How Clear Ads Helped a Cleaning Products Supplier Boost Profits by 20% with a Strategic Repricing Overhaul
13%
Margin increase in 1 month
15%
Sales boost in 1 month
5%
Profit gain on 70% of tests
Our Challenge
Sales were going well, but TACoS numbers were climbing and profitability was dropping. Their lack of dynamic price adjustments resulted in missed opportunities, lower margins, higher cart abandonment rates and difficulty in remaining competitive in a rapidly changing marketplace.
Project Overview
Our client is a leading cleaning products retailer in the e-commerce space, competing in a fast-paced market with slim profit margins. Despite having strong product offerings, they faced challenges in declining sales due to competition, a lack of new products, and seasonal product trends and the need to optimise pricing for better profitability became critical.
Our Steps
To address these challenges, we implemented a comprehensive repricing strategy that included:
Examples:
- The client sold premium products which at times put them at price points where they had no competition. We ran tests to see if customers were at all price conscious with those products by running A/B tests to see what price point was most profitable both short and long term.
- When testing our theories we didn’t just look at immediate profitability, we looked at a number of targets including the impact on page positions, CPC, sales velocity, conversion rate, and many more.
- We lowered the price of products between $10 and $12 to $9.99 to take advantage of Amazon’s Low Price FBA fee structure.
- In one case, the change only cost the client $.26 per unit in profit while providing a much more competitive price. As predicted, buyers loved the new price and the client tripled their profits on this product month over month.
- We carefully evaluated the conversion rates and sales velocity against competition and previous months in order to test higher prices on products that were performing well against the market.
- This led to a 30% increase in profitability across the targeted products with the best performer more than doubling in profits.
Results:
- 13% increase in profit margins within one month on targeted products
- 15% increase in sales volume in a single month on targeted products
- At least a 5% profit increase on 70% of tested products
