Race to the Bottom? Amazon Introduces Repricing Feature

Large retailers have been using repricing features for years, and small online sellers have begun using these tools in recent years as well. On Monday, Amazon.com launched its own repricing feature on the manage inventory page - but many sellers are not happy about it, fearing it could drive prices on Amazon down even further and reduce their profit margins.

Amazon introduced the Match Lowest Price feature yesterday, allowing sellers to match the current lowest prices for items with at least one other listing. The current lowest price for an item is determined based on the sellers Low Price Comparison preference.

Many repricing programs have sophisticated rules so sellers are repricing against the same items in similar circumstances - and avoid repricing against their own inventory. For instance, repricing tools allow sellers to filter so they are only repricing against items of the same condition, or from certain sellers or types of sellers (sellers from a specific location, or with a certain rating or feedback score, for example).

Third-party repricing tools can also let sellers set minimum prices, or set the program to not let prices fall below cost or below cost plus a certain percentage, to ensure they maintain a certain profit margin.

However, Amazon's Match Lowest Price feature does not appear to have all of these rules, though it does give sellers the ability to restrict comparisons to items in the same condition and subcondition. An EcommerceBytes reader said the feature also fails to take into account the shipping differential between FBA and non-FBA listings.

Many repricing tools also allow sellers to set rules that allow them to raise prices depending on criteria they set up in the program, something that Amazon's Match Lowest Price feature does not offer.

Sellers who use repricing on Amazon had been waiting for clarification from the company after it made a change to its Product Advertising API policy in late July, and feared the changes would prevent vendors from offering repricing tools - see this article from EcommerceBytes Newsflash.

You can see some seller reaction on the Amazon discussion boards.