Amazon is one of the fastest-growing brands. It has gained immense popularity over the years. Additionally, Amazon also has millions of users and customers who are also regarded as the most loyal among all. Regardless of the popularity and its immense loyalty from their customers, there are several factors that make Amazon very expensive. In this article will see, Why is Amazon expensive?
With a lot of ongoing demand in terms of sales, there has been a sharp increase in the prices. Along with this, the stock for Amazon has also boosted due to the pandemic. Since Amazon was one of the very few companies that provided excellent service to the people even during the pandemic, it not only helped them retain the loyalty of the existing customers but also acquire new customers. As the profits plummeted, Amazon started investing more in the business infrastructure and other aspects in order to improve the customer’s experiences. Additionally, there are third-party marketplaces that charge more, which also results in the inflation of the prices.
These are some of the few reasons for Amazon to be more expensive lately. A few recent studies suggested that there were many other popular chain retail companies, especially in the US market, selling the same products 10% cheaper than Amazon. Even though Amazon has been more expensive lately, they have been able to successfully retain the rates of their customers and services as well. The company is aware of their customers’ loyalty since they are comfortable with the familiarity and convenience provided by them, hence, they are also able to still be on the top list regardless of the high prices.
Third-Party Retailers
Amazon makes a majority of its sales through medium or small-sized businesses. Due to this reason, the company is compelled to accept the charge regardless of how expensive it is. Amazon being a top-notch company providing excellent services and high-quality products, they are not able to discount the prices of third party retailers.
Some products sold by third-party marketplaces are also rare. Since Amazon also provides creditability of the quality of the products and also makes sure that the customers receive excellent service.
Oftentimes, the retailers and third-party marketplaces also increase the prices of the products if they are selling at a comparatively faster rate. The retailers, as well as the warehouses, are constantly monitoring the sales and the stock levels as well.
Product availability
Amazon also increases the prices of products that are on the verge of selling out. Regardless of the prices, Amazon is sure of the fact that customers will pay for it either way. These are some of the reasons why Amazon has a huge customer retention rate but is also expensive at the same time.
On the flip side, there are millions of products available and Amazon provides a variety of goods that are of excellent quality.
Amazon Services
Since Amazon is popular for its excellent services in terms of shipping, and customer assistance. Amazon has one of the fastest shipping networks and it is also considered the most reliable one.
It covers a vast majority of the US and even though they are a bit more expensive than the competitors, the customers do not hesitate to pay more. One of the reasons for this is fast and reliable delivery service.
Additionally, the global shipping services is also remarkable. They ship to more than 100 countries but provide assurance in terms of safe delivery. Even though it might be more expensive than regular deliveries, the service is of utmost priority for them, which helps in retaining customers all the way.
Employees and prices
The company pays its employees at a relatively higher rate. More than 1 million employees earn around $15 per hour. Over the years, Amazon has also been recognized as one of the most reputed companies in terms of work environment and wages.
Due to this reason, the prices of the products and services are higher in order to provide higher wages to their workers.
Along with that, Amazon is able to track the products sold by other competitors, this allows them to stock more of those products and adjusts the prices as well.
Conclusion
There are many aspects that contribute to high-end services. Amazon, being one of the top companies in the world, providing the best quality services and products, is what makes it more expensive than its competitors.
Moreover, with its high wage reputation, quality of the products and availability as well, the company charge more and is also able to retain their customers for the same reasons.
Frequently Asked Questions
- Is Amazon more expensive than Walmart?
A few recent studies suggest that Amazon is more expensive than Walmart on certain products. However, on other products which mainly comprises home good, Amazon prices were comparatively low. Hence, the products and the availability also plays a major role, while comparing prices.
- Who are the competitors of Amazon?
Some of the competitors of Amazon include Costco, Best Buy, Walmart and Target. These stores sell products at a similar range if not the same price.
- Is Amazon Prime worth it?
Amazon Prime membership provides free delivery and other extra features which includes movie, tv-series, and music streaming. Additionally, there are free games and unlimited reading as well.
- Is it safe to order from Amazon?
Amazon is one of the most popular established companies that provide safe and easy delivery. There is protection of customer information and all deliveries are securely transmitted.
