Let the pricing wars begin.
Just days after Amazon debuted a pricing tool for third-party sellers, Feedvisor came out with its own AI-powered optimization software for sellers offering their products, and especially private-label goods, on the platform dominating U.S. e-commerce.
ProductSphere from Feedvisor, the AI-optimization and intelligence platform for major Amazon sellers, aims to bring pricing parity to vendors reliant on the e-commerce giant for the bulk of their sales. Previously, only vendors striving to get their products spotlighted in the coveted Amazon Buy Box could leverage sophisticated pricing tools.
Feedvisor CEO Victor Rosenman faulted a “fear [of] the unknown” as the culprit keeping many sellers from deploying dynamic pricing software. “We designed our ProductSphereᵀᴹ pricing technology to enable brands and private labels to effectively outpace the competition on Amazon,” he said, pointing to an average 27 percent annual revenue lift and a 30 percent average uptick in profit contribution dollars for sellers who’ve implemented the new pricing software.
ProductSphere takes a multi-pronged approach to tackling real-time price management. The software employs machine-learning algorithms that identify all products competing with a particular SKU, in addition to items that are complementary or viable substitutes. It also empowers sellers to set business objectives that guide pricing outcomes so pricing is optimized whether a vendor is trying to liquidate goods, juice profits or maximize revenue.
And much as how Amazon leverages real-time optimization to ensure its prices are competitive across the entire spectrum of U.S. e-commerce, ProductSphere features patent-pending algorithms that similarly adjusts price in real time according to market fluctuations.
Feedvisor believes the launch of a tool like ProductSphere dovetails with “the industry’s growing interest in private labels and brands migrating to the marketplace.” Sellers polled for the company’s State of the Amazon Marketplace 2019 report earlier this year, for example, claimed rolling out private-label offerings is on the agenda for 2019 (32 percent) while 62 percent already sell own-brand goods and for 25 percent, private labels are the only merchandise they sell.
Many are worried about head-to-head competition with Amazon’s relentless incursion into the private-label arena, according to the 44 percent of sellers who cited this concern in the report.
Feedvisor president and COO Dani Nadel believes ProductSphere enables private-label makers and brands to “win against competing brands by dynamically pricing their inventory according to their business goals.”
“With our ProductSphereᵀᴹ technology operating alongside our advertising optimization platform,” Nadel added, “our customers have a competitive edge from discovery to conversion, enabling them to optimize end-to-end performance on Amazon through one integrated platform.”
Amazon’s proprietary price tool and Feedvisor’s newly launched software may share some similarities on the surface but a closer look reveals their differences.
“The purpose of Sold by Amazon is primarily beneficial to Amazon, while also protecting sellers’ margins during the time that the program is running. ProductSphere pricing, on the other hand, serves brands’ and private label sellers’ interests so they can fully control their pricing strategy,” Rosenman explained. “With ProductSphere pricing, they can maintain certain prices or price policies while driving their own business strategies, such as revenue, profit, or liquidation.
“The objective of our ProductSphere price optimization platform is enabling our customers to improve overall performance on Amazon in relation to their competition and the consumer demand on certain price points,” he added. “The machine-learning technology understands the competitive environment, as well as consumer price sensitivity, on a SKU-specific basis, and continuously finds the optimal price to drive revenue and profits.”