TECHNOLOGY

Online giant discounts third-party sellers’ merchandise as the holidays approach

BY Deena M. Amato-McCoy

Amazon introduced a new third-party discounting plan.

In a move to lure customers away from its competitors, the online giant is cutting prices of products sold by third-party sellers on its website. The move is designed to aggressively compete against low-priced rivals like Walmart, according to Reuters.

Amazon has already began slashing prices of certain merchandise — discounts that are as high as 9% in some cases. However, these discounts seem to apply to third-party sellers who ship their products through Amazon’s distribution centers, according to Fortune.

Amon the merchandise impacted by the discount are board games and technological gadgets. The e-retailer will sell the items at lower prices, and absorb the the discount amount — which still entitles sellers to receive full price from Amazon, Reuters reported.

An Amazon spokeswoman said in the report, “When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price.”

While some third party companies on the Amazon Services Sellers Forums are bullish on the program — especially if they are entitled to their full fee, not all sellers are happy with the decision. Some merchants have even complained that the decision “devalues” their products.

One seller hopes the move doesn’t devalue the merchandise, an issue that could find goods “relegated to bargain bins by playing the low price game. Discounting is a short term fix. Doesn’t fit into our long term plan,” the seller said on the forum.

“This new discounting decision is one of the strongest reminders that selling on Amazon is a privilege, like driving, and not guaranteed,” said Bardia Dejban, CTO of SMB e-commerce platform Volusion.

“This is bad news for third party sellers with their own e-commerce website because they are now competing on price against Amazon and other marketplaces,” Dejuan said. “The good news is,Amazon is covering the cost difference for third party sellers this time. But it makes me wonder if they’ll use the data collected to change their terms of service and pricing policies next year or sooner.”

Businesses can opt out of the program at any time, Amazon’s spokeswoman told Reuters.

 

 

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