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Ali Lokhandwala

you are kidding me?

Published 3 months ago • 3 min read

Hey Reader,

Your ad spend is increasing but profits are shrinking. So you blame the ads.

Wrong target.

The real problem is your pricing strategy. When your pricing is weak, even the best ads can't save your margins.

Here's how to fix it:

1. Use MAP policies to stop price wars

MAP means Minimum Agreed Pricing. You set the lowest price anyone can sell your product for.

Without MAP, unauthorized sellers will undercut you by ₹200-300 and steal your customers. You'll be forced to drop prices just to compete.

With MAP, everyone sells at the same minimum price. Your brand value stays protected.

2. Price for value, not volume

Don't chase the cheapest price in your category. If your ergonomic chair costs ₹12,000 and competitors sell basic chairs for ₹8,000, don't drop to ₹9,000.

Instead, show why your chair is worth ₹12,000. Better materials, warranty, customer service. Let cheap sellers fight each other.

3. Track competitor pricing weekly

Prices change fast on Amazon. If competitors raise prices and you don't notice, you're leaving money on the table.

If they drop prices suddenly, you need to know why. Are they clearing inventory? Testing new strategies?

Stay informed, stay competitive.

4. Bundle products to increase average order value

Instead of selling just a laptop stand for ₹3,000, bundle it with a wireless mouse pad for ₹4,200 total. Higher transaction values improve your margins per order.

Customers get more value, you get better profits.

Fix your pricing before scaling your ads.

I've seen sellers spend ₹50,000 on ads with terrible pricing. Their cost per sale was higher than their profit per sale. More ads meant more losses.

Same sellers fixed their pricing first, then ran ads. Suddenly the same ad spend generated 40% more profit.

Because healthy margins come from the right pricing strategy, not from just spending more on ads.

Think about it - if you make ₹500 profit per sale with good pricing versus ₹150 with poor pricing, you can afford much higher ad costs and still be profitable.

See you then.

Happy building!

Ali Lokhandwala, India’s Top Amazon Expert

Once a champion, always a champion.

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Ali Lokhandwala

Once a Champion, always a Champion.

India's Top Amazon Expert | Generated over 50 Crore Revenue | Trained 15,000+ Entrepreneurs | I help businesses and entrepreneurs start and scale a profitable Amazon business.

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