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Price Ceilings

Blog Post created by gennyr Employee on Oct 31, 2018

I’ve had several conversations with sellers as of late about capping their prices on certain groups of items that they’re listing to the marketplaces, but they were unsure how to go about it. So I thought a bit of a ‘how-to’ on the subject is in order. My colleague Kimberly recently posted about the benefits of utilizing Price Floors in Monsoon to establish a minimum price for a single item or for groups of items, so this post approaches pricing from the opposite angle - using Price Ceilings to set maximum prices.

 

Benefits of using a Price Ceiling

Never price higher than you want to, regardless of competitor prices - you may have strategies in place to price at an average of the lowest price listings, match lowest or even undercut, but there could be scenarios where you want to override this, or simply never dynamically price higher than a certain price.

 

Ceilings can help prevent you from pricing against a competitor’s listing that is extraordinarily high - it’s not uncommon to see a competitor price that is into the tens of thousands of dollars. This is typically not a big deal if there are numerous other reasonably priced offers that meet your competitor criteria. However, when that is the only competitor, you don’t want to price to match it.

 

Potentially reduce Amazon price alerts - depending on where you set your ceiling, it can help you fight those pesky price alerts that you’ll find in Amazon Seller Central. A price alert occurs when Amazon deems your price to be too high and therefore sets your listing to inactive. Previously, you had the option to opt out of these alerts, but not any more. If the root cause of the price alert is that you’ve matched a competitor with an extraordinarily high price as noted above, then a price ceiling can help you kill these two birds with one stone.

 

Avoid setting items to fixed price - if you see that your item is pricing too high based on the competitors or lack there-of, you might be inclined to set it to a Fixed Price to bring it down to a reasonable value. However, if you use a Price Ceiling instead, your item will still be eligible to dynamically reprice if other competitors start listing that item.

 

Different ways to add a price ceiling in Monsoon

There are three distinct areas in Monsoon where you can set price ceilings:

 

Custom Strategies (Settings tab -> Pricing -> Custom Strategies)

When you select any of the Price Ceiling options in a custom pricing strategy (see options in the screenshot below), Monsoon will automatically apply those ceilings to any relevant items that use that custom strategy. These are what we call dynamic price ceilings.

 

 

The most commonly used ceilings here are the Used and New item settings. By having a percentage of the lowest New price as the ceiling for Used items, you can ensure that your Used condition item does not price higher than the lowest New version. This is especially useful if you find that your Like New items occasionally price higher than New condition items.

 

For New condition items, having a Price Ceiling that is a percentage of the market price ensures that your item will not price higher than Amazon’s price.

 

Inventory Group Price Ceilings (Settings tab -> Pricing -> Inventory Pricing)

You can get a bit more granular with your price ceilings by applying them within your inventory group pricing rules. These are what we refer to as fixed price ceilings. To give an example, you may have a classification of inventory where you’d like to have a $25 ceiling, but another classification where you’d like to have a $50 ceiling - see screenshot below. An inventory group ceiling gives you the flexibility to apply a fixed, maximum price to any subset of inventory that you have specified in your pricing rules.

 

 

Item-level Price Ceilings (My Inventory -> Price Ceiling field)

Have an item that needs its own unique price ceiling? You can accomplish that by simply entering a dollar value in the Price Ceiling field for that item on the My Inventory tab. This is also a fixed price ceiling.

 

So which one takes precedence if you have ceilings in numerous places? From our WebHelp:

  • When you set up both a dynamic and fixed priced ceiling, your system applies the lower of the two price ceilings.
  • When you set up a price ceiling in all three locations—as a dynamic price ceiling in a custom pricing strategy, as a fixed price ceiling at the inventory group level, and as a fixed price ceiling at the item level—the item level fixed price ceiling is always used. Between the dynamic price ceiling and the item level fixed price ceiling, the lower amount is always used.

A detailed overview of Price Ceiling functionality can be found here, in our WebHelp.

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