In an unusual move, Amazon has started cutting the prices of products by some independent sellers by offering discounted prices and then covering the costs.
The tactic, which comes in advance of Black Friday and the holiday season, offers discounts on everything from board games to tech gadgets of third-party sellers rather than just Amazon products to compete with chain stores like Walmart in the holiday shopping rush.
“When Amazon provides a discount, customers get the products they want at a price they’ll love, and small businesses receive increased sales at their listed asking price,” an Amazon spokesperson told Footwear News in an email. The spokesperson added that businesses that do not want to participate “can opt out at any time.”
Marketed as a “Discount Provided by Amazon,” the cuts give price breaks to customers — sometimes by as much as 9 percent — at the company’s expense while still giving the retailer the full price of the item. That said, the move is risky, as some retailers may complain that the price cut brings down the value of their products in other stores.
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“‘Discount Provided by Amazon’ is another way for Amazon to provide the low prices customers expect,” the spokesperson said. As the retail giant prepares for the holiday season, the competition for the people looking to buy the same popular gadgets will be stiff.