Under Amazon's low-price strategy, it is the platform's consumers who ultimately pay the bill

Under Amazon's low-price strategy, it is the platform's consumers who ultimately pay the bill

As antitrust investigations into Amazon escalate, the retail giant has been forcing some sellers to cut prices to ensure consumers can’t find lower prices elsewhere, either online or in physical stores .

 

Since the beginning of this year, Amazon has been forcing third-party sellers on its email platform to list new products until their prices match those of competitors such as Walmart , Target and Costco, according to the Seattle Times.

 

Amazon’s move is likely to fuel debate about the company ’s monopoly over its marketplace , but some employees and executives of third-party sellers on the platform say consumers may end up paying for Amazon’s move .

 

Earlier this year, the CEO of a seller who was banned from listing new products by Amazon said that he believed Amazon's pricing policy was anti-competitive , but for various reasons , he did not protest to Amazon . The CEO also joked that sellers on the Amazon platform are more afraid of Amazon than the US government.

 

Amazon said in an email to sellers that in order to "protect the customer experience," sellers were "prohibited from listing new products" and that sellers "did not always meet our standards to provide customers with a good shopping experience... 95% of the time did not ensure that their prices were competitive with other retailers."

 

The email also mentioned that uncompetitive prices mean that customers think they can easily buy the same products at cheaper prices at other retailers and choose to shop at other platforms , which brings a negative experience to customers.

 

Sellers on the platform responded differently to the price pressure brought by Amazon's low-price strategy . One seller said that he lowered the price of products marked as too expensive by Amazon , but it seemed to have no effect .

 

Employees of some companies also mentioned that some sellers are urging the brands they work with to adjust or delete low-priced products listed on other local platforms .

 

In response, Steven Salop, a professor at Georgetown University Law School and former federal antitrust regulator , said this could ultimately push up prices for goods on e-commerce platforms.

 

On the surface, Amazon's low-price strategy will drive down the prices of goods on the platform . However, given Amazon's dominant position in the market, this move is more likely to result in competitors raising prices, and ultimately it is the consumers who will be affected.

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