Amazon's third-party sellers are losing pricing control

Amazon’s Marketplace Fair Pricing Policy explicitly states that “sellers are responsible for setting their own prices on the Amazon Marketplace.” Until 2020, Amazon only took action against third-party sellers’ pricing in very limited circumstances.

Throughout 2020, Amazon has stepped up its pricing requirements due to the impact of the epidemic. When the Amazon platform detects that the price of a product is higher than Amazon's historical sales data, its algorithm begins to suspend the sale of this product by third-party sellers due to "high pricing errors." However, this situation can usually be resolved by contacting the platform, and the seller will at most lose some sales.

But later, in January 2021, the Amazon Brand Standards (ASB) policy was restarted. At this stage, Amazon's policy mainly targets larger third-party sellers and well-known brands.

Simply put, this policy penalizes sellers whose prices for some products are not equal to or lower than those on other sites.

If the seller adjusts the pricing of the product to Amazon’s satisfaction, they will be allowed to sell those products again. If the seller does not change the product price, then the product will not be able to be sold on Amazon.

What’s worse is that no matter how many emails the seller sends, they can’t get an answer from seller support or other Amazon teams. Eventually, the case gets transferred to the ASB team, who respond with an email that says:

ASB policies are applied to protect the customer experience.

This seller did not meet the 95% price competitiveness metric.

This policy shows that the "price competitiveness" that has been applicable to Amazon suppliers for many years has been extended to third-party sellers. This may not be happy news for many sellers. Because the "competitive price" that Amazon wants is sometimes even lower than the seller's cost of goods.

So far, Amazon has not stated in seller support or other programs that Amazon can control the pricing of third-party sellers' products, nor has it stated that Amazon can punish sellers based on "non-competitive pricing." However, once a third-party seller receives a notice of suspension due to "high pricing errors," they can only make changes according to Amazon's rules.

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