Amazon wants to control third-party product prices
Amazon has launched a new program that gives it full price control over select third-party products sold on its marketplace
Amazon started inviting third-party sellers to a new program called Sold by Amazon (SBA) last week, describing it as a “new, hands off the wheel selling experience”, reports CNBC. Sellers who sign up to the program give Amazon permission to cut the price of their products at will, in exchange for a guaranteed payout called Minimum Gross Proceed (MGP), to ensure the discounts don’t result in an unexpected loss for them.
The new program could blunt criticism of Amazon’s pricing policy, which has drawn scrutiny for possible antitrust concerns.
Earlier this week, Bloomberg reported that Amazon’s current price policy implicitly forces some sellers to raise prices on non-Amazon sites because they don’t want to get kicked off its marketplace, which now accounts for almost 40% of the U.S. e-commerce market.
But sellers with SBA-listed products can now lower their prices on rival sites without fearing that Amazon will boot them from the marketplace, while also protecting themselves from massive losses.
“Sellers are giving up full control over pricing, and Amazon is lessening their anti-competitive liabilities,” said Blair Anderson, managing director of Anderson & Associates, a firm that helps merchants sell on Amazon.
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