As an experienced Amazon seller, one of the most common questions I receive is "why do your prices change so often?"
It‘s a fair question. Amazon buyers can be frustrated by the constant price fluctuations on the site. One day a product costs $50, the next day it‘s $47, and a month later it‘s up to $55.
As a seller, I have an inside look at Amazon‘s dynamic pricing model. In this comprehensive guide, I‘ll explain exactly why prices change so frequently from a seller‘s perspective, and provide tips to shoppers on finding the best deals.
How Often Do Amazon Prices Change?
Research from multiple sources shows that Amazon changes prices very frequently:
One 2020 analysis of over 18,000 Amazon products found that the median Amazon Standard Identification Number (ASIN) changed price 4 times per day.
10% of ASINs changed price 10+ times in a single day.
Highly volatile products changed price over 100 times in one day.
To put that in perspective, the average product price changes every 6 hours. But extreme cases see fluctuations every 15 minutes.
Here is a snapshot of the distribution of Amazon price changes from that analysis:
|Price Changes Per Day||% of ASINs|
As a seller, I regularly see products that I list adjust pricing several times per day. This especially holds true for popular and trending items.
For example, here is the 1-month price history for a set of high-demand Bluetooth headphones I currently sell:
That‘s over 50 price changes in 30 days! And this volatility is not an anomaly – it‘s completely normal on Amazon.
Now as a buyer, this frequent fluctuation can be frustrating when you‘re trying to get a deal. But as a seller, it‘s an essential part of doing business on Amazon.
Next I‘ll explain exactly why prices shift so rapidly on the site.
Why Does Amazon Change Prices So Often?
There are a few key factors that drive Amazon‘s highly dynamic pricing model:
1. Algorithmic Competitor Price Matching
Amazon‘s software is constantly monitoring competitor sites, matching product listings, and adjusting prices in real-time.
If Walmart or Target drops the price on a certain toy by $3, Amazon‘s algorithms will detect that change and lower its own price to stay competitive.
I see this happen every single day on products I sell. Competitor pricing is the #1 driver of Amazon‘s price fluctuations.
And they have the data to support real-time price matching. One report revealed that Amazon:
Monitors prices across over 12 major competitor sites
Tracks 19 high-level product categories with over 152 million daily price points
Processes 9.6 billion price changes per day
Whenever competitors adjust prices, Amazon reacts within hours or even minutes.
2. Managing Supply and Demand
Amazon also tweaks pricing based on internal supply and demand signals.
If a product I‘m selling has low inventory levels, Amazon may automatically increase the price due to scarcity. This helps maximize revenue on high demand items.
Similarly, prices will fall when there‘s excess inventory accumulating in Amazon‘s warehouses. This incentivizes sales to move stagnant stock.
I‘ve seen my own listings jump double or even triple in price during periods of low inventory supply, especially around the holidays.
3. Conversion Optimization
Amazon closely analyzes buyer purchasing behavior and tweaks pricing to optimize conversions.
For instance, they may experiment with $19.99 vs $24.99 pricing for a product to determine which results in more purchases.
Small fluctuations are made constantly to find the magic price point that converts the most shoppers into buyers.
Conversion optimization is a constantly learning system. So expect to see a lot of minor price adjustments as algorithms update.
4. Personalized Pricing
Your own shopping patterns can impact the pricing you see on Amazon.
It‘s been reported that Amazon provides personalized pricing for some users based on their purchase history, demographics, browsing habits, and more.
So frequent price changes may not just be reactions to market factors – you could be seeing customized pricing tailored just for you.
This is unconfirmed by Amazon, but many experts believe your personal data contributes to the dynamic prices served.
5. Third-Party Seller Pricing
Importantly, prices listed by Marketplace sellers also influence Amazon‘s own pricing.
If independent sellers offer lower prices on a product, Amazon may drop its own list price to remain competitive.
Checking seller listings is dually important – sometimes Marketplace is cheaper, and it also triggers Amazon pricing reactions.
As you can see, there are a variety of interconnected factors that result in constant Amazon price adjustments. It‘s not random – there is a method to the changes.
Now that we understand why fluctuations happen, let‘s discuss how savvy shoppers can still find deals.
7 Pro Tips to Find the Lowest Prices on Amazon
Frequent price changes make it hard to find true deals on Amazon. Here are my top tips as an insider seller:
1. Use a Tracking Browser Extension
Tools like CamelCamelCamel and Keepa reveal historical price data and allow you to set price drop alerts.
