Amazon.com has begun lowering prices on goods sold by third-parties on its site with the additional savings marked by tag that reads “Discount provided by Amazon,” according to numerous reports.
Under the plan, the e-tailer reimburses third-party sellers for any discount beyond the original price.
“When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price,” a spokesperson for Amazon wrote to Reuters in an e-mail.
So far, toys and technology gadgets are the items receiving the discounts with the move seen as making Amazon more competitive for holiday selling. The discounts are less than 10 percent, and appear to only be applied for sellers that use Amazon’s fulfillment service.
While many third-party sellers may applaud Amazon’s actions, bigger brands or luxury brands may want more control over their pricing. Many vendors have arrangements with other resellers and the reductions may violate their terms.
Jason Boyce, CEO of Dazadi, a home recreation retailer, told The Wall Street Journal that Amazon’s discounting may have a downside for his company, which sells on Walmart and other marketplaces.
“At first glance, we thought [Amazon’s discount] was great,” Jason Boyce, CEO of Dazadi, told The Wall Street Journal. He then realized that price parity agreements signed with Walmart and others would mean Dazadi is “violating our seller agreement with every other marketplace that we sell on.”
