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Price ceilings

Price ceilings are calculated using a fixed or dynamic value which is applied globally, at the inventory group level, or at the item level.

Description

Before we look at dynamic and fixed price ceilings and where you can set them up, let's review the terms we use when we talk about price ceilings.

Glossary

Amazon target price

Before making any pricing calculations, Monsoon Marketplace first identifies an Amazon competitive offer listing (or average of competitive offer listings) according to the settings in your default pricing strategy or custom pricing strategy. This competitive offer listing is used as your target price.

Amazon competitive offer listing (item price + shipping) = the target price used to price an item

If your pricing strategy is set up to price at the average of competitive offer listings, the average of competitive offer listings is used as your target price.

Amazon default shipping rate

Amazon collects a shipping fee from a buyer that is then passed on to you as a credit to help cover your shipping costs. Monsoon uses this default rate (a per item shipping rate + any per pound rate) when calculating an item's price.

Competitive offer listing

Monsoon Marketplace uses Amazon's Subscriptions API notifications to provide fast, competitive repricing anytime one of the 20 lowest offers for an item you sell changes price.

A competitive offer listing is one that matches the criteria you've set up in your pricing strategy and is not sold by one of your ignored competitors. The competitive offer that's used to price your item is selected from the 20 lowest offers in an Amazon notification.

When an item's in New condition, it prices against the 20 lowest price offers in New condition.
When an item's in the Used condition group (Used - Like New, Used - Very Good, Used - Good, and Used - Acceptable), it prices against the 20 lowest price offers in Used condition.
When an item's Collectible check box is selected, it prices against the 20 lowest price offers in Collectible condition (Collectible - Like New, Collectible - Very Good, Collectible - Good, and Collectible - Acceptable).
When an item's in Refurbished condition, it prices against the 20 lowest price offers in Refurbished condition.

Read more about offer listings in the Amazon Help article The Offer Listing Page.

Condition

Monsoon Marketplace supports the following Amazon condition groups: New, Used (Like New, Very Good, Good, and Acceptable), Collectible (Like New, Very Good, Good, and Acceptable), and Refurbished.

Dynamic price ceiling

A dynamic price ceiling applies at the time an item prices. Depending on the condition of an item, you can use a price ceiling that's no higher than the 5th lowest competitive listing, is a percentage of the lowest new price, or is a percentage of the market price.

Price should be no higher than the 5th lowest competitive listing.

You can use the fifth lowest competitive offer listing within a filtered list of offers as a price ceiling. If there aren't five offers to consider, the price ceiling doesn't apply.

For used items, use [ __ ] % of the lowest new price as a price ceiling.

You can use a percentage of the lowest price New condition offer as a price ceiling for items in Used, Collectible, and Refurbished condition when Amazon includes information about the New offer. If Amazon doesn't include the information or you select the FBA only option in your custom strategy settings and there are no FBA offers, this price ceiling doesn't apply.

Use [ ___ ] % of the market price as the price ceiling.

You can use a percentage of the Amazon market offer (a listing sold by the marketplace itself) as a price ceiling for items in New condition.

This ceiling doesn't apply when pricing an item in the Used, Collectible, or Refurbished condition groups because Amazon market offers aren't included in notifications for those conditions.

Fixed price ceiling

A fixed price ceiling is a fixed monetary amount you set up on the Settings tab under Inventory Pricing or on the My Inventory tab. A fixed price ceiling that's set up on under Inventory Pricing is a group level price ceiling. A fixed price ceiling that's set up on the My Inventory tab is an item level price ceiling.

Notification (Amazon Subscriptions API notification)

A notification is a list of the 20 lowest price offer listings in the same condition group as an item that you sell. Amazon packages notifications into four different condition groups: New, Used (Like New, Very Good, Good, and Acceptable), Collectible (Like New, Very Good, Good, and Acceptable), and Refurbished.

Depending on how your system is set up, notifications can either be pushed directly to your system (the fastest repricing option) or retrieved from a Monsoon Marketplace service that stores notifications for you. See Pricing overview for more details.

Price floor

See Price Floor.

When does a price ceiling apply?

To price an inventory item, Monsoon Marketplace first identifies the lowest Amazon competitive offer listing according to the settings in your default pricing strategy or custom pricing strategy. The lowest price is known as the target price.

Amazon competitive offer listing (item price + shipping) = the target price used to price an item

Note You can price eBay listings against the eBay catalog instead of the Amazon catalog although most Monsoon Marketplace users don't select this option, preferring to price against the much larger Amazon catalog.

After a competitive offer listing is identified as your target price, Monsoon checks your price ceiling. If the target price is higher than your price ceiling, the target price is adjusted to match the ceiling.

When a target price is adjusted to match a price ceiling, we say that the price ceiling is applied.

After a price ceiling is applied to the target price, the item's Amazon default shipping rate is deducted from the target price.

An item's Amazon default shipping rate is not deducted from the target price when an item qualifies for free eBay shipping and the Do not include default Amazon shipping check box is not selected. See How eBay pricing works.

Price ceiling steps

Each time an inventory item prices or reprices, its price ceiling applies as follows:

An Amazon competitive offer listing (or average of competitive offer listings depending on the settings in your default pricing strategy or custom pricing strategy) is identified. The competitive offer listing (item price + shipping) is used as the target price.
If you've set up a price ceiling and the target price is greater than the price ceiling, the target price is adjusted to match your price ceiling.
Next, the Amazon default shipping rate is subtracted from the target price depending on your settings. See How eBay pricing works.

Let's see what the steps look like when the competitive offer listing that's identified as the target price is $34.95, your price ceiling is $29.99, and the item's Amazon default shipping rate is $4.99.

Target price [$34.95]
Price ceiling is applied [$29.99]
Adjusted target price [$29.99] – Amazon default shipping rate [$4.99] = $25.00

Dynamic and fixed price ceiling settings

The price ceiling you set up in a custom pricing strategy is a dynamic value. A price ceiling set up on the Settings tab under Inventory Pricing (group level) or on the My Inventory tab (item level) is a fixed monetary amount.

When you set up both a dynamic and fixed priced ceiling, your system applies the lower of the two price ceilings.
When you set up a price ceiling in all three locations—as a dynamic price ceiling in a custom pricing strategy, as a fixed price ceiling at the inventory group level, and as a fixed price ceiling at the item level—the item level fixed price ceiling is always used. Between the dynamic price ceiling and the item level fixed price ceiling, the lower amount is always used.

Price ceiling settings:

As a dynamic value in a custom pricing strategy on the Settings tab under Custom Strategies.

As a fixed monetary amount at the group level on the Settings tab under Inventory Pricing.

Note Consistent with other settings that can be set at both the item level and group level, a value set at the item level overrides a value set at the group level.

If you make a change to your price ceiling on the Settings tab under Inventory Pricing and the price ceiling calculates as less than your price floor, one of the following three messages alerts you to necessary adjustments:

"Your price ceiling has been raised to _____ to match your cost of goods plus profit plus floor modifier."

"The value you entered was out of the allowable range. Please enter a value greater than or equal to _____."

"Price Floor _____ cannot be greater than your Price Ceiling. The Cost of Goods you entered cannot be higher than _____. Please adjust your Cost of Goods to be less than or equal to _____."

As a fixed monetary amount at the item level on the My Inventory tab.