BMW Posts Drop in Profit As Prices Fall Due to Competition

BMW AG posted a drop in profit by 2.5% during its first quarter as prices of its cars fell amidst a battle with Germany luxury carmaker Mercedes Benz to keep its status as the biggest maker of luxury vehicles in the world. The price of vehicles made by BMW dropped by 5.9% to 33,700 euros […]
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BMW Posts Drop in Profit As Prices Fall Due to Competition

How Should You Handle Price Competition on Amazon?

What should you do when your Amazon competitor matches your price?

Even worse, when your competitors undercut you?

Will your sales plummet?

That’s the logical conclusion, especially if they get the “Amazon’s Choice” flag.

So should you cut your prices and race your competitors to the bankruptcy court?

Customer Buying Behavior

Amazon customers choose to buy from the site for many reasons:

• Low prices
• Reviews
• Ease of returns
• Free postage
• Good stock levels
• Free add-ons

Do you always buy from the lowest priced Amazon seller without checking their review ratings? Nobody else works like that either.

Buyers want value at least as much as they want low prices, and they will consider all of the above factors before they make their decisions. If you cut your prices, you also cut your profits on each sale. So it makes no sense to reduce prices while ignoring all the other factors in your buyers’ decision-making process.

Amazon Ranking Criteria

The default ranking criterion on Amazon is “relevance,” and there are hundreds of complex factors that go into this algorithm. These factors include price, average review score, recent review trends, and how long you have been selling on Amazon. They also include how many customers return their purchases, what other customers are clicking on at that moment, and stock levels.

Amazon sometimes flags one seller as “Amazon’s Choice” as shown in the screenshot below.

Screenshot source

If you are awarded this flag, then it will have a significant impact on your sales, but getting it is far from simple. You need to work on every aspect of the value you provide to Amazon’s customers, not just price.

Automatic Repricing Software

There are no monopoly options on Amazon. You are competing with other companies that sell the exact products you sell. If they cut their prices to gain a temporary advantage, should you cut yours?

If you reduce your price, you need to sell more products to make the same profit.

Table source – own work

The table above shows that if you reduce your price by 10%, you need to sell 25% more to make the same profit. If you cannot make this number of extra sales, then your bottom line will suffer.

You need to be continuously evaluating your pricing decisions and how they are affecting your profits. This includes looking at:

• Your competitors’ reactions to any pricing changes you make
• Your stock levels
• Competitors’ stock levels
• Number of sales you are making at a given price point
• Number of sales your competing sellers are making while your price is at a given level

It gets too complicated for any human to handle all the variables, especially when those variables are changing every few seconds.

Luckily, you can automate your pricing decisions with an Amazon repricer such as that which Feedvisor offers.

Screenshot source

Automated repricing software can base pricing decisions on many more factors than your brain could ever handle.

Feedvisor gives you back the time you used to use to spend trying to optimize your prices for maximum profit. It raises and lowers your prices according to the pricing rules you set up and can even take into account the sales you make through other channels.

Most importantly, automatic repricing removes any human bias and is based on numbers in order to maximize efficiency and profitability.

Your Reputation Advantage

If you already have a reputation in your niche, use content marketing to direct readers to your Amazon store. This gives you a hidden advantage over other sellers. Your readers already think well of you, so with a few strategic guest posts you can convert that sentiment into sales.

Your Repricing Options

If you cut your price without cutting your costs, you make less profit. Cutting your prices only makes sense if you can sell enough additional products to make more profit than you were at the higher price.

There are other ways to get the sale, even on Amazon. Better reviews, extra photos, free “extras,” free postage, and better descriptions are how you can position yourself as the seller who offers the best value alongside fair pricing.

Repricing as a response to competitor price cuts is one option, but cutting your own prices is rarely the best choice. If you have repricing software, you will have no worries because the software handles your pricing decisions according to the rules you have entered. Because they give you time to lay down rational repricing criteria in advance, using Feedvisor and similar repricing tools prevents you being bounced into price wars nobody can win.

The post How Should You Handle Price Competition on Amazon? appeared first on Growmap.

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How Should You Handle Price Competition on Amazon?

Business Intelligence: Your Key to Success in Stiff Competition

In the past, the expense of collecting, storing, and analyzing data meant business intelligence (BI) was available only to large corporations.

But technology has changed and increased, namely through widespread internet access and usage. It’s therefore become quite affordable to collect and store big data that’s useful to business decisions. The problem, until recently, has been handling the analysis of said data.

Now, a variety of tools are available to assist even the smallest of businesses operating on a limited budget. These days, anyone can be his or her own data scientist.

What Is Business Intelligence?

