When Sellers start selling on Amazon, they agree to abide by the Amazon Marketplace Fair Pricing Policy. The purpose of this policy is to help Amazon provide the lowest prices possible for its selection, avoid price gouging, and maintain customer business.
That means that, though Sellers are responsible for setting their own prices for their own products on Amazon, they are also responsible for pricing competitively.
Read on to find out more about Amazon’s Fair Pricing Policy, especially as price gouging suspensions spike in the midst of the COVID-19 pandemic. It may just be what helps to keep your account in good health.
#1 Amazon Fair Pricing Policy Guidelines
To help Sellers avoid experiencing a deactivated listing, or worse, Amazon has shared a few pricing practices that can cause a listing to be flagged:
- Setting a reference price on a product or service that misleads customers;
- Setting a price on a product or service that is significantly higher than recent prices offered on or off Amazon; or
- Selling multiple units of a product for more per unit than that of a single unit of the same product.
- Setting a shipping fee on a product that is excessive. Amazon considers current public carrier rates, reasonable handling charges, as well as buyer perception when determining whether a shipping price violates Amazon fair pricing policy.
Violating any of the above guidelines will result in time-consuming, money-eating consequences.
#2 Amazon Won’t Do You The Courtesy of Issuing A Warning
Amazon states that its customer-centric policies are set to protect customers from pricing practices that could customer trust.
As a result, Amazon regularly monitors the prices of items on its platform and competing platforms.
If they can determine pricing practices that harm customer trust, Amazon won’t hesitate to remove the buy box from your listing, deactivate your listing, suspend the ship option, or suspend/terminate selling privileges.
It’s possible that you won’t even know a listing is deactivated until you check your Account Health Dashboard in Seller Central.
#3 Price Gouging Laws Vary by State, But Amazon Fair Pricing Policy Is All-Powerful
Nationally, price increases between 10% – 25% while some states don’t have a specific percentage. Price gouging laws are set at the state level and thus, vary as a result.
However, Amazon’s policy sort of supersedes state laws because the policy applies to all sellers and all products listed on Amazon.
No matter where your business is based, whether you’re a manufacturer, handmade seller, or third-party reseller, you’ll have to make an effort to keep your pricing competitive.
The Takeaway
The Amazon Fair Pricing Policy is ultimately there to protect customers. It’s Amazon’s way of ensuring consistency and maintaining its competitive edge in the eCommerce marketplace.
It’s important that Sellers stay in the know about policies like these, as pricing violations can make or break business success on Amazon. Learning about Amazon price gouging would also be very helpful for your Amazon business.
