Three Amazon Seller Questions That A.I. Can Answer

by Victor Rosenman

artificial intelligenceNothing on Amazon stays the same for long. As sellers know, what might be in demand one week may not be in demand the next week. Trends and prices can fluctuate wildly from one minute to the next, and marketplace sellers must quickly make accurate business-critical decisions in this highly competitive environment.

How can Amazon sellers keep up? By using artificial intelligence, which can analyze market dynamics and respond to changing market conditions in real time. These iterative, self-adjusting algorithms rely on machine-learning technology to make important ecommerce business decisions. While online giants like Amazon, Walmart and eBay have used such cutting-edge technology for years, now ecommerce entrepreneurs can take advantage of it as well.

Here are three business-critical ecommerce seller questions that can be addressed with the help of AI:

How Much Should it Cost?

In ecommerce marketplaces, prices change frequently in response to market dynamics. Monitoring and adjusting prices, even for sellers with just a few hundred products, can easily become a full-time job. Moreover, strategic re-pricing is particularly crucial on Amazon, where sellers are constantly vying to win the coveted and lucrative Amazon Buy Box. To determine who receives this valuable piece of online real estate, Amazon utilizes sophisticated algorithms to assess merchants’ performance metrics such as ratings, reviews, shipping, pricing and quality of service. For these reasons, having a reliable re-pricing method on Amazon is absolutely crucial for serious sellers.

AI addresses this problem by re-pricing merchandise using complex learning algorithms that continuously assess market dynamics and changes in the competitive landscape. An algorithmic re-pricer does much more than set prices; it can also learn competitive moves, realize opportunities and optimize for profit.

How Much Should I Order?

Managing inventory on Amazon can be extremely complicated: Order too little, and you risk being out of stock, which can result in penalties from Amazon, negative customer reviews and missed sales opportunities. Order too much, and you increase business risks and capital requirements. Yet predicting what will be needed can be a challenge, since demand and competition change frequently on Amazon.

That’s where artificial intelligence and learning algorithms come in. By identifying key factors that impact the velocity of orders, they can accurately predict demand and plan inventory, thus avoiding stock-outs and overstocking. And the best part is, such programs get smarter over time.

What Should I Sell?

Assortment management is also a major challenge for Amazon sellers. They must decide which products to keep selling, which to add and which to discontinue. In order to do this effectively, sellers need to keep an eye on changes in demand, market trends and product competitiveness. It’s certainly possible for people to analyze the past performance of products, but history is not always a reliable predictor of the future.

Accurate forecasting requires an advanced algorithmic model that can assess all market factors, including the strength of your product portfolio. Amazon and Walmart have been monitoring their product assortment for years using a team of data scientists. Now, thanks to advances in AI and algorithmic technology, ecommerce startups can plan their product assortment using these advanced capabilities.

Final Thoughts

Artificial intelligence is unquestionably a game changer for ecommerce entrepreneurs, and unlocks value and optimization across all facets of Amazon businesses. Using big data, merchants can quickly and accurately examine their sales performance historically and, with the help of AI technology, forecast for the future as well.

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