What is the Private Label Algorithm and what listings should I use it for?
The Private Label Algorithm uses AI to find the perfect price to maximize your profits while still maintaining sales. This strategy is made specifically for private label products.
You should not use this strategy for listings with lots of competitors and frequent price changes. The Private Label Algorithm is not designed to compete against competition directly and may not react fast enough to optimize sales. In a scenario like this, we suggest using one of our other strategies designed to compete directly against the competition instead.
How does it work?
The Private Label Algorithm is designed to allow your private label items to reprice efficiently by not only calculating a target velocity for you but by adjusting both your price and velocity to ensure that you can obtain the highest possible profit and continue to maintain sales.
Price changes on this strategy will be made once per day in an effort to ensure the previous price change has enough time to make sales and gather additional data.
For our Private Label Algorithm, if your listing is brand new or has insufficient data to allow the algorithm to make an accurate prediction on price, the algorithm will automatically raise or lower your price to hit your target, making the process more accurate by generating new data.
How do I set my target velocity?
If you have a specified volume you want to sell each month, you can add your target velocity to your listings so the Optimal Price strategy can target those velocities rather than our automatically calculated velocity targets.
It is important to note that if you add your own target velocities they will automatically override the automatically calculated target velocities our strategy is generating unless the custom target velocities have been removed.
You can add your Target Velocities in a few ways:
1. In bulk, using an upload template or custom upload
When creating an Optimal Price strategy, you will automatically be prompted to see if you would like to use your custom target velocities. If you choose to do so, you will be able to download a Set or Update Target Velocities template at that time that can be modified and re-uploaded to enter custom target velocities.
This template can also be found at any time on the Uploads page by clicking the "Download a Template" option and selecting the "Set or Update Target Velocities" template.
2. Individually on the Listings page
By clicking the pencil icon to open the listing edit window, you can manually enter a Target Sales Velocity and click Save to use that manual target velocity on the Optimal Price strategy.
You can also calculate your velocity by selecting "Calculate by date." When clicking this, a calendar will appear. You can then select a date in the future that you would like to sell out your current inventory by.
The "Target Sales Velocity" field will automatically populate when you choose a date. The number will reflect how many you need to sell over a 30-day period to sell out by the date you choose.
IMPORTANT: If you replenish your inventory, the target sales velocity will not automatically change. It will still be calculated based on the inventory level you were at when you first selected the date you would like to sell out.