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Tue Oct 18 2022 09:23:24

Can You Charge Higher Prices on a Costlier Platform?

By: Ina Steiner

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Should you be able to charge higher prices on the different channels on which you sell? And if it costs you more to sell on some platforms than others, should you be able to charge higher prices than on less costly platforms?

A seller raised the long-debated issue on the Amazon seller Announcement Board last week. They said that despite higher costs of selling through Amazon - including higher return rates - Amazon didn't let them charge higher prices than through other platforms.

Ironically, it appears Amazon itself allows a two-tiered pricing strategy on its own platform. 

The seller was responding to a post by Amazon encouraging sellers to explore offering a "business price" that "could be lower than your standard consumer price or include a quantity discount."

"Business customers tend to buy more and return less products, and in return they expect lower prices," Amazon stated in its announcement post.

The seller replied in part, "This would seem to be an admission that Amazon retail customers return more product, and as a result, our prices should be higher. Yet, we can't price higher on the platform,..."

Legislators have waded into the debate for years, and in 2019, Amazon eliminated its controversial "price parity" clause in its terms of use - but some say the marketplace uses other ways to ensure sellers don't offer lower prices on other channels. Last month, California's Attorney General filed a lawsuit alleging that Amazon stifled competition and caused increased prices through "anticompetitive contracting practices."

The Attorney General claimed Amazon uses its market power to raise its fees to sellers but prohibits them from offering lower prices on lower-fee platforms.

Amazon responded to the lawsuit writing in a statement: 

"Sellers in Amazon's store set their own prices for the products they offer. Amazon makes no effort to prevent them from offering lower prices elsewhere. But Amazon knows customers expect to find low, competitive prices in the Amazon store. Amazon, like any store, reserves the right not to highlight prices that are uncompetitive compared to other major retailers. When sellers set prices that are uncompetitive compared to these retailers, those offerings are still available to customers in Amazon's store, but Amazon does not highlight them."

Is Amazon a costlier platform on which to sell? And should you be able to offer your items for sale at different price points depending on the channel you sell?



Comments (14) | Permalink

Readers Comments

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by: gregtoys This user has validated their user name.

Tue Oct 18 12:18:32 2022

That Amazon statement is simply not true. I have tons of products that are not offered for sale because pricing. In the "fix your products" section, it states:

"Your listing may require additional steps to reactivate that are not currently displayed on this page. If your listing remains inactive after fixing the issue, please revisit this page later to check if additional steps are required to reactivate the listing."

It is specifically listed as a pricing issue and more so: "We have detected a potential pricing error. The price may be too high. Click Update Price to resolve."

My offerings are not available like they claim they are. I honestly think they are so big and disjointed that they have no idea they are making blatantly incorrect public statements.  

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by: papergoy This user has validated their user name.

Tue Oct 18 13:10:33 2022

Agree completely with the prior post- I have pricing errors for comic books that I'm asking $3 on, a buddy has a Lawrence Welk record he got a high priced alert for pricing it at $1.  They most certainly do NOT allow the items to stay on the site but lower visibility- they kick the items off and it goes against the seller.  When $3 on a comic book or paperback book from the 1970s is considered "high priced..."  One item, I was the lowest priced and had sold hundreds of them- they kicked all off the site (a comic book) due to potential high pricing error- given that I've sold a couple of hundred, buyers didn't seem to have an issue with the price (in fact, I'm selling at guide on the item in question).  They'd rather have NO sales than some sales?  Crazy.

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by: postbuster This user has validated their user name.

Wed Oct 19 06:28:12 2022

Forcing low prices is a sign to me that overall sales are slow for good 'ol corporate.

Ama-Z does this while having one of the highest seller fees on the market.

The scum in suits and ties are pushing a hard communism on their site.  Abusing a free market society while oppressing the sellers own profit range.  

They have no say in what price is on another site, business, state, country, or whatever these pretentious scum think is in their territory.
It's not even THEIR site anyway.

They were hired to work for a company just like everyone else.
And just like everyone else in the seller platform  business, they are scamming the sellers out of money.  Running ALL businesses into the ground, even the companies they work for.  
These people are parasites wherever they go.  Worthless, indignant, and demanding, they offer nothing for anyone.  They would take everything for themselves and leave desertion and famine for everyone else.

Let's see how bad the economy is if we loosen up all of these Lavish salaries that only waste everyone's time and creates more hardship.
Let the Real workers who DESERVE the money have it, and see how much better everything runs.

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This user has validated their user name. by: Marie

Thu Oct 20 02:44:29 2022

Amazon's bot needs SERIOUS programming help.  I get them deactivating one of my listings every now and again and the reason is my price is too high.  Which is simply not always true.  Some I'm the ONLY seller selling a new item, the others are used but the bot seems to think I should sell the new item for less than the used ones.

Over the years I've gotten these emails on items that I was NOT the highest price, others were higher than mine.  The only way I could get my listing to be active again was to RAISE my pricing.

