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Amazon recently began reducing prices on merchandise sold by third-party sellers, ratcheting up its market share competition with discount stores, including Walmart and Dollar General.
The company has started to display a new tag, “Discount Provided by Amazon,” The Wall Street Journal reported on Sunday. Price cuts so far have been a little less than 10 percent on goods sold by independent retailers.
Amazon has been making the cuts unilaterally and absorbing the losses itself, in order to provide customers with lower prices on an increasingly important mix of products.
“‘Discount Provided by Amazon’ is another way for Amazon to provide the low prices customers expect,” the company said in a statement provided to the E-Commerce Times by spokesperson Cecilia Fan. “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.”
Sellers can opt out of the program at any time, she said.
Best Prices Anywhere
Amazon’s willingness to absorb the discount costs and pass along the full value to third-party sellers is a tactic designed to further a wider objective, which is to compete effectively in all major price segments, noted Cindy Zhou, principal analyst at Constellation Research.
“This is about offering a wider assortment through the third-party sellers, and ensuring they maintain price competitiveness as we enter the holiday season,” she told the E-Commerce Times. “This might spur new sellers to list on Amazon and further increase their assortment and reach.”
Marketplace sales have become an increasingly important part of Amazon’s product…