What is the problem?
Other sellers offer our products on the same Amazon listings and may sell below our price.
Issue
Unauthorized sellers: other sellers on our listings may undercut our price
Other sellers offer our products on the same Amazon listings and may sell below our price. We can lose orders or lower our own price to compete, and either response can reduce profit.
More about the problem
The status quo
What has been happening until now
Our discussions describe keeping prices low partly to discourage resale and considering ways to remove competing sellers. Some may hold only a limited batch; others may have a continuing supply.
Discussion summary · confirm current practice
Analyze current approach
This section evaluates what we're doing today. The solutions further down each have their own benefit and downside.
Upside
Keeping prices low may discourage some resale and help us compete for orders. Removing competing offers, when possible, may reduce direct price pressure. These are intended benefits; the results still need to be measured.
Tradeoff / downside
A price cut can reduce profit across our whole sales volume; holding price can cost orders. The right response depends on seller stock and replenishment.
The problems
Each smaller problem and its negative impact on us. The solutions are compared below.
Problem 1
A limited batch can influence our whole pricing policy.
Negative impact on us
Price cuts may cost us more margin than the competing units are worth.
Suggested solutions
Problem 2
Competing offers can take orders away from us.
Negative impact on us
We may lose sales while deciding how to respond.
Suggested solutions
Problem 3
A repeatable source keeps replenishing the pressure.
Negative impact on us
Waiting for a seller to sell out may not resolve the problem.
Suggested solutions
Compare the suggested solutions
These options can be combined. Compare their benefits and costs before choosing a test.
Option 1
Protect margin
What would change
Monitor a limited batch before cutting price across the portfolio.
Potential benefit
Preserves profit per unit while finite competing stock sells through.
Tradeoff / negative side
We may lose orders and Buy Box share while waiting. It will not solve repeat replenishment.
Evidence and test
What we chose to test
Option 2
Test repricing
What would change
Pilot price changes with minimum margins, approved price points and a stopping rule.
Potential benefit
May recover orders and improve total contribution profit.
Tradeoff / negative side
Lower prices reduce unit profit and can trigger further price cuts. More orders do not guarantee more profit.
Evidence and test
What we chose to test
Option 3
Control repeated supply
What would change
Trace restocks to their source and assess changes to future supply.
Potential benefit
May reduce recurring leakage rather than reacting to every offer.
Tradeoff / negative side
Investigations take time and source controls may restrict legitimate wholesale sales. Some supply routes may remain outside our control.
Evidence and test
What we chose to test
What may be causing this?
Team discussion
Comments
Leave a question, observation or suggestion. Comments are shared with people who have access to this site.
Loading comments…