Have You Received a Price Parity Policy Warning from Amazon?
Have you received a “Your Amazon Seller Account: Policy Warning” that details two products that have the pricing issues when compared from your Amazon selling account to your website? If so read on and if you haven’t yet, it appears Amazon is doing the rounds.
Update: You’ll also want to check this article out as Amazon are now notifying businesses that are falling behind on their response times Amazon Policy Warning For Buyer-Seller Contact Response Times.
I’ve seen this a couple of times so far this year already (and several times last year too) and after the concerned email yesterday, its about time I cover this in more detail. We all know that price parity across all sales channels is ni-on impossible and I’ve included some practical advice at the end of this article on how to tackle this issue.
I’m sure 99% of you are not well versed in actual agreement that was agreed to when you first started selling on Amazon and in my breakdown the price parity that Amazon expects isn’t going to be pleasant reading, hence the inclusion of some suggestions.
The Amazon Price Parity Policy Warning
There are numerous policy warnings you can receive as a seller on Amazon (frankly none of these are good) and this article is focused towards the price parity warning titled “Your Amazon Seller Account: Policy Warning” that is being sent out by Amazon to sellers ‘Performance Notifications’ section of your seller central account.
An Example Policy Notification
I’ve stripped the product details from this notification to ensure the sellers details remain anonymous, however I will be including ‘example’ prices as we’ll need these later in the article.
An example of an Amazon Policy Warning Price Parity Notification
Its also worth noting that for two of the notifications I’ve seen so far, Amazon have quoted prices from Amazon Webstores, which is there website offering so this doesn’t just apply to sellers using 3rd party websites, this also applies to sellers using Amazon’s own website product too.
The text version of this notification is below and I’ve highlighted several sections in bold as we’ll be looking at these later in conjunction with the Amazon agreement.
Greetings from Amazon,
We are writing because it has come to our attention that some of listings may be in violation of our policy concerning price parity. Customers trust that they’ll find consistently low prices and other favourable terms on Amazon. To help preserve this trust, we generally require that sellers who choose to sell products on Amazon not charge customers higher prices on Amazon than they charge elsewhere. For products you fulfill, this typically means that both the item price and total price you charge customers for a product on Amazon must be generally at least as favourable as the item price and total price you charge customers on other sales channels.
– The “item price” of a product generally means the price of the product itself.
– The “total price” of a product generally means the total amount payable by a customer for that product, including discounts, rebates, promotions and shipping.It has come to our attention that some of your listings do not abide by this policy. Example listings are provided below. Please review all of your listings to ensure they abide by this policy.
For more information, please refer to Section S-4 (“Parity with your Sales Channels”) of the Amazon Services Business Solutions Agreement, available in the Policies and Agreements section of seller Help.
We appreciate your cooperation and thank you for selling on Amazon.
Regards,
Seller Performance TeamExample listings:
Example ASIN: < ASIN 1 >
ASIN Title: < Product Title 1 >
Date: < Date > (London, UK)
Total price on Amazon.co.uk: £65.19
Total price on <Website>: £59.49Example ASIN: < ASIN 2 >
ASIN Title: < Product Title 2 >
Date: < Date > (London, UK)
Total price on Amazon.co.uk: £10.96
Total price on <Website>: £8.99
Understanding the Warning
So lets cut the crap here and understand that Amazon want you to have your products listed on Amazon at the best prices possible, including their commission of sale and this is their way of pointing out that on some of your products that there is a difference and they don’t like that.
So picking up on the two points from the Amazon notification email:
– The “item price” of a product generally means the price of the product itself.
– The “total price” of a product generally means the total amount payable by a customer for that product, including discounts, rebates, promotions and shipping.
They’re not holding back here and want to factor in all the factors to the total price “including discounts, rebates, promotions and shipping” (which is part of the agreement I cover in a few moments), so if you’re running say an email marketing campaign with a special promotional code, according to Amazon, you should adjust your prices to match this offer (more on this later).
Its also interesting that they’re quoting the “Amazon Services Europe Business Solutions Agreement” in the notification and explicitly the section S-4. The full agreement can be found on the Amazon website here.
I have included an extract below (correct at 29 Jan 2011) of the policy section S-4 and this is in bold and my own comments are in the quote bubbles.
