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When we talk about selling on Amazon, and specifically pricing, often the discussion becomes centred around the idea that the cheaper you sell your products, the better you will sell.
In many cases that is true, but pricing on Amazon doesn’t have to be a race to the bottom, in this article we’re going to cover the concept of Value Selling and how to use it with your Amazon listings to maximise profits.
Before we talk about Value Selling, we need to establish what we mean by Value. For our purposes Value is how we measure the worth of a product against the cost of obtaining it. Something cheap that is high quality and incredibly usable could be high value, while a similar cheap product that falls apart after a few uses is probably low value.
A great example of this comes from Terry Pratchett’s Men At Arms.
"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."
In this case, the more expensive boots are better value, despite being higher cost, because they offer more use.
Now that we know what Value is, we can talk about Value Selling, which is the process of marketing your products based on the value that they provide, rather than the price alone. In other words, Value Selling is about avoiding the race to the bottom when it comes to pricing.
Already, you should be able to see the benefit of Value Selling over price focused selling, because you’re not digging into your profit margins just to facilitate sales. For Amazon sellers, profit margins are vitally important and being able to pad that margin by selling products on their value can make a huge difference to your bottom lines.
So why doesn’t everyone do it?
Because Value Selling is hard. Convincing people to spend more money on your products because of your quality is difficult, customers naturally gravitate towards cheaper products, so to sell on value you need to demonstrate that your products are worth that extra cost.
So the real question right now is how do you sell your products based on their value?
The first step is identifying who your customers are, and honestly asking yourself would they be willing to pay the price you’re asking? The answer to that will depend entirely on your products, some products just don’t have the potential for Value Selling, so it’s important to determine that at the start before putting work into Value Selling.
Next you need to identify what makes your products better than your competitors. Once you’ve found your unique selling points you can focus on that and base your marketing around that. You can use these points as the basis for optimising your Amazon listings, and creating PPC campaigns. The goal here is to make customers aware of why your product is worth the extra investment. Aspects like durability, reliability, utility and quality are all great reasons for customers to spend extra money on your product.
A well-optimised listing will help you showcase your product well, and using extra Amazon features such as Enhanced Brand Content will really help increase your product’s perceived value.
In most cases you’ll also want to use your unique qualities as keywords that your product ranks for, to increase the chances of customers finding your product. An example of this would be instead of trying to just rank for “Jacket” you could rank for “Waterproof Jacket”, by adding that extra level of detail to your keywords you will attract more targeted customers than aiming for vague top-level keywords.
Like any marketing tactic, there is a downside to Value Selling, in most cases you will see a lower sales volume when selling on value. However the benefits far outweigh the costs. For the price of making less sales, you’re earning more profit per sale which can balance out in the long term. On top of that, Value driven products will generally rank better on Amazon over time because they will naturally generate positive reviews and feedback much better than their lower quality, price driven relations.
Just like any new marketing approach, you should try Value Selling out on one of your products and see the results for yourself, you might be pleasantly surprised.
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