Amazon Seller Discounts
Amazon is discounting the prices on items sold by Amazon sellers that sell through Amazon. Amazon itself is providing the discount so Amazon sellers don’t lose money.
Amazon’s customers and Amazon Sellers’ customers will get cheaper items. While Amazon sellers will still get the money they listed the products for. These issues were addressed in an article on Yahoo! Finance.
Such items are labeled as “Discount provided by Amazon,” marking a new policy that even many of the retailers aren’t aware of. “I do not know if this is new or if I just never noticed it before,” wrote reseller Rock Creek Gifts on Amazon’s seller forum. The discounts are less than 10 percent and appear to only be applied for sellers that use Amazon’s fulfillment service.
Amazon releases a statement about Seller discounts
And here’s an official statement from Amazon on the matter.
“When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price,” an Amazon spokeswoman said in an emailed statement, noting that businesses can opt out at any time.
Amazon is slashing prices for the Holiday Season
Generally, Amazon will slash prices on its own warehouse-provided products ahead of the holiday season to compete with other retailers who are promoting similar deals. FBA Amazon Sellers… this means you. This may result in more sales for Amazon’s items and less for the Amazon sellers that are not FBA. Now, Amazon is getting its third-party Amazon sellers in on the game.
Amazon is cutting the prices of products sold by other people, as the company desires the same effect to resonate around the whole operation. Reports indicate Amazon is lowering prices by as much as nine percent on some products without the consent of the Amazon sellers themselves. This may hurt Amazon Sellers who are also selling through their own websites and on other platforms.
Some Amazon Sellers are upset with Amazon’s direction
While Amazon Sellers still get the full price of the product that they had originally listed, some Amazon Sellers are upset that Amazon is changing the direct revenue from the customer without the permission of the Amazon Seller. Although Amazon Sellers are allowed to opt out of this process, some may not notice the change in time to do anything about it. Amazon is now taking away price controls from traditional Amazon Sellers in the same way that Amazon Sellers with Vendor Central accounts lost control over pricing.
Some sellers may also worry that this will lower the standard price range for their product, resulting in fewer sales for those sellers after the holiday season is over. The “devaluation” of a product is seen as dangerous for sellers, who worry that the customers will start to expect these lower prices on a regular basis.
Other sellers may be concerned that Amazon will play favoritism by only discounting the products of select sellers. Amazon has said that it will focus these discounts on certain types of items — likely on the items that are expected to see the most sales traction during the holiday season. BestSellerUSA from the Amazon Sellers Forums is worried about that very concept.
That’s also my concern. Amazon might provide discounted prices to customers for a selected group of sellers. Results: Some sellers see sales skyrocketing, others see sales sharp dropping.
The discounts might not help Amazon website traffic
Amazon may be inadvertently drawing people away from certain products on the website — the ones that aren’t being discounted. Since Amazon is focusing these price drops on “board games and technological devices” (examples provided by Amazon in the statement), other products on the website won’t see as many sales traffic. This effect may lead to customers visiting competing websites for their holiday needs, which is the opposite of what Amazon is trying to accomplish with the discounts.
Rushdie on the Amazon Sellers Forums also outlines a rationale behind not wanting Amazon to discount their products for them.
Because it devalues the product that you are selling.
If I offer a product for $100 on Amazon, $105 on my personal website and Amazon cuts that price to $75, Amazon has effectively devalued my product, by offering it for less than the price, I set.
It is completely irrelevant, that I will still receive the full value of the product, after all, fees, etc…, because Amazon has given buyers the PERCEPTION, that my product is no longer worth, $100.
Amazon would rather break even than let Walmart make a sale
As a company known for putting its customers first, Amazon would rather irk a handful of sellers and ensure that people continue using Amazon for their holiday shopping than have those same customers log onto competitors’ websites for their winter needs. There are plenty of sellers out there that won’t mind the change in prices and will still list their products on Amazon.
Amazon’s decision will help drive customers to its website, even if the company doesn’t see as much of the revenue since the products are from third-party sellers rather than Amazon warehouses. A sale on Amazon through a third party seller is preferable to a sale on Wal-Mart.
The end result of this move is fewer clicks away from Amazon.com, which is exactly what Amazon is aiming for. They want nothing more than to be the go-to place for online shopping needs.
Amazon seller discounts to compete with online giants like Walmart
Amazon is struggling to compete with Wal-Mart for holiday sales, and this attempted solution is an entirely new approach that takes advantage of the company’s sellers to solve Amazon’s problem.
This leaves some people asking questions such as “can Amazon do this?” The answer is: they already have. It’s up to sellers to react to the news. Sellers can either start listing products that Amazon would discount in order to compete in the holiday market, or they can move their business somewhere else. Neither option is likely to be appealing to most Amazon sellers, so the only answer for most will be to simply accept the move that Amazon has made and to continue about their business, hoping that the discounts don’t impact their sales in the next couple of months.
For now, this discount appears to only apply to holiday sales. It’ll be interesting to see if Amazon tries to do similar things down the line.
This article was researched and written by Anders Jorstad. Anders is a content creator Amazon Sellers Lawyer. Anders will be earning his degree in journalism from Hofstra and has five years of professional journalism experience. He has written for numerous online and print publications including SB Nation and The Hofstra Chronicle.