Amazon Now Lowering Prices on Third-Party Seller Products
Amazon.com has quietly started lowering prices by as much as 9 percent in recent weeks on certain products offered by third-party sellers, according to a Wall Street Journal report published on Sunday. Until now, Amazon has controlled prices only on the merchandise it sells directly to consumers. Now, according to the report, it's discounting the items and covering the cost difference itself to ensure competitive pricing. This allows Amazon to sell the products at lower prices while still giving full price to its marketplace sellers. Amazon isn’t saying how it selects the items for discounting, but it told the WSJ that sellers could opt out of the program.
Total Retail's Take: The "discount provided by Amazon" strategy will enable smaller merchants to sell items at a cheaper price as the holiday season approaches. Amazon has been trying to compete aggressively on some items to win sales and draw customers away from low-priced rivals like Wal-Mart. Posting the items at lower prices, however, is angering some third-party sellers, especially those that have signed agreements with brands or other marketplaces to maintain a minimum price on the goods they sell through all platforms. Other merchants have criticized Amazon for devaluing their products with discount pricing. And for some, it's troublesome that Amazon is discounting their merchandise without even alerting them.