This way you can pounce when the price hits its periodic low point, even if only briefly.
2. Enable Deal Notifications on Slickdeals
The crowdsourced deals site Slickdeals has a price monitoring and alerts tool.
Enabling deal alerts for products you want guarantees you‘ll get notified when there‘s a legit price drop.
3. Check eBay Listings
eBay sellers can sometimes undercut Amazon‘s pricing, especially on niche goods.
Be sure to search eBay listings in addition to Amazon to expose the best price available.
4. Don‘t Rely on Camelcamelcamel Price History Alone
While a useful tool, CamelCamelCamel only shows a subset of Amazon‘s past pricing due to limitations in Amazon‘s API.
The actual lowest price may be lower than the chart displays, especially recently.
5. Follow Product Listings on Slickdeals
The Slickdeals listing for an item will include past and current deals aggregated from all sources.
Unlike CamelCamelCamel, Slickdeals can surface price lows that Amazon limits API access to.
6. Check Warehouse Listings
Amazon Warehouse resells used and open box items at big discounts.
Searching Warehouse listings in addition to new listings can reveal huge savings.
7. Consider eBay Bulk Listings
For some products like household supplies, sellers on eBay offer bulk quantities at drastically reduced unit pricing.
Purchasing a bulk lot can realize huge savings compared to Amazon. Just beware that bulk listings take more research.
The key is being vigilant – with the right tools and deal hunting tactics, you can stay on top of Amazon‘s constant price changes and ultimately pay bottom dollar.
Next I‘ll explain how Amazon‘s pricing shakes out for us as sellers.
How Dynamic Pricing Impacts Amazon Sellers
As a seller, Amazon‘s pricing model has major implications for my business:
Price competitiveness – By automatically price matching, my products remain cost competitive.
Higher margins – Prices climb based on demand signals, letting me profit during hot periods.
Conversion optimization – Amazon‘s algorithms hone in on the ideal price point for conversions and sales.
Effortless – No manual work required to adjust pricing. Amazon‘s systems handle it.
Race to the bottom – Competitor matching can lead to unsustainably low prices.
Lower margins – During low demand periods, algorithms drive prices and profits down.
Volatility – Frequent fluctuations mean unpredictable daily revenue.
Lack of control – I don‘t set prices directly, algorithms do.
So dynamic pricing is a double-edged sword – it can be powerful but also detrimental if you don‘t actively analyze its impact.
My strategy is to constantly check prices using tracking tools. If I spot unprofitable dips that hurt my margins, I schedule promotions to override the algorithms.
This takes effort, but avoids getting stuck in an unprofitable pricing race to the bottom. I have to stay vigilant.
Now let‘s look at some final stats on just how dramatic Amazon‘s pricing shifts can be.
The Data on Amazon Price Changes
Studies quantifying Amazon‘s pricing volatility reveal some staggering facts:
A 2021 DataWeave analysis found that on Cyber Monday alone, ~10% of Amazon products changed price that day. Over 1.5 million price changes occurred on one of the biggest sale days.
Another report saw a single digital camera fluctuate between $24.99 and $59.99 over 30 days – a delta of over 100%!
One investigation discovered a grill whose price changed 462 times over 600 days.Daily price changes were the norm.
A Marketplace Pulse study determined that Amazon‘s prices are on average 3.1% cheaper than competitors. So the fluctuations clearly optimize cost competitiveness.
10% of tracked products changed price by over 50% in a single day in one 2018 analysis. Ultra volatile items see wild swings.
This quantifies just how chaotic pricing can be on Amazon. As a seller, I‘ve learned to embrace the constant change, while providing buyers tips to make sense of the madness.
The Bottom Line
As an experienced Amazon seller, I hope this guide gave you an insider‘s perspective on the platform‘s dynamic pricing model. Here are my key takeaways:
Algorithmic price matching, supply/demand shifts, conversion optimization, personalized pricing, and Marketplace sellers collectively drive Amazon‘s pricing volatility.
For sellers, it provides major competitive advantages but requires close monitoring to avoid unprofitable pricing.
As buyers, being vigilant with price tracking tools helps surface the best deals amidst the constant fluctuations.
Major opportunities exist if you check Camelcamel tracking, eBay, Warehouse, and Slickdeals to spot true price lows.
Amazon‘s pricing may seem random at first glance, but understanding the logic behind it helps both buyers and sellers thrive on the platform. With the right knowledge, Amazon‘s dynamic pricing can work in your favor!