S-4. Parity with Your Sales Channels
Subject to this Section S-4, you are free to determine which of Your Products you wish to list for sale on a particular Amazon Site.
So you’re able to choose which products you list on Amazon and which products you don’t. (That’s nice)
You will maintain parity between the products you offer through Your Sales Channels and the products you list on the a particular Amazon Site by ensuring that at the applicable Selling on Amazon Launch Date and thereafter:
(a) the Purchase Price and every other term of offer and/or sale of Your Product (including associated shipping and handling charges, Shipment Information, any “low price” guarantee, rebate or discount, any free or discounted products or other benefit available as a result of purchasing one or more other products, and terms of applicable return and refund policies listed on such Amazon Site) is at least as favourable to users of such Amazon Site as the most favourable terms upon which a product is offered and/or sold via Your Sales Channels (excluding consideration of Excluded Offers);
The selling price for your products must be at-par or more favourable to Amazon buyers when compared to your other selling channels.
(b) customer service for Your Products listed on such Amazon Site is at least as responsive and available and offers at least the same level of support as the most favourable customer services offered in connection with any of Your Sales Channels (provided that any such customer service will at all times be conducted in a timely, professional and courteous manner) (this requirement does not apply to customer service for payment-related issues on Your Transactions, which we will provide); and
Customer service should be uniform across the channels. That’s an assumed factor.
(c) the Content, product information and other information under Section S-1.1 regarding Your Products listed on such Amazon Site that you provide to us is of at least the same level of quality as the highest quality information displayed or used in Your Sales Channels. If you become aware of any non-compliance with (a) above, you will promptly compensate adversely affected customers by making appropriate refunds to them in accordance with Section S-2.2.
Read this section twice. That’s right, if there is a price difference between your sales channels and your Amazon sell price for a completed purchase is less favourable to an Amazon customer, then you are expected to compensate ‘adversely affected’ customers.
From my notes later in this article, it appears that this threshold of ‘adversely affected’ is a 9% or greater difference between Amazon and your other sales channels.
For Amazon-Fulfilled Products, we acknowledge that if the shipping and handling charges associated with the sale and delivery of any of Your Products listed for sale on such Amazon Site are included in (and not separately stated) the purchase price listed for Your Product on such Amazon Site (collectively a “Shipping Inclusive Purchase Price”), then the parity obligation in (a) above will be satisfied if the Shipping Inclusive Purchase Price and each other term of offer and/or sale for the product on the particular Amazon Site are at least as favourable to users of such Amazon Site as the purchase price and each other term of offer and/or sale for the product (including any and all separately stated shipping and handling charges) pursuant to which the product is offered and/or sold via any of your sales channels other than the particular Amazon Site.
FBA is a special case and they’re acknowledging that there are other costs associated for sellers for this method, but is still to be factored in when it comes the first part (a) for price parity.
Where Did Amazon Obtain the Prices From?
Please understand that because almost all of the notifications I’ve seen have come from different website products, then someone from Amazon has quite likely been through your website manually to check these prices. Also from the emails I have copies of, two use the Amazon Webstore product. Even if you use this to run your website selling activities, you’re not immune.
Note: Amazon could of course used ‘Google Shopping’ to check the prices. But because of one of the prices quoted in one of the notifications, I don’t believe this is the case or if they are, they’re manually verifying on the sites.
While a date stamp is included, no time is included. Which is a shame as we would been able to pin-point exactly the source of the user agent used to check the prices on the external website, but is also a point we shouldn’t overlook as, its an exclusion that can be used as a battering point because most businesses use repricing software for the channels and it could be easy to argue that between software updates, that the prices are likely to be out-of-sync with each other across the sales channels.
The Threshold for ‘Adversely Affected’ Prices
This is a curious one, as what actually constitutes as ‘adversly affected customer’? This is where having a unique view across different businesses comes in really handy.
I’ve looked through the notifications, taken note of the percentage differences between the Amazon price and the website selling prices and there seems to be a correlation between them.
Using the Amazon 15% commission range as a common key across the notifications, in all the examples I have, the selling price difference is 9% or higher between the price being stated that was on Amazon and the price being stated.
