Third-party vendors do not always push Amazon prices lower. When it comes to Fashion items, the e-tailer actually offers steeper discounts than third-party sellers, according to L2’s Amazon Fashion: Pricing report.
Driven by its price crawlers, which examine how much products cost on other sites, Amazon offers large discounts on expensive products. The average Amazon ASIN over $50 costs 7% less than the same product sold by third-party sellers. For products under $50, however, Amazon and third-party merchants generally offer comparable prices.
The case of Cole Haan illustrates that third-party sellers are not always the downward force in pricing. When it was first offered on Amazon in January 2014, the brand’s Pinch Buckle Slip-On Loafer cost $158. After inventory levels dropped two years later, Amazon lowered the price to $74.98 to clear remaining stock.
After Amazon sold through that stock, third-party merchants took over the listings. In only 12 days, the price had returned to $117.99. This suggests that third-party discounting can be a reaction to the pressure of Amazon’s pricing algorithm, and that if not forced to compete with Amazon’s discounting, sellers would return prices to natural levels.
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