Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Nov 22 2012 12:14:08

Pricing Matters on Amazon

By: Ina Steiner

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No one is more acutely aware of the complexities of pricing than third-party sellers on Amazon. Today, the New York Times Bits blog suggests Amazon is raising the price of its books, and wondered why.

"Another possibility," it writes, "Amazon is intentionally pricing its books higher so buyers will instead purchase from the cheaper third-party sellers, which are more profitable for Amazon. In other words, Amazon would rather run a mall or bazaar than try and be Wal-Mart."

That runs counter to the many merchants' belief that Amazon actively competes with them, some believing Amazon goes so far as to identify popular products supplied by 3P sellers and start selling those items itself.

Bits wrote, "Amazon executives say the price of a book falls as it sells faster," but that seems counter-intuitive to retail philosophy. It's when demand for a product diminishes that retailers tend to slash prices to move them off their shelves, aka clearance sales.

In fact, pricing is much more complicated than that, and that's where repricing programs come into play. Retailers use business rules so tell software to adjust prices automatically depending on business conditions, usually setting ceilings and floors to help ensure prices don't get too out of whack. (Repricing tools can be stand-alone programs or part of inventory management tools - see EcommerceBytes Ratings and Reviews chart.)

Amazon told the Times that, generally, it wasn't raising prices. Who better to answer that question than sellers - what are your observations about Amazon pricing? Are prices going up in your category?




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Readers Comments

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

This user has validated their user name. by: permacrisis

Thu Nov 22 13:01:24 2012

Haha ebay. Maybe Amazon wants YOUR model. Time to get your clock cleaned!

And happy Thanksgiving to the auctionbytes gang.

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: Patricia This user has validated their user name.

Thu Nov 22 13:37:07 2012

I know one thing Amazon has raised outrageously...the price of Kindle books!  I stopped buying them when they suddenly got higher then hard cover versions!  Buying the used paperbacks again has suddenly become attractive!

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: Bloggo This user has validated their user name.

Thu Nov 22 15:40:32 2012

"A primary key to the success of mammals is their ability to adapt to and occupy a spectrum of environments" = Amazon

"The dinosaurs couldn't adapt and eventually died out" = eBay

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: pace306 This user has validated their user name.

Thu Nov 22 16:48:03 2012

Amazon raises prices on alot of things not only books, when:

1) they cant get a sweetheart deal from the maker - in order to own the market

2) when an item is too competitive (ie 65 people selling the same item when theres no moeny in it)

3) too many people in the item in FBA

Simply put, the %8-12 VIG made on the 3p sellers is sometimes MORE then they would make themselves. If its not a cache item or something they sell BILLIONS of, why lay out the cash when a 3p seller will?  (so they dont!)

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

This user has validated their user name. by: Al G

Thu Nov 22 19:47:22 2012

Gotta love it!

Well, it keeps the entrepreneur sellers hopping & hoping. Not a bad thing, 'cause we wouldn't be in the business if we didn't perceive a chance for profit as a Ferengi friend once told me.

Otherwise, we would be in the corporate grind where the CEO gets the perks & the peons work on Thanksgiving.

May everyone have a fine post-tryptophan (sic) ennui - except for the vegetarians dealing with Chinese mock Turkey (actually very, very good).  

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

This user has validated their user name. by: Ming the Merciless

Thu Nov 22 23:26:53 2012

Does anyone here seriously believe that Amazon is a more trustworthy platform for the health and welfare of 3P sellers?

I think not.

They are becoming more like ebafia everyday.

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: MADandCracked This user has validated their user name.

Fri Nov 23 04:24:52 2012

As a buyer, sometimes you pay a higher price to do business with a more trustworthy seller. I work at one of their fulfillment centers and I can tell you that people are definitely buying! 60 hours a week is very hard work and I'm so glad there is Amazon :D

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

This user has validated their user name. by: eBankrupted

Fri Nov 23 04:30:11 2012

Amazon knows how to deploy race to the top pricing; while ebay is stuck in destroying sellers with race to the bottom 'casino' search odds.

Since 2007, ebay has never considered the benefits of a financially healthy seller base, because JD wants to gut you all.

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: wallflower This user has validated their user name.

Fri Nov 23 08:42:05 2012

I put a $19.00 item, a gift for my son, in my cart on Amazon on Monday. When I added the rest of my order and went to checkout on Wednesday, the $19.00 item had gone up to $24.00. Sold by Amazon, not a 3P seller. So irritating! I'm going to keep  another in my cart and see if the price changes again.

I did buy everything on my list at Amazon, it was all cheaper than on ebay, even with Amazon's free shipping. Even that item that went from 19 to 24 dollars was cheaper on Amazon than ebay.

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

This user has validated their user name. by: Nolle

Fri Nov 23 09:32:39 2012

Unlike prior years where I bought all of my expensive (over $100) items on Amazon, this year I found the best prices on retail sites running fabulous deals - all with free shipping too.

My list so far -
Walmart.com, Radioshack.com,Officemax.com

Only deal I found on amazon was for an xbox game.

Used ebay for cheap accessories (all less than $10 each).

Such a switch form years past, where I spent most on Ebay, then a shift to Amazon, now the retail sites...

Perminate Link for Pricing Matters on Amazon   Pricing Matters on Amazon

by: golm51 This user has validated their user name.

Fri Nov 23 10:38:50 2012

i challanged ebay on all this. and what do i get suspended for no reason at all they are just suspending sellers left right and centre for no reason at all and all you get is a lame excuse as to why the are supending you but the private selers are imune it all falls on the registered accounts and yes they are capping your account trust me this has come from somebody that workes inside ebay there will be no auctios soon it will go the way of mazon and will be harder to get a account i rest my case  



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