To be fair to Amazon, in pretty much all cases the selling price difference was a lot higher than 9% more on Amazon compared to the businesses website and on several of them, the prices had a difference of over 30%. So if you’re asking yourself is this warning warranted, it probably is!
Reality Check
I personally see the policy warning as a poke from Amazon to say:
“hey you’re prices are out, can you keep them in-line with us please”
While I understand why Amazon would like to ensure that their prices are the most competitive for their customers, even in their own agreement they’re using terminology that allows for some lea-way in the pricing between selling channels such ‘adversely affected’ and the term ‘generally’ is used twice in the notification itself.
It appears that this definition of ‘generally’ is in the region of a 9% or greater price difference between Amazon and another sales channel and as per my comment earlier, in the cases I’ve seen so far, the examples given were a lot higher than just 9%, with several over 30% and looking at a per SKU level, maybe the pricing is out and the warning was founded.
I’ve not seen (as of yet) Amazon do a re-run of a price parity check on accounts, however if they were to, I’m sure if you or Amazon dig deep enough into any business that is using more than one sales channel that you’ll find a difference in prices.
Whether Amazon actually take this further than my interpretation of it being a reminder to “play fair”, only Amazon know. As such, I’ve put together some suggestions that you should find useful, no matter what your account size or back-end software:
- Use the Amazon selling price as the website price
Now before you scream “NO WAY!” at this as you’re likely to command a better price on the website than on Amazon, remember the reach that Amazon has to potential customers and even if you do your best to keep within say a 9% window of price differentiation, Amazon is most likely a far larger sales channel than your website, probably for eternity. - Export & Cross compare Prices in Excel
As the likely hood is that there are you’re using a variety of different software platforms to run your websites from I’ve not included an excel example, however the process is really straight-forwards, IF you have used the same merchant SKU over your channels or another key that allows you to cross compare your inventory from different channels.An example would be to use eBay File Exchange to export your eBay listings, an Amazon ‘Inventory Report’ export from the “Download Inventory File” section in Seller Central and also an export from your website. Then using the VLOOKUP function in excel (see this link on YouTube for examples) to cross compare prices and run as a percentage in a column extra. - Repricing Software
With almost all decent repricing software for Amazon, you are able to set an ideal selling price, a minimum and also a maximum too (if it doesn’t Google ‘channel max). Ensure that these are taking into account your website prices, so that you try and keep within the 9% window or maybe… work the prices backwards to your website. - Percentages!
Its really easy for anyone (like Amazon or a customer) to point the finger and say “well for that SKU the price is different”. What I would suggest as a practical measure is that you point out to Amazon (probably not best done to a customer though) is that if you cross compare the prices globally across you selling channels (using the tip above) that “on average” the selling price differences between the channels are within X window and that if they look at individual cases, then they’ll always find fault. But as a overall picture it should be relatively easy to prove that you do keep your prices in-two with Amazon’s expectations
Your Feedback
And finally:
- Have you received this notification too?
- Have you spoken to Amazon support regarding this, what was their reaction?
- Did you make any changes to your pricing?
Let me know in the comments box below.
http://www.bbc.co.uk/news/business-23881202
Now let’s hope the same comes to the travel industry.
I see people are still leaving comments about price parity after it no longer exists. The OFT recently sent out emails saying their investigation was over as Amazon have withdrawn price parity.
Howdy Martin,
Ah I didn’t see any update from OFT via email, just the nudge from John that to that article on the OFT site.
Anyway…. it’s gone, YAY! :)
Matt
What is wonderful about this story is amazon breaks it’s own policy by selling items at different prices it’s own sites, there is price graphs here comparing amazon across Europe. Huge River amazon price tracking Amazon UK and amazon.de seam to be the cheapest.
It looks like Amazon just lost its right to price parity in Germany.
http://de.nachrichten.yahoo.com/amazon-gibt-h%C3%A4ndlern-mehr-spielraum-preisangabe-152853986.html
Good news for you guys I reckon.
The funniest thing about Amazon’s rule is there prices are often lower on a another Amazon site, so they break there own rules!
Here is a some examples!
http://www.huge-river.com/product/B000NDGNCS
http://www.huge-river.com/product/B000GETVAA
You can go though this site and find them all day!
