How to cope with inflation?
Dear Forum, how do you cope with this economy?
On one side, I see sudden large increase in costs, from rent and utilities to printing paper and shipping.
On the other side, Amazon is pushing every day to lower prices, deliver faster, pay for every return etcetera. How do you make ends meet?
I start to despair…
0 replies
Seller_7VbclcPFFRTnc
Unfortunately you have 2 choices really, absorb it, or pass it on
Seller_77IcbQKVGdZo0
No easy answer you do what is best for your business.
With some of the increased costs on items I am absorbing them and not passing them onto the customer. This is where the increase may be relatively small.
Other increased costs on items I am passing onto customers. For example wholesale prices on some of my items have gone up by 20% in recent weeks. I can’t afford to absorb that I have to pass it on.
There are also other increased business costs you need to keep your eye on such as rent, electric, gas, courier charges all of these may mean you need to increase your prices.
As a whole I don’t worry about what my competitors do I price so I make a profit and have a profitable business. If others don’t want to do that or can price lower and make a profit I really don’t worry about.
Seller_B4VbHpnDLDLAU
You look to see where you can save money, but will cost some outlay,
were looking at electricity costs seeing where we don’t need it during the day in the office.
Looking at saving on paper and printing by using the free Royal mail labels that are provided on account.
Where you buy your supplies. are they he cheapest.
Recycling boxes and using them for shipping.
But yes no 1 is you up the prices to a level where your making profit. if you are not then its a product you dont look to sell again
Seller_bdSdLjti4IugQ
How are everyone’s sales the past few days? Our FBA orders are down something like 70% for this same day year on year… I’m trying to work out if people are simply not spending or if there’s other reasons? Something that came to mind was last year there was still less people visiting with gits due to restrictions so maybe more people got money or had gift cards to spend??
Seller_lljyzgTxr5fgI
In the best ways you can. We have some items that have never had a price increase in 6 years; others have increased twice in the last 6 months. Tweak what you can, when you can. I don’t go for this “penny bazaar” nonsense and, TBH, I’m not sure buyers do either. Sales have still been very good so (despite the state of the economy) buyers are still buying.
Your opening post doesn’t state whether or not you’re FBA or FBM so @dragonmaster post is a valid one, for this thread. We are 100% FBA.
Seller_2EG6N58tYDYmC
How to cope with Inflation in general: it is not a new thing, it has been going on for years. Just adjust to a new lifestyle ( a bit lower level) and don’t expect more these days. When it is over, you can get back to your old standards. We all are in the same boat so you are not alone.
When it comes to how to cope from Amazon’s side of it, the only thing I don’t add to prices is my labour work. I am the cheapest worker ever but yet prefer to be on Amazon than do job hunting.
Seller_lNhyG8QTulPm4
Well, this depends on your business niche.
In my case, prices go up. In fact i do that right now as we speak. Increasing prices on most items.
Seller_wAn7LAlr0jsID
It would be nice if the Small and Light £9 threshold could be increased to at least £10. Last time fees went up the UK S&L threshold was left as is.
Sometimes you have products that if you come out of the S&L program, you have to move the price up by multiple pounds to cover the increased fees etc. Would be nice for a little more room for S&L.
Inflation has meant everything going up but some things we just can’t increase in price or face loosing sales (tried and tested).
Seller_6sxtIS0RbZ5k7
You need to work out which is more profitable to you, whether to sell fewer with a bigger profit margin or more with a smaller profit margin. It could work out much the same or you could end up being a busy fool.
You also need to bear in mind that, if you are the only person selling on your own brand, you need the sales to boost your ranking so more sales with a smaller margin does have other benefits for you. If you are sharing a listing, not so much so.
Seller_sSxf9ltVoIMz9
Here’s my tuppence worth.
Inflation is easy. Prices rise but I raise my prices accordingly. I forward order and the value of the stock is constantly increasing even before I get it to my warehouse. My old slow moving stock suddenly becomes saleable as others (buying new stock) have to increase their prices and I’m sitting on cheaper stock making bigger margins.
As it happens I was fortunate enough to be in the position this time last year to have the money to buy a lot of stock at cheap prices and the warehouse was full to the brim.
Now we are in the middle phase prices are higher but stable. Again life is ‘easy’ I buy at a comparable price to my competitors, I sell a bit cheaper. Life rolls on.
The next phase is deflation. Then I am truly worried. Suddenly my warehouse full of stock is losing money every month, I can’t just wait for the world to catch up to my prices. I’ll have to start dumping stock, even at a loss. Trouble is, so does everyone else and we end up in a downward spiral to the bottom price wise.
So I picked 2021 as the year of the shortage
I picked 2022 as the year of the price rise.
I pick 2023 as the ‘Just in time’. Run as lean as you can and run your stocks as low as possible, because when prices drop they will fall very rapidly. People will be buying cheaper and undercutting to we are going to have to move quickly on pricing and be prepared to take some hits margin wise.
