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Diana vs. Amazon on Pricing: Who Sets the Buy Box Price?

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Hello!  Amazon and I are on the same listing and I’ve been doing some price tests today.  It was a fun experiment to see if Amazon would match my higher prices.

Diana vs Amazon on Setting the Buy Box Price

The Experiment Started with This Wholesale Product

In January, I found this awesome wholesale product:

  • Amazon not a Seller on the listing
  • Top .01% in the Office Supply Category
  • Less than 5 Sellers on the listing
  • Small package that’s easy to prep – just needs an FBA label
  • Buy Cost of $7.20, Selling for $18.74, Profit of $5.71
  • Bought 12 units and sold out in 3 days
  • Very easy profit!

Bought More – Then Amazon Came On the Listing & Dropped the Price

After they sold out, I ordered 42 more to meet the wholesaler’s minimum order requirement of $300.00.

When the 2nd batch arrived at the warehouse, I saw the same great results.  I sold 8 right away at the same price of $18.74.

Then Amazon come on the listing and lowered the price to $15.99.  I matched them and sold 3.  Profit dropped down to $3.40.  I’m not happy, but it’s still okay.

Amazon Lowered the Price Again

A week later, Amazon lowered the price to $12.79 and I matched them and sold 5 at that price.  Profit dropped down to $0.68. At this point, I figured that I just need to get out before Amazon drops the price more.

Repricing Manually and Checking Prices

This is one of my products that I have to reprice manually because it’s not included in my BQool Repricer tool.  The reason why is because I subscribe to an older plan that gives me 500 listings.

Whenever the number of my active and inactive inventory listings goes over 500, new inventory gets left out of BQool.  I need to upgrade to a higher-listing plan as I know that I lost money on the inventory that wasn’t repriced automatically.  (I tend to miss the products that I have to reprice manually).

Well today, I was looking at my wholesale product and noticed that Amazon and I were still the lowest-priced Sellers at $12.79.  There are 3 other Sellers and the next one is at $15.99.

I thought, hmmm, is Amazon staying at $12.79 because of me?

Diana Raised the Price and Amazon Followed

I went into Seller Central and raised the price to $13.49.  Later when I checked my orders, I noticed that this product sold at $13.49!

Sold at $12.79 (bottom) then at $13.49 (top)

I checked the listing and saw that Amazon matched me at $13.49.

I thought, hmmm, maybe I should raise it more.  So I raised it to $13.99.  I checked the listing a couple of hours later and saw that Amazon price-matched again.

A couple hours later, I thought, hmmm, maybe I should raise it again.  So I raised it to $15.49.  I checked the listing a few minutes later and saw that Amazon matched me at $15.49!

Going to Hold for the Rest of the Day

I’m not going to raise the price again today.

Tomorrow

Tomorrow I’m going to check the listing again and see where Amazon and the other Sellers are at.  I might nudge the price up a little more.

Competing with Amazon

I’ve known that Amazon shares the Buy Box as I’ve shared it with them on other listings.  But I don’t spend a lot of time analyzing it.  However, I should analyze pricing more often because I learned for sure that:

  1. Amazon will share the Buy Box if you’re priced the same.  ***I learned from Dan and Eric from Source.Sell.Profit. and The Wholesale Formula that you can share the Buy Box rotation as long as you’re within 2% of the Buy Box price. 
  2. Amazon will lower the price.  But, Amazon will also raise the price to match you.
  3. Amazon reprices almost instantly.

I’m glad that I know a little bit more about how Amazon operates.  With that said, I’m still going to avoid products where Amazon is on the listing.  The exceptions are my Amazon to Amazon Shoe Flips and fast-moving products with a large initial profit margin.

What are your experiences with competing with Amazon?  Please let me know in the comments below or on my Facebook page!

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{ 2 comments… add one }
  • Sharleen Placek April 25, 2017, 5:28 pm

    I found this out with a couple products a while back, and now I don’t always lower mine to match theirs unless I am not selling any. If you are within a certain percentage of the lowest price you can still get the buy box. Amazon definitely plays dirty and as much as they make off of fees I see no reason why they continue to jump on everyone’s band wagon with products. They actually try and make it where sellers on their platform make no profit. You would think that Amazon would want the sellers to be successful so that they can continue making fees off of them, but it is a control factor as if Jeff is a afraid some seller might come along and be so successful and profitable that they could compete with his billions. Though he says he is all for the customer, I believe that to be bull because he has caused so many brands to not want their products on Amazon because he himself has sold many products below companies MAP and they have had to get on him. I have spoken with some companies directly about that problem with Amazon. He definitely has power issues.

    Reply
    • Diana April 25, 2017, 9:01 pm

      Hi Sharleen,

      Amazon does make it hard to make $$$ when they lower the prices. It drives me crazy when either Amazon or even other Sellers start lowering prices when there’s history of it selling consistently at a higher price. I’ve heard the same that Amazon goes under MAP.

      With my experiment, I am sharing the Buy Box. I raised my price to $15.98 and Amazon and another Seller are at $15.48, but I am still getting sales. I may go up another 50 cents and hopefully that other Seller will go up too. But he doesn’t have many more in stock, so may just wait for him to sell out.

      Diana

      Reply

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I am working towards creating a full-time income by selling on Amazon. It's a lot of work but very fun! If you're interested in selling on Amazon, be sure to follow my blog as I'll be providing you with lots of tips!

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