There are other idiotic things this program does too.  It is simply far more harmful than useful IMHO.  I know it certainly doesn't work well for me.  

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This user has validated their user name. by: LasVagueness

Thu Oct 20 07:49:33 2022

I can't speak for Amazon as I do not sell on that platform, but I always jack up my prices on both Tradesy and Poshmark to compensate for their higher selling fees. eBay buyers get the best deals.  

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by: redheadedlady This user has validated their user name.

Thu Oct 20 09:32:42 2022

I don't feel bad for any of the idiots that sell on Amazon.  I don't sell on there and never have and NEVER will.  They are bandits.  I have found many things that sell on Amazon cheaper in stores and cheaper on other sites.  Why spend all your money on a junk site.  Woo-woo you get delivery right away.  If you need it that bad go to a brick and mortar.  Very easy.  I am so very glad I never started selling on there.  I just sit back and reap my profits without all the hassles those people have to go through.

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by: cvsharkey This user has validated their user name.

Thu Oct 20 11:10:34 2022

WHY aren't these policies considered "price fixing?"  

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by: Stone Cutter This user has validated their user name.

Thu Oct 20 11:48:02 2022

***What happened to a “Free Market”?***

I don’t sell on Amazon, I sell artisan jewelry on Etsy. I keep jacking up my prices and buyers continue to spend.  

I KNEW there would be a day when these online companies would price themselves out of the market by the absorbent fees they charge Sellers. And yet, I say, let the consumer decide what is too expensive.

U.S. economic data says that 50% of all online purchases begin at Amazon and end with Amazon. As a consumer, I love Amazon. Even if I pay a little more for a product, it beats driving around town, which wastes my time and gas. It now costs me $100 to fill my gas tank so there’s really no cost savings for me when driving around town for goods.

This past year, I’ve made 3 online purchases from smaller mom-n-pop websites and I’ve been burned! I’ve had to call my charge card company to reverse charges because products were never delivered. I know a site like Amazon has my back if Sellers do not ship products and I’m willing on paying a bit extra for that security.

The US. jobs market is still very healthy and the consumer is still spending. So what’s the deal here? As inflation continues, many economists believe a small recession will occur in late 2023, and those with good paying jobs will continue to spend. Also, the airline industry says “what recession” as consumers continue to spend a boatload on travel, rather than on goods which is what Amazon is concerned with.

Controlling Seller prices is ridiculous! Let the “free market” do its thing.  

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by: spooky This user has validated their user name.

Thu Oct 20 11:55:56 2022

I often list same item on both eBay and Facebook Marketplace. I always list higher price on eBay mostly to make up for the tax requirements as I now pay over 41% to the government on net eBay income

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by: gregtoys This user has validated their user name.

Thu Oct 20 12:25:11 2022

@Marie Amazon's bots fall victim to Walmart's gamesmanship over and over. When Walmart is out of stock, they still display their clearance price. This causes Amazon's bots to suppress Amazon seller listings. There are many other issues related to that. This is absolutely intentional on Walmart's part and why all marketplaces now use UPC/GTINs as the product identifier.  

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This user has validated their user name. by: Marie

Thu Oct 20 13:07:43 2022

@redheadedlady

"I don't feel bad for any of the idiots that sell on Amazon."
How RUDE and unnecessary is that?!?!?  While you may not like Amazon many do.  There is no need for name calling.  It says more about you than anyone else.

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This user has validated their user name. by: Marie

Thu Oct 20 13:11:12 2022

@Spooky

"I always list higher price on eBay mostly to make up for the tax requirements as I now pay over 41% to the government on net eBay income"

Reporting income over $600 to IRS is not just an Ebay thing.  It is legally required of ALL money processors on the internet.  41% is high, hopefully you can find some ways to cut that percentage down.  Good Luck.

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This user has validated their user name. by: Marie

Thu Oct 20 13:16:37 2022

@gregtoys

Thank you for the information.  There are so many things wrong with the Amazon Bot that there has to be more to it than that.  That doesn't answer why when other sellers have the item listed for more, my listing gets deactivated due to a pricing error.  It is the other seller that is wrong, if someone has to be wrong, which I do not agree with.  But yet unless I raise my pricing they won't allow my item to be seen.

I've seen the bots change the title of my listing to something that it isn't.  Then as icing on the cake, they did that to one of my listings recently and then deactivated it as it was a prohibited item on the site.  I have no clue how or why that happened.

It just does crazy stuff sometimes and it is difficult at best to get Amazon to pay any attention to it.  I've certainly had no success in getting them to see the problems.

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by: Sierra This user has validated their user name.

Fri Oct 21 23:44:37 2022

Are we not allowed to charge different prices on different sites? Is there a (U.S.) law here that I'm not aware of.

I sold on Amazon Handmade for a few years, mostly during the "price parity" days. And I didn't let that stop me.



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