I disagree that Amazon forcing you to maintain price parity, particularly for larger price differences, has some justification. Amazon don’t maintain price parity themselves, so why should they expect you to? They own Book Depository and frequently use Book Depository to undercut their own prices by large percentages.
If we do as you suggest above we are breaking eu and uk law
Anti-competitive agreements
Chapter I of the Act and Article 81 of the EC Treaty prohibit agreements between businesses that prevent, restrict or distort competition or are intended to do so and which affect trade in the UK and/or EU.
Agreements likely to be prohibited include those which:
• fix the prices to be charged for goods or services
• limit production
• carve up markets
• discriminate, eg, between customers (eg, charge different prices or impose different terms where there is no difference in what is being supplied).
Best solution I have found is to report amazon to the oft at [email protected]
You can ask to be anomanous. Forward them the copy of the email and where to find Amazon’s policy.
They are abusing their dominant position in the marketplace to reduce and stifle competition and this should not be allowed to continue.
Upon receiving our first warning back October 2011 we first contacted Amazon about there anti xompetitive bahaviour and possible illegal activites to which we had a response that totally ignored eveything we said and asked (not really a huge supply).
At this point we made contact with the OFT who said to send them all the information but from what we discussed on the phone didn’t think it would be worth pursuing form one complaint. But about 2 months after first reporting the issue (Jan 2012) we received a letter from the OFT saying that they were actually going to investigate our claim. We have not heard any more since then but I believe these things take months to progress. Watch this space!
It’s definitely worth pursuing with O.F.T. If it’s illegal they’ll take it seriously whether there’s one complainant or many. Skoosh was the only complainant here: http://www.bbc.co.uk/news/business-11330463
The OFT are investigating. Their investigations take a long time, so Amazon will get away with this for quite a long time. The OFT don’t understand much about ecommerce, so though its patently obvious to most people that price parity is a form of price fixing, which is illegal, the OFT could well decide that it isn’t.
Amazon’s marketshare (of UK online business) is already higher than that of any supermarket’s share of store-based business, yet Amazon’s takeover of Book Depository was waved through with the justification that the Amazon marketplace offers sufficient competition to Amazon itself. This completely ignores Amazon’s complete control of that marketplace and ability to manipulate it to their own ends. They can endanger the business of any marketplace seller whose field of business they wish to take over through predatory pricing or changes to the way items can be sold. They have access to all the sales data of marketplace sellers and can work out who is worth targeting.
An interesting fact that illustrates Amazon’s mentality is that they claim that customers can leave feedback because it helps to improve customer service. Oddly, they don’t want to improve their own customer service by allowing their customers to leave them feedback. A look at Google reveals why. Their customer service is actually pretty poor (less than 95% positive). Most good UK based sellers (overseas sellers tend to get more negative feedback) manage 97-99% positive feedback. Rather than use feedback to improve their customer service Amazon prefers to use marketing hype to create the illusion that their customer service is excellent … and most people believe it!
Would it be possible to start selling X with every product on your website, (X is something really cheap) and so your products are now widget + X and so it’s a different product which would make it a different product to Amazon’s which can be sold at a different price?
Hi Bob,
LOL. Yes I suppose technically they would be different products, I’m not sure how well it would go down with Amazon’s account managers though ;-)
Matt
Guys, you could be take a more proactive approach, getting together and taking your complaint to the Office of Fair Trading. What Amazon is asking is illegal in principle, especially because of their size in the market.
Howdy Dorian,
While a noble thought, in reality very few are going to challenge the price parity.
The only person here that hasn’t got anything to loose in challenging this myself as I have no product based business per-say, however I’ll frankly rather help those whom need assistance in tackling this, as generally its easier to work with changes than rub up against them as you cannot guarantee the outcome and the time expended could would have a impact else where in a business.
An extract from an earlier article around the eBay updates in May 2011 here:
http://lastdropofink.co.uk/market-places/ebay/making-sense-of-the-pending-ebay-uk-updates-in-may-2011/
Matt
Not only have we received emails, but our account with Amazon has been suspended: ‘We are writing to let you know that we have suspended your selling privileges and placed a temporary hold on any funds in your Amazon seller account.’
