Amazon Repricer - What is ChannelAdvisor REALLY calculating !!
Wed, 07/04/2012 - 11:40
Hi Guys n Girls,
I'm seeing this within the UK where VAT (Sales Tax) is used.
This has been ongoing for a while between myself and people at ChannelAdvisor. So this is what I've found so far.
The Amazon Repricer does NOT calculate any additional sales TAX or VAT on top of its repriced amount even though in your My Account > Company Information Section it states it does.
But more worryingly, do you understand the differences between margin and mark up? According to ChannelAdvisor it's just a word, but this will explain my concerns.
Within your Repricer rules it clearly states:
Limits prevent the Repricer from setting an item's price too low. Limits enforce a minimum margin for each item by using both the product cost and shipping price for each item.
BUT upon speaking to various people I have now been told that the Repricer is calculating on a percentage above your cost price, which is mark up.
Say I have a product that costs me 10p and I want to sell it through ChannelAdvisor at a minimum of £2.00 ex Sales tax.
If the Repricer worked on MARGIN as stated I would need to use a 95% MARGIN ......... BUT if as I fear, the Repricer uses mark up then at a 95% MARK UP the sale price would be 20p, to achieve the required £2.00 I would need to use 1900% MARK UP.
In a nutshell by assuming margin is calculated but mark up is used, on Amazon I would be paying to sell my item and making a negative gross profit and end margin.
For those that don't understand the difference try this ......
And then maybe then you'll realise you aren't actually protecting a minimum margin.
I would be very keen to hear everyone's thoughts on this !!