IN

Let's say that the data shows that its going to take 4-6 months to sell out of your stock.

IF you are going to join in, you're going to need to be AGGRESSIVE and grab the Buybox at break even price to sell out and move on.

Let your repricer app do the work if you have one.

4️⃣ OR WAIT

If you cannot compete on price then leave and reassess in 30 days to see if price lowering has increased sales velocity.

Hope the other sellers notice this too and adjust their pricing upwards.

If you don't need the cash flow that quickly then this option might be the better one for you.

5️⃣ CHALK THIS UP FOR YOUR LEARNING

Every summer there is a slow-down in sales and price-tanking is rife.

Always be improving your Keepa analyis skills

Online and retail arbitrage are a numbers game. You win some! You lose some!

Shallow and wide is the best restocking strategy unless you can guarantee great demand.