Even though we had total price parity (we were actually cheaper on Amazon), we did not have item parity for the simple reason that we sell P&P included on Amazon and not on our website (we use to sell +post on Amazon but the charges were too unreliable). The zero postage on Amazon is termed ‘freepost’ and hence the cost of postage cannot be used to warrant a higher total price.
We now have to transform our website so that items would include P&P and hope Amazon takes us back on. Not an easy job for a 1 and half man band who is not a computer geek…
You have been warned!
Hi Isaac,
That’s really sad news.
If you’d like some help email me [email protected] and let me know which website product it, as most have import options and if the SKU’s match between the website and Amazon it should be a straight forward task.
Matt
Hi Matt,
Love the blog. Some great info on here.
Just a note that The Amazon price parity is enforced even if the seller’s website is at a different url with a different brand name.
This strategy of selling products through different brands is very common in business so imagine our shock when were recently suspended from selling on Amazon.
The url given on signup appears to be the one they use to check for pricing as the one in our sellercentral account is different so it cannot be changed. So it seems all online channels owned by a single legal entity must have the same pricing.
We started selling on amazon over two years ago and have built up some great feedback.
Revenue increased substantially and then it started dropping all of a sudden.
We discovered that Amazon were advertising our company name on google adwords taking our repeat customers as follows.
Let’s pretend our company name is “Brand Stolen by Amazon” at http://www.brandstolenbyamazon.com
The adword featured would be as follows:
BRAND STOLEN BY AMAZON| amazon.co.uk
http://www.amazon.co.uk/brand+stolen+by+amazon
amazon.co.uk is rated 3,997 reviews
Low Prices on Brand Stolen By Amazon. Free UK Delivery on Amazon Orders
A lot of users use the search bar in their browser to mistakenly type the url so they search for say http://www.brandstolenbyamazon.com and then are driven to amazon by an adword.
So OUR existing customers when they came back to place a repeat order were then going directly to the Amazon site as their interpretation was that they were promised free delivery on our products.
We then had the situation where our existing customers were buying from Amazon and we were now paying amazon a percentage for the privilege.
To make matters worse, we later had competition on Amazon for some products (inevitable) but our customers were being targeted by the advert and we were then in the situation where we were losing the sale to competitors unless we competed on price.
We even experimented with changing our seller name thinking the adword would be automatically deleted but this adword hangs around by a nasty smell.
We have recently been suspended from selling on Amazon even using the different seller name as they still refer back to the old site.
So Amazon drove our customers to their site to place the order and are still doing so and now we are suspended from selling on their marketplace.
Currently formulating our response but wondered if anyone else has had similar experience. Thinking separate business entity for amazon selling is the way forward.
Cheers,
Dave
Howdy Dave,
See here http://www.mapleforest.com/blog/brand-bidding-on-google-adwords/ as it covers the topic rather well.
Matt
PS: Sorry for the late reply
They phoned tonight. They read aload of crap out to me on the phone. They wasted 5 minutes of my time before i said;
“Are you saying, unless our prices on our website are the same as those on amazon, we cant sell on amazon anymore”??
Amazon employee said “Thats exactly what i am saying.”
Oh dear.
So here are some of the crazy solutions that have come to my head;
1) Negotitate. See if they will let us be 10% higher, or even 6%?
2) Sell our website. This is dramatic but that way on all other selling channels we will still be the same price and we can continue to make margin?
3) Change name of Amazon seller account, change email address, Set up new business with new VAT number & Business account?
4) Hike prices up on our website. However any brand loyalty we may of built up over the last ten years may well vanish quickly, as will our sales.
5) Sell products on amazon that we dont sell on our website?
6) Say No to amazon and go it alone?
7) Say No to amazon but set up a new amazon account in 1 months time under a different business name, business account, VAT number, Reg etc, then continue selling. And if you have to, make the owner of the new company someone different than yourself?
8) Contact the office of fair trading? Has anyone tried this yet?
Any other ideas?
Has anyone succeeded with anything yet?
No3 it is then!
3) Change name of Amazon seller account, change email address, Set up new business with new VAT number & Business account?
