Are you currently using price floors with Monsoon? If not, learn how to protect your inventory by utilizing the price floor feature in Monsoon.
The price floor feature in Monsoon is designed to prevent your items from repricing to a price below which you are not willing to sell. This can come in handy when looking to prevent ‘racing to the bottom’, i.e. a rapid reduction in price, potentially due to an unscrupulous seller bringing prices down to then purchase your item, or from a naturally occurring market price that is just too low for you to remain profitable. Using a combination of Cost of Goods, Profit, and Floor Modifier, you can protect your investment while remaining competitive on the marketplaces.
The price floor is the dollar amount that you are not willing to go below for an item and is the absolute lowest price that Monsoon can price your item. The amounts entered into these fields include your actual cost for these items, the cost plus a built-in profit value, or even the cost including shipping. Alternatively, the amount can merely be an amount that you don’t want to sell below (keeping in mind other business costs).
Where can I find the price floor?
The Price Floor in Monsoon is composed of the ‘cost of goods’, ‘profit’, and ‘floor modifier’ fields. The calculation is as follows: Price Floor = (Cost of Goods + Profit) + Floor Modifier. These fields together create a ‘floor’ for which your price will not go below. The Cost of Goods and Profit fields are found on the My Inventory tab and on each Inventory Group under Settings -> Inventory Pricing. The Floor Modifier can be applied at the Inventory Group level only under Settings -> Inventory Pricing.
The price floor can include either a cost of goods that has been set at the item level or at the inventory group level. A cost of goods entered at the item level always overrides the group level cost of goods, but will also include the profit and floor modifier amounts from your inventory groups (if you have entered values in those fields). This allows an item to utilize the profit and floor modifier data set up at the inventory group level, but then also have a unique cost of goods that is specific only to that item.
You can also use the price floor to outright eliminate or reduce the number of items that are set to Fixed Price. Many sellers set their items at a Fixed Price either because of a lack of competitors selling the same items, or because the market/competitive price is below what they are willing to sell it for. Using a price floor instead will not only keep your inventory from pricing too low, but will allow the item to dynamically reprice if the price fluctuates above your floor price. This also saves you time as you won’t need to manually adjust items that have been set to Fixed Price.
You can take advantage of the price floor feature to easily mark down groups of inventory that are pricing at the floor, or conversely, mark up inventory that you are interested in holding onto for longer. For example, if you have a group of inventory where you are willing to accept a lower price, you can change the Profit or Floor Modifier value to be lower than the value you previously set for that inventory group. This will update that inventory group floor price in one fell swoop. Or you can increase the Profit or Floor Modifier value for an inventory group, perhaps to deter the likelihood of orders for a period of time until you wish to sell, at which point you reduce the price floor value back down. This is a tactic used by sellers to hold onto inventory until they feel that they can sell with a higher margin (think textbooks sellers before back to school or sellers who wish to prioritize inventory for their brick-and-mortar store).
How to add a price floor
Please take a look at our webhelp for additional information on adding and using the price floor feature.
If you have questions or would like guidance in setting up your price floors, please let us know.