I'm not making any big claims for this. I ran a tiny test simply because I was curious. A longer test, a test with more listings or different listings, etc, could well have a very different result. But, for what it's worth:
I chose four items, more or less at random. (Same ones I used in the last test I did) All long tail, single quantity items, none with watchers , and frankly, none with a high expectation of selling at the current price, regardless of PLS. They are long tail, not "hot" items. The objective was NOT to get them sold, just to test the rates.
OK, so I chose 4 items. I ran the PLS campaign from July 10th to today, July 19th. Nothing sold, which was fine. As with the last, shorter test, impressions increased daily, this time I also did get a few views. But again, I was testing rates, not testing the success of a campaign.
I used the dynamic rate tool. I set the cap at 20%. I did not use the plus/minus tool.
On the day I listed, the recommended rates were : 1 at 7%, 3 at 11%. (note---the first test ended on the 9th, and the rates then were 7%, 10% and 2 at 11%...so there was one increase, from 10 to 11%)
Remember, my cap was 20%.
Later on the 10th, I reduced the price of each item by 10%. This was the purpose of the test---to see what effect (if any) reducing the item price would have). On the 13th and the 16th I did the same---reduced the price of each item by 10%. I made sure there were a couple days in between, because I figured it might take more than a day for any impact from the reduced price to be felt.
The rates on the 11th were unchanged, on the 12th the 7% item went to 8%, however, on the 13th, before I again reduced the item price, the rates changed, with all 3 11% items going down to 9%. (The 8% remained the same). On the 14th, the 8% item went to 7%, and on the 14th and 15th the 9% listings were the same, but 8% went to 7% and then 7.1%. On the 16th, before I made the price reduction, they were at 11% , 7% and 2 still at 9%. Since then, the 11% has remained stable, the 2 9% listings have as well, and the 7% went from 7 to 8 for two days but back down to 7% today.
Again, a tiny test. Initially, it did seem that the price reduction might have prompted some rate reductions, but that might have been nothing but correlation, NOT causation. The algo is complex, and , while perhaps larger price reductions might have a clear effect (or might not), I'd guess that price reductions alone won't necessarily reduce the rate.
I can say this, over a period of ten days, the fluctuations were relatively modest, with some going up or down by one percentage point, and with some going up or down 2 percentage points. Again, as with the first test, my rates never came close to the cap of 20%.
So, I can't really say that reducing the item price definitely moves the needle on the rates. I can say that rates go up and down, and , in this case at least, never came close to the cap.
