Dealing with price wars on Amazon FBA (arbitrage)

If you are selling generic type products that are big sellers, the outcome will inevitably be what you have experienced.

You need to think outside the box and sell products that others are not selling. there are ways to find such products. One is to source them from countries other than China, as I have taught for a long time.

As part of your strategy you should consider private labeling, not the simplistic "slap on a sticker" that seems to be all that most people can think of when they talk about private labeling.

If you are going to the trouble to put your own label on a product why don't you go that little bit further and make your brand a great brand? It can be done with a little thought, and the rewards are great.

Walter

Yes, generics are almost always going to result in price wars. I have a funny feeling that when you originally listed your price, you did not have it the same as everybody else. Instead, you said, "hey I can beat that by a couple of dollars and get all of the business". Let the price war begin ...

We get around that by selling brand name products or by creating our own brand. Many brand name products have M.A.P. (Minimum Advertised Pricing) which prevents this sort of price war.

Finally, if you are doing the sort of "arbitrage" that isn't real arbitrage (i.e. buying at retail and upping the price), you will never be able to compete on price. People getting things at true wholesale will always be able to blow your prices out of the water. Fake arbitrage like this is dependent upon customers being idiots. Real arbitrage, where you are buying something at a remarkably low sale price in bulk (i.e. buying from every store you can find when they have a one day come-on sale of a product to get you in the store - something that happens a lot during Christmas) and then waiting for the price to go back up in the marketplace is the best way of doing arbitrage.

I didn't undercut when I got it. I shared the buy box and only after people started fighting for the box did the price drop. My question remains, will the prices eventually return to good levels or should I cut my losses and sell out at a slight loss if this product listing is ruined?

The problem is you've chosen to take the easy path.

What you're selling can be bought/flipped by anyone.

If you want out of this situation you find a product that's difficult to source and still has buyers.

You could create a bundle with complementary products and then, it will be an offer instead of a product. Obviously, people can copy your bundle but it's less likely to happen than with a single product.

If you are selling some generic products that most of the sellers are selling then it is difficult to withstand in the competition as the competition is huge and the sellers tend to reduce their price for the maximizing their sales. Rather than this, you should look for a product which is unique and the demand for those products is big.

You can lower their price to an extremely low price ( since their auto pricers will always -$0.01 your offer). Do this until they reach their minimum price, increase your price to your normal price, then let them sell out all their stock quickly and

Try to find products that has lowest competition and could not be sourced easily. This is the best strategy to avoid price wars.

Yeah that's the issue arbitrage. The only thing you can do is Lower the price! I had the same issue until I moved to FBA. But hopefully you will get there soon bud!

Thats true. But fighting arbitraging is a hassle. Its quiet saturated specially, when dropship become popular. The only way to survive them is consistently find new product ideas which has less competition.

I lost a lots of buy boxes because of that.

if the amazon is your only medium of selling then sell of and move on, or else try other platform like etsy or ebay to see if you can sell them in there.

Unfortunately, the way Amazon is set up (so customer focussed and pure marketplace) makes it pretty hard to escape price wars, especially if you're facing other sellers with the exact same item/s.

The best advice I can give is to figure out how to compete in other ways. These can include;

1. Creating your own brand/private label
2. Investing in customer service and getting good reviews reviews
3. Use fast shipping tags like Prime to eliminate competition

Of the 3 options, I've seen first hand how fast shipping helps sellers. I've even see a seller win the buy box on Walmart after enabling 2-day shipping, even though they didn't have the cheapest option.

Aim for eBay Guaranteed Delivery, Walmart 2-day, and Amazon Prime shipping tags because people who filter for fast shipping are willing to pay a premium for the products it.

I suggest you simply price to be the lowest FBA price and do not be concerned with merchant fulfilled sellers. If the price keeps selling just be patient and stand pat as the low priced sellers will eventually be gone.

Amazon tends to have extremely low prices which is great for buyers but horrible for sellers. I recommend selling on Ebay where you can make a decent profit. Amazon has set their sales system to force sellers into a price war race to the bottom. So try other sales platforms like Etsy, Ebay, Offer Up, Letgo, Craigslist, Mercari. If you want to win on Amazon you will have to sit on your merchandise until your competitors sell out. You have to be the first seller in or the last one out in order to succeed in Arbitrage.