|Thu June 28 2012 11:41:53|
Does Amazon Compete with Your Products on Amazon.com?
By: Julia Wilkinson
In an interesting article in the Wall Street Journal yesterday, while sellers report an average 50% increase in sales when they join the Amazon Marketplace, some small Amazon marketplace sellers feel Amazon is competing with them on specific products, even to the point of using the site "as a vast laboratory to spot new products to sell, test sales of potential new goods, and exert more control over pricing."
In one example, seller Jeff Peterson of sports merchandise company Collectible Supplies, Inc., was selling up to 100 "Pillow Pets" (modeled after NFL mascots) a day at $29.99, until Amazon itself began offering the pillow pets for the same price but with the featured placement known as the "buy box." Peterson said he kept lowering his price, but Amazon "would always match my price or go lower until I eventually gave up" and set it at the manufacturer's suggested price. Currently Amazon was selling a Baltimore Ravens Pet for $12 with free shipping, according to the Journal, but Peterson has bumped his price up again to $29.99.
But selling on Amazon holds great appeal for many sellers, with its approximately 85 million unique monthly visitors, which is 45% greater than eBay Inc., and "nearly 7-fold more than Sears Holding Corp., both of which host their own third-party marketplaces," the Journal reports, according to ComScore data. (The Sears Third Party Marketplace is at https://seller.marketplace.sears.com/).
As an Amazon seller myself, I see one of the biggest problems as the constant bottom-feeding on prices, which can be difficult to keep up with, even if you have an automated repricer tool, because the condition details of what is ostensibly the exact same product, such as a collectible book, can vary so much. However, I now make a good deal more money regularly on Amazon than I do on eBay in terms of the media categories I sell in. Personally, I haven't seen Amazon compete with me on the types of products I sell, which are usually vintage books and other types of media.
Have you felt this double-edged sword of competition from Amazon itself on your products? What percentage of your sales come from Amazon, if you sell on multiple marketplaces? Or is all this competition just an expected part of doing business anywhere? Post a comment here!