Amazon reminded sellers of its Fair Pricing policy after a story went viral about a woman who said she was charged $7,400 for shipping for some boxes of toilet paper. The woman said Amazon did not initially do anything about the excessive charge because it came from a third-party seller. After news outlets picked up the story in mid-May, Amazon reportedly refunded the woman.
On May 30th, Amazon sent the following message to sellers:
Reminder: Shipping rate policy for Seller Fulfilled items
This is a reminder to all sellers that the Amazon Fair Pricing Policy requires you to set fair shipping rates for your Seller Fulfilled items. Your shipping rates should reflect the actual cost of shipping and be comparable to the price customers would pay at other major retailers for a shipment of the same size, weight, destination, and shipping speed.
Shipping rates that exceed standard carrier rates by more than 20% will be considered unfair. Excessive shipping rates harm customer trust, and Amazon will remove the Buy Box, suppress listings, or in serious or repeated cases, suspend or terminate your selling privileges.
Please review your Shipping Settings to ensure that you are not setting excessive ship rates for expedited and premium shipping options.
One shipping expert told us sellers have wondered how Amazon would determine the standard carrier rate, since sellers have different rates for UPS and FedEx, not everyone has access to CPP (Commercial Plus Pricing) for USPS.
Amazon also prohibits sellers from setting excessive order fulfillment and shipping costs under its “Prohibited seller activities and actions” policy, found on Amazon Seller Central.
While we were researching the Amazon Fair Pricing policy, we found sellers discussing what appeared to be a crackdown on product pricing.
It’s fairly well known that Amazon doesn’t allow sellers to list an item on its marketplace at a price higher than they have it listed on other venues (known as the Price Parity clause). Sellers are now under the impression that Amazon is adding to that by stating sellers cannot list items at prices higher than other Amazon sellers.
“I fully expect to be held accountable for my own pricing, but how do you monitor your pricing as relating to every other offer on Amazon,” a seller asked on this thread on the Amazon discussion boards.
The issue sellers were discussing stemmed from the policy’s requirement dealing with multipacks. The per-unit price of a multipack ASIN must be equal to or lower than the price of a single unit of the same product. (Some sellers don’t list single quantities of the products they list in multipacks.)
The following is the full text of the Amazon Fair Pricing Policy:
Amazon Marketplace Fair Pricing Policy
Sellers are responsible for setting their own prices on Amazon Marketplaces. In our mission to be Earth’s most customer-centric company, Amazon strives to provide our Customers with the largest selection, at the lowest price, and with the fastest delivery—and Sellers play an important role.
Amazon regularly monitors the prices of items on our Marketplaces, including shipping costs, and compares them with other prices available to our Customers. If we see pricing practices on a Marketplace offer that harms Customer trust, Amazon may remove the Buy Box, remove the offer or, in serious or repeated cases, suspend or terminate selling privileges.
Pricing practices that harm Customer trust include, but are not limited to:
– Setting a reference price on a product or service that misleads Customers;
– Setting a price on a product or service that is significantly higher than recent prices offered on or off Amazon; or
– Selling multiple units of a product for more per unit than that of a single unit of the same product.
While the two Amazon seller policies referenced above mention shipping costs, they are not as specific as the notice Amazon presented to sellers last week.
It’s interesting to note Amazon’s Fair Pricing policy prohibits misleading reference prices. eBay recently placed restrictions on sellers’ ability to place items for sale (markdown prices) through its promotions manager tool, though it exempted some sellers. The new policy states: “Starting June 25, 2018, you must list your item for 14 calendar days at the same price before you can create a markdown sale event with Promotions Manager.”
It would seem both eBay and Amazon are concerned about sellers potentially engaging in deceptive advertising practices. Regulators frown upon the practice of faux markdown pricing.