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I've been doing a bit of research lately into some strategies to reduce Amazon cannibalizing ecommerce sales and stumbled on some really interesting information I was not aware of.
Since the beginning of time, Amazon included a price parity clause in their seller ToS that stated that marketplace sellers must set their price the same or lower than any other outlet online - what this meant is that Amazon forced their own competitive advantaged incentivizing customers to purchase product through their own portal vs brand websites through the use of their unmatchable prime and distribution offerings. For sellers such as myself, between Amazon fees and FBA, it would eat up to 25% of my margin - for lower price point products, this is even more of an issue.
Up until today, I still believed that this was the case and was looking into strategies floating around to bypass this clause such as offering coupon codes, discounts, BYGO, and other incentivization to the customer buying on my website for better pricing vs Amazon.
What I have just discovered through my research was that earlier last year, Amazon quietly buckled under some political pressure due to some presidential candidates pushing investigation of Amazon’s seller contracts and anti-compete clauses - although it was not largely publicized, upon realizing this happened, I believe it is a huge win for commerce business owners.
What this means for us is that we retain the ability to control pricing across our various distribution channels and offer incentivization for customers to leave the safety of the Amazon platform to obtain better deals without us sellers having to skirt around these anti-compete clauses and risk being banned from the platform altogether.
Now sellers are able to realistically price their products up to 15% lower than their Amazon listings and drive sales, accelerate the growth, recognition, and authority of their own sales channel/website. We already know a large portion of the buyers on Amazon love that $15-$30 price range and are fairly cost sensitive - they will scrape for deals if they are easily available.
As long as we can match the benefits of Amazon Prime (free shipping, ideally free 2-day shipping) and retain our profit margin, there is a huge additional benefit of grabbing a sale on your own website vs Amazon - one of the biggest being that you can easily build your email list via sales which can make your future launches much easier so long as your create products that your target audience love. I would gladly take an extra $1 or $2 less profit to build a list of customers are proven customers looking for what I have to offer. That email list can serve as an easy source of Amazon reviews during product launches where you can deploy a multitude of release strategies to drive traffic, reviews, and sales where you want them to go.
Since the beginning of time, Amazon included a price parity clause in their seller ToS that stated that marketplace sellers must set their price the same or lower than any other outlet online - what this meant is that Amazon forced their own competitive advantaged incentivizing customers to purchase product through their own portal vs brand websites through the use of their unmatchable prime and distribution offerings. For sellers such as myself, between Amazon fees and FBA, it would eat up to 25% of my margin - for lower price point products, this is even more of an issue.
Up until today, I still believed that this was the case and was looking into strategies floating around to bypass this clause such as offering coupon codes, discounts, BYGO, and other incentivization to the customer buying on my website for better pricing vs Amazon.
What I have just discovered through my research was that earlier last year, Amazon quietly buckled under some political pressure due to some presidential candidates pushing investigation of Amazon’s seller contracts and anti-compete clauses - although it was not largely publicized, upon realizing this happened, I believe it is a huge win for commerce business owners.
What this means for us is that we retain the ability to control pricing across our various distribution channels and offer incentivization for customers to leave the safety of the Amazon platform to obtain better deals without us sellers having to skirt around these anti-compete clauses and risk being banned from the platform altogether.
Now sellers are able to realistically price their products up to 15% lower than their Amazon listings and drive sales, accelerate the growth, recognition, and authority of their own sales channel/website. We already know a large portion of the buyers on Amazon love that $15-$30 price range and are fairly cost sensitive - they will scrape for deals if they are easily available.
As long as we can match the benefits of Amazon Prime (free shipping, ideally free 2-day shipping) and retain our profit margin, there is a huge additional benefit of grabbing a sale on your own website vs Amazon - one of the biggest being that you can easily build your email list via sales which can make your future launches much easier so long as your create products that your target audience love. I would gladly take an extra $1 or $2 less profit to build a list of customers are proven customers looking for what I have to offer. That email list can serve as an easy source of Amazon reviews during product launches where you can deploy a multitude of release strategies to drive traffic, reviews, and sales where you want them to go.
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