After years of selling its goods at razor thin margins, or losses, Amazon is now discounting goods third party sellers offer on the e-commerce website. Amazon is making the move to ensure competitive pricing for goods against competitors like Wal-Mart and Dollar General. Laura Stevens reports:
Until now, Amazon has generally controlled prices only on merchandise it sells directly to consumers. Now, it is discounting some items sold by third parties, covering the cost difference itself to ensure competitive pricing.
The new “Discount provided by Amazon” tag allows Amazon to compete more fiercely with low-cost rivals including Wal-Mart Stores Inc. and Dollar General Corp. just as the all-important holiday season gets under way.
On Amazon this week, a Boots No7 Instant Illusion Wrinkle Filler sold by kn9ght was marked down 6% to $19.99, matching the same price offered online by retailer Ulta BeautyInc. Amazon discounted a Risk Legacy board game sold by VirVentures by 6% to $43.92, 3 cents less than at Wal-Mart.
“This item is sold by a third-party seller. The discount is provided by Amazon,” Amazon says on listings with the new tag.
VirVentures Senior Manager Amit Sharma said the company currently has two units of the board game for sale, adding that it appears most sellers still haven’t noticed the new discounts. The practice allows the seller to benefit as Amazon competes for more sales. “We are still receiving the same amount of money,” he adds.
Kn9ght didn’t immediately respond to a request for comment.
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