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Grow your Business from Small Seed to Moneytree: How to Price Products on Amazon

There is a common problem with newcomer sellers on Amazon – they actually sell their products the wrong way! Why? Because a lot of people do not put enough thought into a very important factor on their road to success – pricing the products.

Most of us work very hard to acquire products and inventory that we have, and then sometimes we wimp out when it comes to pricing, because it could take too much time or we get too nervous, so we join that race to the bottom, lowering our prices to match those of our competitors.

Let’s go through psychology that affects pricing strategies. And before we dig into this stuff, let me tell you, that I reconsider my products’ pricing three times a day! The reason that I mention this is because you cannot just send your stuff to Amazon, just to set it and forget. Pricing your products constantly is very important!

I do not focus that much on my private label products, but I do dedicate a lot of time to my items that are RA (retail arbitrage), OA (online arbitrage), and wholesale. Do not just send your inventory in and think that it’s going to sell. You need to be constantly checking on those prices and have a pricing strategy for each product that you send in.

So let’s figure out why pricing is that important. There is a lot of psychology involved with pricing. It can make a difference to a customer what your product is priced at. They may not even realise that it makes a huge difference to them. Very often, we sellers, think as buyers, when really we must think as customers.

Psychology behind Pricing:

Price perception

I have 2 private label products that are exactly the same, and I price one of them $30 higher than the other product, and higher than my competition does. This overpriced product does not sell that often, as a cheaper one, but that’s okay, because my margins on it are crazy good.

And this product is being bought because customers are looking at it and thinking: ‘’Man, this one’s $30 higher – this must be better!’’ And, yes, I am confident that my product is the best quality product on the market.

This is really a perception, it’s called prestige pricing. It’s when people believe, that the more expensive something is – the higher quality it must be. Even if in reality it’s the same as the other products.

This strategy works best on those products that are seen as nice and luxury items.

End your prices with 9

It may sound silly, or just as a tradition, but in fact prices that end in 9 sell better, than those that end with any other number. It must be a psychological thing of saving a penny, or a dollar, but magically it works.

Free Shipping

If you are doing Merchant Fulfillment, you must test out offering free shipping versus charging for shipping. That may seem small, but most of the times getting free shipping makes a big difference to the customers.

What I do, is I calculate what it would cost me to deliver a product to a far away location, and price my product according. But I always have a free shipping doing FBM.

Never mention that yours is cheaper

Telling your customers that your price is cheaper and comparing it to competitors makes people feel like they are being tricked, or that your product is not good.

On your own listings never mention price or your competitor’s price anywhere in product description, unless you are specifically trying to say why your product IS better and cheaper.

Emphasize the ease of use/time saved/benefits! Do not emphasize the price

When you are creating a listing for your private label product, make sure that you are focused on what great benefits this product has, how much time it will save its user. People like to connect their personal feelings about what the product does for them. Make sure that you connect with those personal feelings.

This is the main driving force that sells your products. It’s HUGE! Trust me.


When you are creating those listings set the manufacturer suggested retail price higher than your actual price. People do not like to think that they are paying full price. I know I don’t, and I’m sure you don’t either.

Setting your $50 product’s MSRP to $75 will trigger Amazon to show that your product is sold with 33% discount. I wouldn’t go too crazy with it, as it could look like there is something wrong with the product, and it could affect one of the other psychological things that we talked about. Showing too much of the discount could make people thinking about the price more than you want them to.

Change prices, even slightly

On listings with multiple variations, do change the prices to show that they vary. It appears that people are more likely to actually choose one of the products if the prices are off by a penny or two, compared to when the prices are all even.

If all prices are the same people sometimes do not know what option to pick. But when you price variations slightly different your customers will make a buying decision more quickly.

Monitor your Prices Constantly

So those were quick major psychological things that you need to take into consideration, when you are pricing your products, but more than anything I want you to realize, that as an Amazon seller you have to be monitoring your prices constantly. This is an extremely important part of your business! Do not ever forget this.

If you are a new seller, you have to understand that you must constantly massage that price to get the sale, you have to analyze your competitors constantly. Estimate how many sellers you are competing with. Know, that your aim is to capture that BuyBox. If you want that sale, you have to float in that BuyBox!

Always have a plan and a pricing strategy in place! Have it in your notebook, have it in Excel, track your competitors, understand if it’s a seasonal item.  Always have a time frame that you want to see a turnover.

Remember, that it’s not necessarily that you have to lower your price to get into BuyBox. Amazon’t algorithms work in mysterious ways, but it may think that you are an active seller, since you are changing your price, and setting a price higher may get you your BuyBox.

Check competition’s stock: if you are seeing that they may run out of stock, and sales ranks suggests that sales are constant and often, do set the price higher. If you are selling a product, that is also being sold by Amazon, and the BSR is low, set the price higher than Amazon. This will yield you sales when Amazon runs out of stock.

Do not be afraid to change prices just to test things out!