We can break down business intelligence  into four main categories:

• Reporting: This area of BI focuses on developing documents with valuable information in order to communicate to readers what has happened. The writer determines the time span the report covers, as well as the information it covers. Reports can be as simple as a weekly look at what has happened on Facebook. Or they can be as complex as an annual look at the entire company’s finances. Many BI tools (discussed below) have built-in reporting tools.
• Analysis: This area of BI focuses on why something happened, which is a core part of BI. The data itself is pointless if you can’t understand what it’s telling you. The analysis part is why many companies have data sitting around that’s doing nothing for them. Many tools are helping to bridge these gaps. There are three main types of analysis, which are important to know for tool selection.
  • Spreadsheet: Data presented in spreadsheets helps you to evaluate performance.
  • Ad-Hoc Query: This kind of software allows users to develop their own queries, which is how many BI tools on the market today work.
  • Visualization Tools: This software coverts raw data into visualizations the users can read and understand. Examples include graphs and pie charts.
• Monitoring: With BI, it’s possible to monitor information in real-time, and if not in actual real-time, fairly close to it. Monitoring can help you see how things are going right now. It can also help you evaluate any point between reporting periods if you need to make a decision quickly. There are three kinds of monitoring:
  • Dashboard: Dashboard monitoring provides a central location for all data and actionable metrics. Typically, the information is represented in a graphical format for better and easier comprehension. Google Analytics presents in a dashboard format.
  • Key Performance Indicators (KPIs): KPIs measure the performance of a specific action or project. These include return on investment (ROI), customer acquisition cost (CAC), customer lifetime value (CLV), and so on.
  • Business Performance Management: Business performance management refers to a system designed to ensure people meet performance goals and deliver results. Some BI tools refer to this type of monitoring as the “Balanced Scorecard.”
• Prediction/Forecasting: BI helps us see what’s going on right now. But based on the data we feed into it, we can also predict what may happen in the future. Of course, these predictions are just that—they are not guarantees of what will happen. Variants might impact the actual outcome, but forecasting can help guide your business decisions in the right direction instead of leaving you to take a shot in the dark. Prediction is a fairly complex area of BI, so many companies rely on others to handle this part for them. However, there are some tools that use automation to manage it well. There are two types of prediction:
  • Data Mining: Data mining finds patterns and relationships both in data and between sets of data. The end goal is to extract the data and create something you can read and understand so that you can use it.
  • Predictive Modeling: Predictive modeling aims to predict outcomes or the probability of an outcome.

Benefits of BI

One of the main benefits of BI is obvious. Companies can dissect and transform the data they collect into something they can understand and use. They can then make improvements to their products and services.

BI allows companies to see where they need to make changes in marketing to improve their profit margins. They can project how much product they need to produce. And they can see what kind of overflow they have and what sales tend to perform the best with their customers.

Companies can see who their best and worst customers are, how much they’re spending to acquire new customers, and more. Ultimately, data can support the majority of business decisions. Data makes it easier to see the direction the business needs to move in to continue being successful.

But with today’s cloud-based BI tools and ease of accessibility, BI also offers interdisciplinary opportunities. It can strengthen collaboration between departments, ultimately in order to improve performance company-wide.

For instance, your content creation team can work closely with the data team to determine how each piece of content is doing. Using the insights from that data, the content team can then adjust their editorial calendar.

They can include more content that performs well and eliminate content that does not. Doing so will save time and money on content creation, while in theory boosting the amount of money that content indirectly brings into the business.

BI Tools

There are a wide variety of BI tools out there from which to choose. Some tools require the exclusive use of desktop client applications. But nearly all of them offer a browser-based experience, making it possible to use the tools from anywhere there’s an internet connection.

Many vendors are also working on implementing native applications for use on tablets and smartphones. So you’ll be able to use them anywhere you can get online, regardless of your device.

Larger companies might implement BI application servers as part of their on-premise IT department. But doing so is costly in the sense you must have the servers to hold the data and a team of IT experts on hand to manage it. As a result, smaller businesses are opting to deploy cloud-based BI solutions.

Cyfe

Cyfe is an all-in-one monitoring dashboard you can use for everything related to your business. You can create multiple dashboards as needed. For example, you could have dashboards for social media, marketing, financials, IT, clients, sales, and more.

You can pull in data from a number of sources automatically and get real-time reports. The pre-built widgets make it easy to get the information you need right in front of you. There is a free trial, but you’ll need to pay $ 20/month for the paid version that allows for more widgets and dashboards. Cyfe also allows for branded reports and domain name mapping.

Sisense

Sisense is a cloud-based BI platform designed for non-technical people. There is a free trial available, but you must contact the company to get pricing information. Sisense is capable of processing large amounts of data in minutes and then transforming that data into visuals on a user-friendly interface.

Sisense also has a BI bots feature. This feature allows it to integrate with communications and productivity platforms such as Slack, Skype, and even Alexa. As a result, users will be able to speak their data commands and turn conversations from Skype and Facebook Messenger into an informal knowledgebase of sorts.

Microsoft Power BI

Microsoft Power BI is a cloud-based analytics service. There is a free version, but if you want more features, you’ll need to upgrade to Power BI Pro. The cost is $ 9.99 per user, per month.

This system is similar to Cyfe in the sense that you can create a dashboard with more than 50 connections to popular business applications. There are also pre-built dashboards designed to help you get started quickly.

Microsoft Power BI offers both a mobile app and a desktop app. The desktop app allows you to write your own reports and include visuals. The idea behind the platform is that if your team knows how to use Microsoft Office, they will understand how to use Power BI. That way there’s no need for IT or training.

Hubspot

Hubspot is a BI tool for your

Business Intelligence: Your Key to Success in Stiff Competition