Sounds like a plan:-)
Howdy,
You need to be really careful with duplicate accounts. eBay can be lapse on this front, but Amazon that’s the #1 sin and I’d not recommend you do that.
I’ve got a half written article on the 3 quickest ways to get your account blocked on Amazon, I’ll finish it off for next week.
Mattt
Sell on your own website. It’s crazy to rely so much on Amazon.com, and be at their mercy. Yes it’s more convenient and easier to do everything through them, but then they basically own you. For example what if they turn around and jack the commission to 20%? 25%? We do about 40k a month but I’m ready to dump them after this Price Parity issue, we just don’t make enough profit if we have to sell on Amazon without raising the price a little. Plus we get a LOT more returns from Amazon buyers compared to our own site.
You might be pleased / relieved to hear that price parity is being investigated by the U.K. competition bureau. The sort of emails you receive from Amazon have been circulating the hotel industry for many years. The case isn’t identical but there are enough similarities to worry Amazon.
Here are my own thoughts on the subject: http://dorian.skoosh.com/rate-parity-price-fixing-and-the-new-cold-war/
Hi Dorian,
Interesting article, I’m sure that these two parties are not the first and certainly will not be the last to delve into this topic.
Lets be frank here in relation to Amazon, if I was ‘Amazon’, then I’d certainly be ensuring price parity and looking after ‘my customers’, hell I’d be forcing all 3rd parties to be using FBA but that’s a story in itself ;-). Flipping to the other-side of the argument, then it can cause issues for businesses using their marketplace (as we’ve seen here already).
Its really how tolerant Amazon are with 3P businesses, as with any multi-channel business there are always going to be price differences. As long as Amazon continue to use price as a major factor (there are lots of others too I hasten to add covered elsewhere on this site), then businesses will use price checking tools and there will always be an issue of price dis-parity between Amazon prices and other 3rd party platforms.
A 10% window on pricing across the entire businesses range of products would be fair (and under the standard 15% Amazon commission). 3% thats no fair and nit-picking.
Will businesses still use Amazon as a sales channel? Yep. Will Amazon check prices again, most likely…
Thanks for comment & article and WTF is GOP anyway? I read the article and looked at the presentation, but still lost.
Matt
Hi Matt,
GOP is just one of many acronyms keeping the consultancy business alive and well.
I don’t agree with you about looking after your customers at the expense of your suppliers. A good business needs to look after its customers, its suppliers and its employees equally. Leave any of those out and you let the competition in.
I’m a big fan of Amazon for the most part but I hope they get a huge fine for this parity nonsense and I also hope they get called to task for avoiding paying tax in the U.K. Their reputation is in the balance here.
http://www.dailymail.co.uk/news/article-2093226/Amazon-accused-bullying-small-firms-inflating-prices.html?ITO=1490
We got hit with Amazon Price Parity just before Xmas on a handful of items that were slightly off the mark price wise with what they were on our website.
The problem we had was our settings for the shipping cost. On Items where the weight had been tampered with by another seller, they would send our carriage price sky high so we had to find ways round this issue which meant on a few items we were no longer in line with the website prices.
We have now managed to fix this by using the channel profile to cover any carriage costs into the unit price and hopefully this will stop any errors occuring.
The skeptic in me doesnt trust Amazon and their price parity agreements, what it allows Amazon to do at any time is find the lowest price available at any time on their site and then proceed to undercut it. Amazon are an incredibly aggressive pricing business, and it’s common knowledge that not only do they have much gretaer bargaining power when buying stock but also that they are not scared of making a few ‘Loss Leaders’ to keep things turning over and winning the sale.
Are Amazon taking over the world? They could well be
Howdy Dave,
That’s the major downside to a community based inventory system, changes such as weight can impact others either by accident or even on purpose. I must admit to writing a rather controversial article last year on this called “A ‘Merrier’ Christmas on Amazon – Fudge the Item Weights” which implied this.
Knowing the nature of the marketplace is absolutely key and “Are Amazon taking over the world?”, what is the natural conclusion to Amazon?
I think you maybe right. But what they cannot be is the nimble sellers, that dig into niches. It has been & always be too much work for a corporate to emulate properly.
