Amazon is an American Multinational bureau that focuses on selling and buying goods and services through digital platforms, streaming digitally, and cloud computing. It was established on July 5, 1994. Amazon has its headquarters in Seattle, Washington. The sellers must set fair prices for their products. Amazon Pricing Policy is the guideline for the seller. If these guidelines are not followed by the sellers then, the necessary actions will be taken by Amazon itself. So, let’s know about Amazon Fair Pricing Policy.
Amazon Pricing Policy
Amazon sets regulations for the seller who will sell their products through Amazon. These regulations are about the pricing factor and how the parameters should be set in the marketplace. These regulations are popularly known as Amazon Pricing Policy.
Guidelines of Pricing
Some guidelines which are mandatory for the seller to follow before listing up their items in the Amazon marketplace are as follows:
- Pricing limit – The people who are the owner of their Individual Seller Account are limited to the amount of $10,000 that they can list their item. This limitation is not applied to the holders of a Professional Seller Account and people who are registered under the category of Collectible Books.
- Fair price – There should be fair pricing of every product so that the customers are willing to buy those products. The pricing of the product should be set by looking at a rival’s product too, like the price of the product should be less than or equal to the products which are being sold through other sites or channels.
Setting the item’s price
Several things should be taken into deliberation and should be kept in mind of the seller. They are:
- Discount – The seller is free to give any type of discount to their customers but it should be kept in mind that all the expenses of these discounts and promotions would be on the seller and not on the Amazon site. Thus, the seller must offer discounts sometimes as it attracts customers to buy their products even if they do not want to.
- Handling costs – Any type of handling costs or the time required for processing the product should be calculated by the seller itself. All these should get comprehended within the price of the product.
- Low Price Comparison – Low Price Comparison is a feature of Amazon, which helps the seller to know about the standings and pricing of similar items in the market. This feature is on the seller’s account in the Manage Inventory area. It is very helpful for the sellers as they can easily fix the price of their product by knowing the prices of similar products standing in the market.
What is Amazon repricing?
The process of undercutting the rivals is known as ‘repricing’. Generally, the sellers who want to make their place in the top position of the market choose this process where they undercut their rivals by $00.01. The repricing can be done through:
Repricing tools – There are various repricing tools like Xsellco, Repricelt, and RepricerExpress used to undercut the rivals automatically. With the help of repricing tools, a minimum price can be set by the seller so that the system does not go below the profitability level.
There are two methods by which the repricing tools work. They are:
- Algorithm repricing – The algorithm-based tools are used by weighing several metrics to determine the perfect price of your product. These tools are expensive and are suitable for professional sellers.
- Rule-based repricing – A seller sets the rules in which these tools work. They are a little time-consuming too.
Manual Repricing – With this method, you can clearly understand the strategy of a rival’s product and pricing of your own. By Manual Repricing, you can undercut yourself. It is a time-consuming process and is eligible for a few products.
What is Dynamic Pricing?
When the price of a product fluctuates based on Contemporary market conditions, it is known as Dynamic Pricing. Dynamic Pricing can be defined as the changes of pricing like, when a buyer searches for any product in the morning then he will see the different price of the same product in the evening. Dynamic Planning is beneficial for the seller as the seller can maximize their profits by adjusting the prices.
What is the measure taken by Amazon for the sellers who don’t follow the guidelines?
The seller will not be informed if Amazon removes its product from the website. There are several measures taken by Amazon for the sellers who do not follow the guidelines:
- The advantages of selling will be closed
- Amazon will terminate all the shipping options
- The Buy Box will get removed from the product’s page
- All the offers will be removed from the product page
Conclusion
To sum up, everything that has been stated so far, the guidelines of the fair pricing policy should be followed by every seller and they should fix fair prices of their items. These guidelines are mandatory for all the sellers and if Amazon finds any seller not following these guidelines then Amazon can either restrict the seller from listing any more product, or the product can be straightly removed from the site.
