In-depth analysis of Amazon’s pricing strategy in the product life cycle

On the Amazon platform, every product has gone through multiple stages such as the shelf stage, growth stage, maturity stage and decline stage. The pricing strategies corresponding to each stage are different, and sellers need to flexibly adjust to market changes and customer needs.

1. New product launch stage

When a product first hits the shelves, it is often challenged by a lack of reviews, ratings, and loyal customers. At this time, the pricing strategy should focus on attracting customers. It is recommended to lower the price appropriately, about 10% to 15% lower than similar products on the market. For example, if a similar product is priced at $10, the reference price of the new product can be set to $9. This can not only attract price-sensitive consumers, but also avoid setting prices that are too low and cause customers to have doubts about product quality.

2. Product growth stage

As product sales and positive reviews increase, the price strategy should be adjusted appropriately. At this point, the seller can choose to increase the price slightly to maintain competitiveness. It is recommended that the increase be controlled at around 5%, and adjustments should be made in batches. When prices change, you must always pay attention to changes in sales volume, traffic, and conversion rates to avoid a sudden drop in sales due to price adjustments. For example, if sales are growing steadily, the product price can be gradually increased from $9 to $9.50.

3. Product maturity stage

Once product sales are stable, the price strategy can be further adjusted to be close to the market average price, or even slightly higher to increase profits. At this time, sellers should realize that customers are relatively less sensitive to price, especially when product reviews and sales have accumulated considerable weight. At this stage, the product price can be increased modestly to $9.9 or $10.99 without a significant negative impact on sales.

4. Product decline stage

The life cycle of a product is not endless. When it enters the decline stage, sellers need to re-examine their pricing strategies to avoid inventory accumulation. When there is not much inventory, you can speed up sales through promotions such as small price cuts; when there is a lot of inventory, it is recommended to adopt a more active clearance strategy, such as launching a “buy two, get one free” promotion. Compared with direct discounts, this method can effectively attract consumers while reducing the risk of losses caused by too low prices.

Summary

Across the different lifecycle stages of an Amazon product, clear pricing principles are an important factor in success. By adjusting pricing appropriately, sellers can not only seize market opportunities at each stage, but also continue to maintain profits and customer satisfaction.