Dealing with price wars on Amazon FBA (arbitrage)

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How do you keep your sanity when it comes to dealing with people on Amazon battling to be the lowest bidder which reduces sales margins to nothing in the process. Last week I sold an item for $31 ($14 profit) 4x. Since then, idiots have jumped in keep one-upping (downing actually) each other and no if I were to match the buy box, I'd take a $2 loss.

what is a good strategy to avoid getting sucked into these price wars and dealing with short-sighted sellers. If I retain my stock and keep it at a good price point for me and my margins, will the buy box eventually return to a profitable level for me or will it never again rise to a good level for this product? basically should I sit on it and wait for it rise in price again or just sell out this stock and cut my losses?
#amazon #arbitrage #dealing #fba #price #wars
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  • Profile picture of the author Importexport
    Originally Posted by Derek k View Post

    How do you keep your sanity when it comes to dealing with people on Amazon battling to be the lowest bidder which reduces sales margins to nothing in the process. Last week I sold an item for $31 ($14 profit) 4x. Since then, idiots have jumped in keep one-upping (downing actually) each other and no if I were to match the buy box, I'd take a $2 loss.

    what is a good strategy to avoid getting sucked into these price wars and dealing with short-sighted sellers. If I retain my stock and keep it at a good price point for me and my margins, will the buy box eventually return to a profitable level for me or will it never again rise to a good level for this product? basically should I sit on it and wait for it rise in price again or just sell out this stock and cut my losses?
    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
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    • Profile picture of the author Derek k
      maybe down the road I will consider that but I dont have the capital or experience for that yet. I'm looking for FBA arbitrage help right now. maybe PL later
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      • Profile picture of the author Importexport
        Originally Posted by Derek k View Post

        maybe down the road I will consider that but I dont have the capital or experience for that yet. I'm looking for FBA arbitrage help right now. maybe PL later
        You could be surprised at what little cost is involved in private labeling. I have taught thousands of people how to buy small quantities even if a supplier quotes a big MOQ.


        I also teach how to do it yourself labeling and branding. Many people have been surprised to find that it can cost less to label your products locally rather than have that done by your overseas suppliers.


        Walter
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        Safely source from China and other countries and import the easy way http://provenchinasourcing.com

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      • Profile picture of the author Fred Kimberly
        Derek,
        You'll continue to get stuck in such situation over and over if you dont increase your product line. Usually Chinese suppliers jump into those listing which are booming and then play the dirty games like price war. There's no way you can win that war...so its better to cut your losses and move on.

        Find a new product and keep selling in different niches, this will eventually give enough experience to find a couple of good products that you would feel to PL comfortably!

        Good Luck!
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    • Profile picture of the author mspike
      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.
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  • Profile picture of the author dave_hermansen
    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.
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  • Profile picture of the author mjoet3324
    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?
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    • Profile picture of the author dave_hermansen
      Originally Posted by mjoet3324 View Post

      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?
      You could do that or you could find another channel/way of marketing them where you are not competing with everybody on the same platform.
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    • Profile picture of the author mspike
      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.
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  • Profile picture of the author yukon
    Originally Posted by Derek k View Post

    How do you keep your sanity when it comes to dealing with people on Amazon battling to be the lowest bidder which reduces sales margins to nothing in the process. Last week I sold an item for $31 ($14 profit) 4x. Since then, idiots have jumped in keep one-upping (downing actually) each other and no if I were to match the buy box, I'd take a $2 loss.

    what is a good strategy to avoid getting sucked into these price wars and dealing with short-sighted sellers. If I retain my stock and keep it at a good price point for me and my margins, will the buy box eventually return to a profitable level for me or will it never again rise to a good level for this product? basically should I sit on it and wait for it rise in price again or just sell out this stock and cut my losses?



    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.
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  • Profile picture of the author THEroyseo
    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.
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  • Profile picture of the author markmiller24x7
    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.
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  • 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
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  • Profile picture of the author martworld
    Try to find products that has lowest competition and could not be sourced easily. This is the best strategy to avoid price wars.
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  • Profile picture of the author mspike
    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!
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  • Profile picture of the author habbott
    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.
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  • Profile picture of the author DWaters
    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.
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  • Profile picture of the author DURABLEOILCOM
    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.
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