Amazon Marketplace: Price Comparison with Google Shopping? Here’s What Sellers Can Do
The current frontrunner in the e-commerce world is hardly challenged by its competitors: Amazon has worked hard to achieve this position and works just as hard to maintain it. The online giant is not only known for its reach and size but has also built a reputation for reliability, customer orientation, and speed. But how does one manage to consistently remain number one? Among other things, this requires Amazon to constantly compare prices with competitors like Google Shopping, one of the largest rivals of the shipping giant not only in the German market. Adaptability at all levels – especially regarding pricing – is a fundamental requirement to stay at the top.
Professional sellers have suspected for some time that Amazon compares prices on the platform with competitors to always offer customers the best deal. But what about the legality of this price comparison (after all, Amazon is not an unknown company to the Federal Cartel Office)? And most importantly: How can sellers still sell on such a platform with the highest possible margin? We have the answers for you in this article.
How and on which platforms does the price comparison take place?
In the USA, Amazon seems to frequently conduct price comparisons not only with Google Shopping but also with many other platforms. Sellers often find a message from the shipping giant in their email inbox suggesting that they make their prices more competitive.
In Germany, alongside Amazon, companies like eBay, Otto, and Zalando are the usual suspects with which a price comparison could take place. For e-commerce sellers, price comparison between different providers is always a thorn in their side, and for good reason. This LinkedIn post highlights the impact that price adjustments have on sellers’ margins.
But what exactly happens during price adjustment and how is it executed? This process can, of course, vary from company to company:
Amazon is now also involving customers in the process of identifying lower product prices. Through the feedback section on a product detail page, these can be communicated directly to Amazon.
Is the price comparison with Google Shopping legal in Germany?
In short: Yes, price comparison is allowed in Germany as long as the companies involved do not violate any other laws. In particular, the Act Against Restraints of Competition, i.e., German antitrust law, comes into play here. As mentioned earlier, Amazon is well-known to the German Federal Cartel Office. Moreover, the shipping giant raises all antitrust alarm bells due to the Buy Box concept, as the winners of the Buy Box capture over 90% of sales – did someone say “monopoly position”?
Amazon has now countered this: With a second Buy Box on the product detail pages, multiple shopping cart fields are now displayed for some products, allowing FBM offers a chance to be noticed by customers. You can read about the impact this has on sellers here: Second Amazon Buy Box – Why Everything Could Change for Marketplace Sellers.
As part of the “Big Four” – Apple, Meta, Alphabet, Amazon – the Federal Cartel Office (BKA) is always involved with Amazon in some way, even if it’s just an overhaul of the laws that facilitate the regulation of these companies on German territory. Whether the BKA is monitoring Amazon due to price adjustments may be the case. However, it is highly doubtful that Amazon would incur a penalty for this. The only possibility for legal action would be the existence of an actual price collusion between Amazon and another e-commerce platform.
Price Adjustment versus Price Collusion
Price adjustment and price collusion are, however, very different concepts:
The first case does not constitute an abuse of a monopoly position to the detriment of consumers. On the contrary, buyers benefit from the price adjustments, as they now receive the same low price on every platform. Therefore, a conviction and punishment of Amazon based solely on a price adjustment is legally justifiable only if it occurs in conjunction with price collusion.
This concept may be all well and good for Amazon, the consumer, and possibly other e-commerce platforms. However, there is a vital stakeholder in this construct who does not benefit from it. And if you have read this text up to this point in the hope that price adjustment is illegal, then I have unfortunately bad news for you.
How do Amazon sellers benefit despite price adjustments?
Jeff Bezos once said a very insightful phrase that perfectly summarizes the entire situation:
“We’re not in the business of helping people sell things, we’re in the business of helping people buy things.”
Jeff Bezos
What Bezos means by this is that marketplace sellers do not have priority at Amazon. First comes the customer, then profitability, then shareholders, and eventually the sellers. Therefore, as a seller, you need an ally who works with Amazon but prioritizes the interests of the sellers. In this specific case, sellers need companies that are well-versed in pricing strategies and the application of effective pricing tactics.
As we have already established, it is legal in Germany for Amazon to conduct a price comparison with, for example, Google Shopping. There is nothing we can change about that. Sellers must therefore accept that they may occasionally lose the Buy Box because they have not lowered their prices.
Effective Pricing Strategies for Increased Revenue and Profit
An effective strategy to minimize the impact of price adjustments is to improve your own pricing strategy. This can be done, for example, with the SELLERLOGIC Repricer. Practical example:
Amazon sends you an email urging you to make your prices more competitive. If you do not do this, you risk losing visibility for the product and consequently fewer sales. Because you have too much on your plate and therefore cannot or do not want to manually optimize the price, you decide to use the SELLERLOGIC Repricer. The repricer first determines the price necessary to win the Buy Box for the product, automatically sets this price, and your sales increase.
Important: Users can define minimum and maximum prices in the SELLERLOGIC Repricer. These will never be ignored. This ensures that you will never sell below your desired margin. Additionally, the repricer offers the option to automatically calculate these price limits based on the costs you have for a product. This way, you can be sure that you are selling at profitable prices.
But that’s not all. The repricer then gradually increases the price of the product. It only stops raising the price once it receives a signal via the Amazon API that the highest possible Buy Box price has been reached.
This way, you not only sell at the Buy Box price but also at the best possible price. The end result: a competitive price that satisfies Amazon and a margin that satisfies you.
Feel free to visit us and test the SELLERLOGIC Repricer for 14 days free of charge. You take no risk, as the trial period ends automatically. In any case, you will receive professional onboarding and consultation from Amazon experts.
Image credits in the order of the images: © Koshiro – stock.adobe.com
