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Amazon VP on Repricing Tools
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What does Amazon’s senior management think about repricing tools? This is a curious question on a hot topic, which affects many Amazon sellers, whether they use such repricing tools or their competition do.
Does Amazon know about these services? Do they mind merchants using them? The topic was touched on briefly in an interview posted on February 28 by Ina Steiner, co-founder and editor of eCommerceBytes, with Amazon Vice President, Tom Taylor. We bring the relevant quote from the interview; for the rest of the interview, touching on mobile payments, same-day deliver and other topics, we recommend you read the full interview.
Under the header Amazon Repricing Tools, Mr. Taylor says:
“[S]ome merchants use repricing tools on Amazon to help them optimize their margins and to help win the Amazon Buy Box for increased sales. When asked if he had any tips for Amazon sellers on using repricing tools from third-party vendors, Taylor said, ‘I don’t. But I can tell you, customers like lower prices.”
“Amazon is aware of a lot of different tools that third-parties use to help price, he said. ‘Customers like low prices, selection and convenience, so where we can help sellers get a good low price, we’re trying to provide tools both directly and through these different types of service providers to do that.”
That Mr. Taylor knows about repricing tools is no surprise. Nor is it a surprise that Amazon senior officials are skimpy with tips to merchants about the use of any such tools. (How exactly Amazon determines which listing is selected for the Buy Box is a company secret, after all.) But it is worthy of note that Mr. Taylor and Amazon at large are not in any way against repricing tools.
Customers like low prices, but do not necessarily prefer them in all cases. If it were that simple, then the Buy Box wouldn’t be the sophisticated feature it so happens to be. Furthermore, it would drag the whole industry to endless, fruitless, even hurtful price wars. Most revealing in his remarks is that Amazon provides tools directly and through different types of service providers (i.e. repricing services) to win the Buy Box. Logic and experience tell us it is not simply a low price that will get you in the Buy Box. A repricer who promises the lowest price will not get you in the Buy Box; it will more likely get you bankrupt.