What does branded seller mean?
Another possible scenario is where a reseller buys and sells Nikon products on Amazon. That person is also a branded seller because the camera sold is still labelled under the Nikon brand name. Consumers that bought the camera recognized Nikon as the name brand where the retailer is simply regarded as a middle-man shipping them the item.
What does private label seller mean?
Although the seller doesn’t make their own products, they still privatised it with their own brand label, hence the word ‘private-label’! The private label seller will decide every element that represents the brand including packaging, labelling, products type, etc. Customers that bought the cameras recognised Morgan CAM regardless of where it was made.
Why does it matter for Repricing?
For branded sellers there is a direct competition among multiple sellers of the same brand. Using the same example, two different retailers selling the same Nikon camera may set different prices. From the consumers standpoint, the same brand means the same product, quality or features, thus price is now the only deciding factor. In this case, whoever offers the best price wins the sale. Competitors are also easily identifiable – those that sell the same product model of the same brand. Therefore, branded sellers on Amazon are most recommended to use competitor-based repricing.
On the other hand, private label sellers don’t have direct competition with other sellers. As you are the only seller of your own brand, price is just one of many factors for consumers when deciding if they should buy your product. Using the same example again, a Morgan CAM camera will not be regarded by consumers as having the same product quality or features offered by a Nikon camera. They are both cameras but they do not compete solely on price, given that both offerings are not identical. Hence, you could set a price much higher and still win sales because there are other factors of your brand that stand out. In this case, competitor-based repricing may not be an optimal choice because there is no direct price competition. Therefore, private label sellers on Amazon are most recommended to use velocity-based repricing.