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Tue Aug 6 2019 00:13:57

Amazon Accused of Pressuring Sellers on Price

By: Ina Steiner

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Facing scrutiny from regulators, Amazon eliminated its price parity requirement in the spring. The price parity clause had prohibited sellers from offering items they listed on Amazon at a lower price anyplace else. But the marketplace is coming under fire over its pricing policies yet again.

Amazon constantly scans prices on other websites, and according to a report from Bloomberg on Monday, "When it discovers a product is cheaper on, say, Walmart.com, Amazon alerts the company selling the item and then makes the product harder to find and buy on its own marketplace - effectively penalizing the merchant."

Bloomberg said Amazon does not tell merchant in those alerts that they must change their prices on or off Amazon, but merchants told the news agency they feel pressure to so. However, rather than lowering their prices on Amazon, in many cases they raise their prices on the rival website, Bloomberg reported (link to article via DigitalCommerce360.com). One implication: bad news for Walmart.

Amazon told Bloomberg that sellers have full control of their prices on and off Amazon, and said, "we help them maximize their sales in our store by providing them insights on how to be the featured offer."

The reason sellers may be tempted to offer different prices on different venues is because costs of selling varies from platform to platform. As we blogged on Monday, Etsy, which has one of the lowest commission fees among established online marketplaces has an average "take rate" of 16.5% - that's once you factor in all of the expenses, including the commission on shipping and advertising fees.

Amazon is an even more expensive marketplace on which to sell, sellers say, and competition is more cutthroat, putting the squeeze on seller profit margins.



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by: jimcooncat This user has validated their user name.

Tue Aug 6 02:51:21 2019

''makes the product harder to find and buy on its own marketplace'' -- As a third party seller on Amazon, the only thing I've seen them do is to suppress the buy box. That is, they don't show a featured seller and their price on the item page. The buyer has to click a link and then they see all the sellers with their feedback and prices. I believe this does dissuade less motivated browsers from becoming buyers, but I've no proof of that. I don't see them throttling my products in search like eBay does with my products.

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This user has validated their user name. by: Life During Wartime

Tue Aug 6 05:56:30 2019

''Etsy, which has one of the lowest commission fees among established online marketplaces has an average ''take rate'' of 16.5% - that's once you factor in all of the expenses, including the commission on shipping and advertising fees.''

Which explains nothing about why Etsy resellers, listing the same items sold by different vendors on Amazon. get much higher prices.  Amazon's customer base might be a lot of bottom feeders (dunno, I shop on Amazon rarely, for books).  Etsy's targeted customer doesn't comparison shop, and is eager to pay more than the market price for commonly sold items.

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This user has validated their user name. by: toolguy

Tue Aug 6 11:55:19 2019

OMG!

Is eBay going to copy EVIL Amazon?

If I were an Amazon seller this alone would drive me off their site. . . .This is even lower then eBay's antics. . . .

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This user has validated their user name. by: toolguy

Tue Aug 6 11:58:17 2019

Last year when I was buying on Amazon (got 1 free year of prime)

"The buyer has to click a link"

I NEVER clicked on that link. . . . .If it wasn't on the page I was searching I would never see it. . .

Amazon's page set up is just terrible. NO CHOICES (unless you click a link)

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by: mjr55 This user has validated their user name.

Wed Aug 7 01:31:20 2019

Oh, this is absolutely fact. If Walmart sells an item for cheaper, Amazon will not only will make it harder to find but they will take the buy box off the listing....even if you are 1000% cheaper than the other person selling it. Thus, Amazon will literally make sure no one can buy that item on Amazon.....I mean, how stupid? It's self-defeating.

Let's be honest....they do A LOT of shady stuff pricing-wise to pressure sellers.....whether it be how much their shipping can be, whether they remove buy box, etc.



