Effects Of Amazon Pricing Policies On Sellers And Increase In Prices

Effects Of Amazon Pricing Policies On Sellers And Increase In Prices

In a bid to maintain its position as one of the top brands around the world, Amazon reduced the ability of brands to distribute products and offer affordable pricing freely. Now, the Amazon suspension has gotten stricter and newer regulations have been put in place. This has lead to the suspension of several sellers from product listings. Also, the platform places hefty charges on sellers. This fee allows Amazon to take a massive amount of every transaction that they handle. Apparently, this treatment is considered harsh by defaulters. This isn’t supposed to be an excellent example of Amazon Seller Advocacy.

As of August 2019, the Federal Trade Commission has accepted to hear the appeals of disgruntled sellers who have been suspended by Amazon. FTC is interested in listening to the complaints of defaulting sellers. They want to look into different aspects of Amazon seller advocacy.

The Amazon plan of action involves the use of special forms of pricing. Amazon’s new policies and fee-structure are causing a lot of harm to third-party sellers. These new policies cut across different niches and industries. In the long run, this new Amazon plan of action will only make things harder for sellers and increase prices. In a bid to better understand, Amazon suspension services, it is essential to take a look at the operation processes of the company.

In taking a look at the interaction between Amazon and third-party sellers, the predatory and recipient stage are recognized.

The Predatory Stage

Tradition retail brands are known to control the distribution, quality, and pricing of a product. Due to the advent of e-commerce, things have changed, and the effects are being felt globally. With more and more e-commerce websites all over the place, it has become more challenging to confirm the authenticity of products supplied by sellers. It now became quite easy to come across counterfeit and low-quality goods. Yes, they risk the Amazon suspension, but these goods are still everywhere.

To control price fluctuations caused by low-quality goods, sellers introduced the Minimum Advertised Price Policy (MAP). This was adopted by different retail brands around to combat this issue. However, Amazon has successfully disrupted the retail industry and has influenced consumer buying behavior with new policies. Reports claim that it allowed unauthorized sellers to sell products of different brands on its platform. This, coupled with many other policies, successfully made Amazon an inevitable choice for online retailers and sellers. Brands, who at first boycotted legitimate sales of their product on the marketplace, were forced to come on board. Since unauthorized sellers won’t stop selling counterfeit and imitation products using their brand name. Brands like Apple entered an agreement with Amazon to purge unauthorized sellers and distributors of fake Apple products.

The Amazon suspension was made lenient, and these unauthorized sellers were unable to control product pricing. During the whole process, Amazon attracted more customers and retailers while disrupting the flow of the retail market. This has led to an increasing number of lawyers who sue Amazon.

The Recoupment Stage

Soon after the influx of unauthorized sellers, Amazon looked for ways to adjust the Amazon seller advocacy to eliminate counterfeit goods from its platform. Now, the Amazon seller will be subject to some policies to fight this. Amazon legal help to top brand out there is to flush out the once-favored unauthorized sellers.

However, in eliminating these sellers from its platform, it has faced an entirely new problem that threatens to disrupt things even further. Research has shown that more unauthorized sellers replace each one flushed out of the system. To tackle this, Amazon legal services have reached into the MAP for answers. The MAP allowed Amazon to control the price of products sold on its platform previously. Brands now reach out for changes when the MAP set by Amazon on products is too low. New MAPs are negotiated for products, and these have resulted in higher prices for brands to accommodate all costs related to selling on the platform.

But with a higher price on products, brands have lesser control over the goods they place in the market. This explains why you find goods at a higher price on Amazon than other retail outlets.

Is there a solution to these policies?

All of these policies and price-matching changes by Amazon have made goods costlier for the final consumer. It’s even worse for consumers without a prime account or those who don’t have a permanent address. Non-prime customers are unable to choose slower shipping methods and have to pay high costs for shipping consequently.

The next Amazon POA to end all the unfavorable conditions would be to revise some of its policies. It should also look to eliminate unauthorized third-party sellers by asking for certain forms of identification. Another impressive Amazon POA would be to reduce Amazon’s influence on product pricing. This would help to define the role and powers of the Amazon seller.

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