The Secret of Amazon’s Pricing Techniques

Pricing Techniques Used By Amazon

Amazon’s sales are more than one trillion dollars yearly. How have they handled to become so effective?

Their secret is the way they price their products. There are a variety of methods they use that deserve thinking about in your own organization if you want to be more competitive.

The Worth of 9 and 7

Research studies have actually revealed that the most effective marketing numbers are 9 and 7. It may not appear like it, but there can be a huge distinction in between $4.99 and $5. People tend to relate to the lower amount of $4 despite the fact that the rate is almost $5, and are therefore more willing to buy.

The 2nd most popular number, 7, is good for this kind of rates, such as $9.97. It likewise works truly well for round numbers, with popular online rates being $7, $17, and so on for eBooks, products and services, instead of $9 or $19. If you are not going to include cents to your price, make it something with a 7.

Amazon uses these 2 strategies when they are setting their prices. However as you can envision, they have a variety of other techniques up their sleeves.


Amazon will mark down popular products, however enhance the rate on less popular ones. In this way, they develop the perception that they provide excellent prices on everything, which is of course not the case.

Loss Leaders

They will also create loss leaders; that is, items they are willing to sell cheaply in order to get individuals to purchase other products. They will provide deep discount rates in their Gold Box offers, which act as a lure to get individuals to go shopping and purchase more.

” Let’s Have a Sale” Sales

Amazon will develop a factor or an angle to get a sale. This can be tied to the holidays, special occasions or for no reason at all aside to promote sales. Often, these sales are limited time offers (LTO’s) – products on sale for only a brief time.

Amazon No.1 Best Selling Author SystemThis psychological pricing technique is based upon people not wishing to miss out on a great deal. The Gold Box products are on sale, but the clock is ticking and the quantity might run out.

Psychologically the buyer feels pressured to buy for fear of missing out.


Amazon’s recommendations to you are based upon your previous purchasing history, however while those products may be attractive, they are not normally marked down. Nevertheless, Amazon is counting on its track record as a trusted seller with excellent customer support as the methods of getting you to buy even if they do not offer rock-bottom rates.

Free Shipping, and Prime

You also get free shipping sometimes, and Prime subscription entitles you to both totally free shipping and other advantages like TV programs, music and audio books, for one low annual cost. Studies have shown that Prime members spend a substantial quantity more each year than those who are not, so Amazon wins here once again.


Bundling groups 2 or more items together for a reduced rate compared to what you would pay separately. It might seem like a good deal, however beware. When it concerns electronic devices, for example, Amazon may draw you with a terrific price on a flat-screen TV, however the accessories they offer such as earphones, cables and so on, are not competitively priced at all. You might do far better if you looked around. Nevertheless, many people like the benefit of one cost for all and will happily spend for a package and think they got a deal.

Amazon are pros when it comes to selling and have built up their impressive service in just a couple of short years, starting completely from scratch. Study their mental rates methods and see that make sense to use to your company. Then see the sales circulation in.


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