How do we compete with Amazon's own prices?


#1

Hi, I’m a little concerned as to how sellers are supposed to compete with Amazon’s prices. I have now found lots of products I have been selling are now fulfilled/sold by Amazon at nearly cost price. I understand that all sellers can sell the same thing, and healthy competition is a good thing, although I do feel Amazon almost penalize their sellers when they do this - there is absolutely no way we can compete with these prices and this must put sellers off selling their goods on this platform.
I also understand that every seller gets their bite of the cherry at the top of the buy box, although what customer in their right mind would pay double for a product when Amazon are selling it at near cost??
I would really appreciate some answers on this issue.

Thanks
Claire


#2

At some point along the way, sellers, including Amazon, with prices cheaper than yourself at the moment may run out of stock, - or increase their prices - enabling you to be competitive, if only for a brief window of time. Amazon don’t always sell their products at the same price; their prices go up and down just like most other vendors’ prices on the site.


#3

You can’t compete with them on price so it’s a waste of effort to try, you’ll just bankrupt yourself. Concentrate on good service, and feedback. You’ll find that Amazon’s price will fluctuate and also will have pockets of no stock.


#4

When people say compete on service, how exactly are sellers differentiating themselves ?

Assuming other sellers also have good ratings, then it’s all much of a muchness as far as the buyer is concerned surely.

And if Amazon are a competitor who are cheaper, then as a buyer I would go with them, not just based on price but also in terms of reliability / sorting out any potential issues

Also in my experience whoever has the buy box gets the sale. I don’t use FBA yet, so have noticed we only sell certain lines when the FBA sellers sell out.


#5

I’m trying to remember if you can put your phone number into your item description and encourage your potential customers to phone you up to ask questions or check out specifics. Even if its not in your description line you can put it in your “about us” section.

Amazon are very hard to beat on price, process, delivery or refund but in terms of initial contact and enquiry they are very weak. This is where you can get the edge. I have regularly had customers phone me up to ask a question and then go on to place n order with me even though I’m not always the cheapest.


#6

You can enter your customer service number on the accounts screen.
Had several people ring us this month and leave messages.


#7

You can compete on price if you want, or on service.
One is easier than the other…


#8

If you use stamps then first class is no faster than second and the difference for 100g and under is pronounced.


#9

They might allow it in the about us section (probably because no one ever looks at it!) not 100% on that, but I know for a fact they won’t allow it on the actual listing, or in the condition notes. They don’t want anything on there that the buyer could use to contact the seller away from Amazon’s monitored messaging system, in case sales are diverted away from the site. They’re the same with including promotional material with orders, which is a bit of a joke as most of my orders from marketplace arrive with some sort of flyer directing me to the seller’s own website.


#10

Quick despatch, decently packed, good customer service, even accurate description.
We compete with amazon on a few dozen lines or more, don’t particularly care if amazon are selling 200 in a day if we are selling a half dozen. Still sell out soon enough.


#11

Another thing you can do,is write “FAST DISPATCH BY 1st CLASS POST” in your description,depends what you are selling,but for me selling “DVDs” it only costs me 7P more to send 1st Class in most cases,I only do this where other sellers play the “1P Game” with me.


#12

Sounds daft I know but one of the main things marketplace (not FBA) sellers’, in the media category anyway, have in their favour is buyers’ inability to do basic arithmetic. Amazon’s own prices have their postage factored in making their headline price higher. Marketplace sellers by contrast have their £2.80 (if books) shown separately and many buyers don’t seem to be able to add the 2 figures together to realise that the marketplace seller is actually dearer even though their headline price (ie the item price) is cheaper.


#13

Not surprised but I couldn’t find the ruling. The fact that no one does made me think it was probably verboten. My customers must be diligent in finding my number, I’d assumed it was available to them via the About Us section.


#14

You can’t it’s not allowed


#15

I’m trying to remember if you can put your phone number into your item description and encourage your potential customers to phone you up to ask questions or check out specifics.

You can’t it’s not allowed

I know at least one CD retailer who has his phone number in the description of the condition of the CD. Perhaps Amazon haven’t noticed


#16

+I’m a little concerned as to how sellers are supposed to compete with Amazon’s prices. I have now found lots of products I have been selling are now fulfilled/sold by Amazon at nearly cost price.+

Because of their size, Amazon can demand, and get, much deeper discounts than are available to other sellers. So their cost price may be significantly lower than yours. On books, for example, it is often the case that Amazon can sell them at a price lower than the wholesale cost available to bookshops. Your options are:

  • compete on price, and make a loss
  • stop selling in competition with Amazon
  • set a price you are happy with, provide top class service, and hope that enough buyers will prefer you to Amazon

Paul


#17

Obviously, we are not supposed to have direct contact with customers. Never seen a number in the descritpion, but what I have noticed which is " naughty " is that some sellers have their phone number, email or website in their logo. As it is a graphic, rather than a text, it would bypass any " scanning ".


#18

We can’t !

On " New " media items, service seems to count for nothing and price is everything. Buyers don’t see what you consider marks you out from the pack. They simply see the lowest price and the Buy Box. I know I give a better service than other sellers I have bought from. But it is all about the price.

In DVDs and Games there are sellers selling US editions of releases, with up to 14 days delivery. Buyers never notice. They just go for the " Buy Box " and only realise later what the nature of the transaction they have entered into is, a US packaged and rated compatible edition, turning up two weeks later, when a great UK seller could have sent them the correct item within a day, but a crucial penny was the deciding factor.

I have tried various experiments on Amazon and in answer to the question, you can’t compete with Amazon on price. When in need of funds, coming up to disbursement, I have set prices of brand new sealed goods lower than Amazon, in the hope of clearing a few items out quickly liquidating to get some funds. Amazon have simply reduced their price, not to lower, but to a price where their mathematical equation retain the " Buy Box ". As I slashed my prices again, they again cut their prices, again not under me, but enough to somehow retain the buy box. So, I have just left the item there, a single unit, with a description saying how quickly and securely I will post it, £1 less than Amazon, and it has sat there up to a week, waiting to be bought, and nobody has touched it.

Other contributors are right. You can sell when Amazon run out of stock. In my experience People have paid from 33% more to DOUBLE, the Amazon " in stock " price, depending on the item, but it is a very brief window. And often you get a couple more items in, Amazon are back in stock, and now you are stuck with it. Mainly it has always made me wonder exactly how cheap Amazon are getting their stock, because I know at the much more " expensive " marketplace seller price, there might not even be a profit after fees and shipping !!!


#19

We compete directly, the fact we are moore expensive does not prevent sales, keeps sales levels down perhaps but not stoopping them.
One oof our bestselling items this year we are double amazon’s price - no, they did not run out of stock, people chose the buy boox or chose the individual sellers.

A few times we have undercut amazon, once by over £20. Not by choosing to underrcut, simply me setting the price as I wish.
When I’m using 2.5 wholesale price in calculation and amazon are selling at 3.5 timess my wholesale price its really not my concern.

Of those items we do compete on directly we have currently 8 orders since lunchtime yesterday to send out. Not a bad 24 hours, we have other orders on amazon and other sites soo enough to get busy with.
Amazoon may very well have had a thousand orders for those items, or 10. Does not matter, what impacts us is what orders we get.
We coould not cope if amazon stopped selling!


#20

Another point is that Amazons free delivery is only usually on orders £10 or over…so if Amazon list a DVD for £9.50 the customer would not get the free P+P unless they find another item to put with it…
So a marketplace seller could easily price the same item at £9.49 and probably get the sale.