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This user has validated their user name. by: RKTOYS

Wed Aug 7 09:15:31 2019

Amazon's take rate is almost 40% by the time you factor in stuff like signature confirmation that you need to not automatically lose every fraudulent A2Z claim.  You couldn't pay me to sell on Scamazon again.

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by: Whatever This user has validated their user name.

Wed Aug 7 10:53:53 2019

Just more reasons NOT to sell on Amazon - oh and since I don't sell there I don't buy there as well.  Better for me to stick to the devil I know and I actually still buy there and support other struggling sellers.

And etsy? no thank you - I hate that place - it's a shoppers nightmare trying to find anything

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by: mjr55 This user has validated their user name.

Wed Aug 7 23:37:18 2019

@rktoys....

That's just false information.

If you print shipping through Amazon, they now cover you on INR's without signature confirmation. This policy was changed a year ago. Plus, how does a $2.50 signature confirmation fee even under the old policy up Amazon's take from like 10-15% to 40%?

Be serious.

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by: cvsharkey This user has validated their user name.

Thu Aug 8 05:52:02 2019

It's not really that Etsy has one of the lowest "take rates." It's the Amazon has one of the HIGHEST "take rates." And it is unfortunate that they will set the bar for other marketplace venues.

Please don't forget to add in the "free shipping" that Etsy nearly insists that sellers offer so that they can even be found on the site. That cost will raise their "take." without it being visually seen by the shareholders. And it's all about the shareholders.  Sadly, it used to be about the sellers & the customers. That's what an IPO will do to a company's focus.

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by: Moonwishes This user has validated their user name.
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Thu Aug 8 08:53:27 2019

I have not noticed any price suppression on Amazon, but I will keep an eye out for it. The Venue that has the least fees of all is eCRATER. In the Ecommercebytes yearly survey, it comes in into the top 10 venues every year. It allows full and free communication between seller and buyer. They stay out of your business. They have some rules, not many, that you are expected to follow. If you don't follow the rules and for gross violations (counterfeit goods), you will get suspended or booted completely to the curb. I understand that it doesn't have the traffic that other sites do, but with having a lot more competent sellers come in and sell there as well, I think it would shoot up to be THE place to sale on. In the last eleven years, I  have sold almost 11K items between eCRATER and Amazon and I have sold more than $30K worth of items on eCRATER more than Amazon! Google in its love for playing around with sellers and whom we have never asked for help keeps making changes to the search engine which has affected eCRATER sales, but with self-promoting, some of that can be lack of sales can be negated.

As eBay slowly circles the toilet drain and Amazon is more of a King Kong and so welcoming of the Chinese sellers that 10 minutes, maybe 5, after being suspended are back up and running with 10's of thousands of items by using a different IP address.  At one point I found one that had taken over the car GPS systems with everything from crayons and sewing patterns and maybe a car GPS system. You would have thought that Amazon would have noticed that category ballooning up so quickly and to investigate why? But they didn't and so it took awhile before they were gone.

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by: topdog This user has validated their user name.

Thu Aug 8 09:49:52 2019

Amazon definitely charges a lot, but keep in mind two things. First, they bring sales - a LOT more sales than the other sites, and usually at a higher price (certainly more than on eBay). Second, while their take rate is definitely high, it's not so much higher than the other sites. I mean, would you be willing to pay Etsy another 5% if it meant selling 10x more items - and likely much more?
That said, Amazon has definitely become a monopoly. While they have competition, they have so much control of the marketplace, as well as of the entire supply chain and now means of delivery, that when they sneeze the rest of us get a cold. Yes, I could sell in other venues, but my sales would plummet so much that I'd likely have to find something else to do. That's just one example of their power.  

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This user has validated their user name. by: toolguy

Thu Aug 8 10:35:22 2019

Amazon does work for me!

eCrater is a ghost town for buyers

ETSY has no buyers!

Craigslist brings in 1 or 2 sales a month

eBay is still king in my house, I get sales daily!

eBay puts the food on the table and pays the utility bills.

