|Thu Aug 5 2010 15:53:16|
Amazon Asks Shoppers, Who Has the Lowest Prices?
By: Ina Steiner
Amazon.com wants its brand to be associated with low prices, and now it is soliciting shoppers to help it gather competitive pricing data. Amazon.com asks customers if they've seen products elsewhere at lower prices, and asks them to report exactly where they've seen them, online or offline.
On Amazon product pages, a question appears, "Would you like to update product info, give feedback on images, or tell us about a lower price?" When shoppers click on "tell us about a lower price" hyperlink, a dialog box opens. Shoppers select either "Website (Online)" or "Store (Offline)" and then fill out a form with the price, date and location of the online or offline store that offers lower prices.
Amazon explains, "Although we can't match every price reported, we'll be using your input to ensure that our prices remain competitive."
It's not clear exactly how Amazon uses this data, but it is unusual. Some third-party Amazon sellers may even be concerned about the practice, since Amazon.com requires them to adhere to its "General Pricing rule":
You must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer or sell the item via any other online sales channel.
However, Amazon is more concerned about price parity with brand name retailers, and it would be reasonable to assume Amazon.com would be more concerned about hard-to-find items than common items, where competition naturally lowers prices.
It raises an interesting issue: what is the best pricing strategy for multi-channel sellers? Do you offer lower prices on your own website and charge a premium when selling on all or some marketplaces? Does competition force you to lower your prices on marketplaces, or does it depend on what you're selling?
And should a marketplace be able to dictate that you not list at lower prices on your own website?