Matt
Hi Matt,
The big problem with this is that Amazon are judge, jury and executioner.Having received a warning I have no option but to comply and have linked my site prices to my amazon prices. This isn’t perfect as there will enviably be discrepancies as the price juggler does its stuff and the system updates; I could still be found guilty even when I’m complying. The big question is how hard are Amazon going to push this- most of us are multichannel but if this is enforced we will all become Amazon multichannel.
Hi Martin,
Yes that’s a problem, its their Marketplace so they do set the rules.
That’s an interesting problem, what if you are complying, but an update has gone to one channel and not yet reached Amazon… I think it would be pretty clear cut that if you were pulled up on an individual case again, to just point out that you updated that day etc…
Its going to be curious on the feedback from Amazon around this, can you let me know if you receive anything back from them after this?
Matt
Hi Matt, I was particularly interested when I noticed this topic as I had this warning just yesterday.
I was particularly annoyed as when things are going well, you know theres always something waiting around the corner from either Amazon or eBay to screw things up. It annoys me that its in their policy that you must offer a favourable price when they are charging 15% commision. The way I see it, you have two options:
1) Sell your Amazon products cheaper
2) Sell your website product for more money
Either option doesnt work for us as if we sell on Amazon at the same price as our website then we would be making no money and if we sell on our website at a higher price, we again make no money as we wouldnt sell anything!
I contacted Amazon regarding this and asked how many policy warnings I’d need to get before being kicked off the site and I was advised that 2-3 warnings and I’d be off. It really hits home how fragile selling on the internet really is as we are relying on these companies.
One of the products they picked up on was a tent which I was selling for £33.94 total on Amazon and £32.90 on our website so only £1.04 difference.
I have contacted my Amazon account rep to try and get some more information so I will update when he gets back to me.
Thanks,
Andrew
A £1.04 difference (or 3%)
Now that is scraping the bottom of the barrel to make a point.
You’re right, while ideologically Amazon (as would eBay I hasten to add, as they have a similar policy) would like price parity across the sales channels in reality this is close to impossible and its impossible for a number of reasons, but it all stems from one statement:
This could be different fee structures, customer support overheads (for eBay this amplified), back-office software costs and so on… Crucially a “website” is not the same as ‘Amazon’, while the fee per transaction should be lower (taking into static gees such as hosting, software provider commissions, designer work etc…). What about marketing fees? Amazon’s fee structure is straight-forwards, but what if we include affiliate network fees, PPC and PPA (adwords for example), while repeat customers are likely to be cheaper to market too, obtaining the customer in the first place tends to be much higher than that found for eBay & Amazon, after-all, is this not one of the core reasons why businesses use the marketplaces?
And its not like you can directly compare an Amazon buyer to a Website buyer, remember Amazon lock down the communication path so that they own almost the entire process and as such they’re completely different.
I’ve not seen a comparison to an eBay item yet, although I’m sure that will come in time.
What if you applied a terms of use to your website, that clearly states that the website cannot be used for prices or the benefit of another merchant (ie Amazon)? Amazon do! http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=1040616
I quote:
Would that not then be infringement upon the terms & conditions of your website, with a clearly documented example?
The above is again like Amazon’s “ideological” approach, but in reverse. I very much doubt any “one” seller will make a stand, they have too much to lose, thus the reason for including a couple of suggestions at the end of the article.
9-10% is “fair” margin of error between the channels, 3% is not fair.
Matt
Got hit with some price parities yesterday, some as low as 1.3%! Devising some cunning plans for getting around this issue – Pack of 100 widgets on website aka Pack of 99 widgets on amazon?…..assuming that we can ship pack of 100 widgets to Channel Islands!
Hi Richard,
Ouch! Although I’m betting the others were much higher than that ;-)
As I covered in one of the replies here, its possible to look at ANY multi-channel business and price discrepancies between each channel.
For the item quantities, 100 and 101 might be better?
I did suggest to someone whom emailed me tonight that an excellent defence to the parity issue if it arises is to cross reference each channel against each other on pricing, if you make an export on File Exchange, the website and Amazon, assuming the keys (SKUs or Stock Numbers) are common, matching them up is easy and then finding out the differences is straight forwards, if it turns out that only 50% match, then yea they’ve got a point, but if its in the high 90’s… then, really is there a problem?
Matt