None of the other sites can do that for me. . . .

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by: shut1968 This user has validated their user name.

Thu Aug 8 12:25:46 2019

Amazon gets 24-29% after all the fee's and monthly charge, and the race to the bottom kills almost all profit in categories they compete with sellers in.. I've seen amazon sell stuff for 10 cents over wholesale cost (and yes.. I know what they are paying we have the same source and they don't get any "volume discounts" from them).. so yeah.. they may have more sales but the profit margin is garbage..  if it weren't for the offset in the shipping credit opposed to the actual cost of shipping we would lose money on many sales...

Yes they suppress sellers on a regular basis, hide products listed for sale.. sometimes the buy box shows a seller with jacked up prices over the lower priced sellers and a few years ago they hid those links to "other sellers" by moving it to a spot on the page that is easily missed and making it so small it's more often looked over by shoppers..  If you didn't know how to look for other sellers in many cases you wouldn't know you had other options..

Amazon is on it's way down from a Marketplace standpoint, our Ebay sales have steadily increased over the past few years while Amazon has declined.. We are down 30-40%  from sales last year... Ebay just continues to climb.

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This user has validated their user name. by: RKTOYS

Fri Aug 9 16:22:59 2019

@mjr55
It's called math.

$20 toy
99c fixed fee
$3 commission fee (15%)
45c shipping fee
$2.50 signature fee

fees:  $6.94
item:  $20
6.94 / 20.00 = 35%

Policy changing a year ago doesn't help anybody hit by it up until then.  Also, please explain how a label printed by Amazon is magically more believable than a label printed by USPS when the package IS SHIPPED BY THE SAME SERVICE.

Be serious.

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by: dans parts This user has validated their user name.

Tue Aug 13 09:20:14 2019

Have had a lot of problems lately with Amazon "controlling" prices fpr FBA.

One item I've been selling - bought from WalMart (in store) for $1.98.  Myself and about 5 other sellers have been selling it FBA for $8.99 - $10.99 for the last 2 years.  I've been holding mine at $10.99, waiting for other people's stock-outs, and it was going just fine at $10.99 in those intervals.

Month & half ago, it fell victim to "Potential High Pricing Error", a day after 2 of them sold for $10.99, leaving the one remaining in Stranded.  Fought with them tooth and nail to try to get it back to Active, and finally, after a week of back and forth, it did go Active, although I'm not sure my pleas really had any effect.  More like whatever "bug" bot screwed things up was not looking any more.  Sent more in.  Sold more at $10.99.  2-3 weeks ago, same scenario - back to pricing error and last one in Stranded.  A day after another FBA item did the same thing.

Worked trying to get a price AZ would let it stay Active on.  $6.00 was the highest.  At $6.00, with the $.30 box and their fees, I lose $1.81 per item.  I don't think so.

All this is in the name of "creating a better buying experience for AZ customers"?  The only one selling this item now is one FBM for $14.99, plus shipping.

So, their "better experience" is either forcing customers to pay over twice as much?  Or going off-site to hunt for it?  And maybe, or maybe not finding it on Walmart.com?  I just checked walmart.com a minute ago, and this particular item (of dozens available from that brand) is the ONLY one marked "In-store purchase only".  I realize there is a possibility this might be because walmart.com is checking my IP address and seeing my local Walmart has it in stock, but maybe they aren't that intrusive?  Don't know.

The other item is one I buy for $.99.  I couldn't get that one to stay active even at $2.00.  You don't want to know my "profit" on that one at that price.  All the while there were FIVE other FBM sellers at $7.30 AND HIGHER on that same item.  To add insult to injury, there is now one FBA seller still active at $7.30 today, while mine got flagged at $6.00 the other day.

More phone calls now needed to the yay-who's at Amazon Support.  I really think they're actually worse than eBay's [non-]support staff.  And that's saying a lot...



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