According to a recent report by the Seattle Times, Amazon is pushing some of its top sellers to drop their prices to more effectively compete with other retailers. This includes prices for goods sold online and in the company’s brick and mortar stores. The act could present more anti-trust issues between Amazon and Uncle Sam.
According to the article: “Since early this year, Amazon has been telling some of the largest third-party sellers on its Marketplace platform they can’t list new products until they match prices offered by Amazon’s retail competitors, like Walmart, Target and Costco, according to copies of emails between seven sellers and Amazon seen by The Seattle Times.”
“The CEO of one seller whose ability to create new listings was suspended earlier this year said he believes Amazon’s pricing policy is anticompetitive, but, fearing retaliation, has not communicated those concerns to Amazon.”
According to the same CEO, “Amazon sellers are more scared of Amazon than the U.S. government.”
Amazon defends its actions by saying that it’s a necessary act to protect its “customer experience.”
On its face, the fact that Amazon is working backwards for the consumer to lower prices sounds like a good thing. However, the company does not simultaneously lower its fees to the affected manufacturers. The failure to do so could shorten manufacturer margins and lead to greater anti-trust issues with the U.S. Government. Charging the same Amazon fees to brands could also have the opposite effect of driving future prices back up or lowering consumer product offerings on Amazon. As always, we’ll continue to monitor this story and report back with updates.
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