Last week, Amazon quietly ended it’s price parity policy, and while this is good news for sellers, there are some important things you need to know about this policy change!
Price parity required more you to price any item you sell on Amazon, at or below the price you listed that same product for in another marketplace (Ebay, Walmart) or your own website.
Basically Amazon controlled your pricing no matter where you sold.
The policy has now been deleted from the pricing page Help File, but here’s an excerpt of the original policy…
“By our General Pricing rule, you must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer and/or sell the item via any other online sales channel.”
Sellers who violated the price parity policy were subject to account suspension and/or loss of the Buy Box for products priced lower off-Amazon.
Amazon’s software scanned the web daily looking for price parity violations, and took automated action on seller accounts and products found to be in violation.
What You Need to Know Now
✅ You can now price your products lower than your Amazon price on any marketplace or on your own website
✅ The end of this policy gives website owners a new advantage, as you now have the freedom to price your products lower on your website to attract sales
✅ Be prepared that if Amazon’s price comparison software is not correctly or completely updated your account/products could get caught in the net
Because Amazon has not addressed the price parity policy change or communicated that its software algorithms have been updated, we do not know for sure if all the back-end changes have been made.
✅ Recommended: Proceed cautiously with pricing changes off-Amazon.
⚠️ This new policy does NOT impact pricing on the Amazon Marketplace.
This is THE most important point you need to know.
✅ Amazon still controls its right to show your products or assign the Buy Box based on price in THEIR marketplace.
✅ This means that if your product price is significantly higher than similar products on Amazon.com you:
❌ Will NOT get the Buy Box as frequently as other sellers on a multi-offer product page
❌ Can LOSE the Buy Box for your private label product, even though you are the only seller on the page
❌ May be forced to lower your price to regain the Buy Box
*Note: this happened frequently a few years ago, it has not been as prevalent in the past year
❌ Will not be assigned the Amazon’s Choice badge
❌ Your Page Rank may be negatively impacted if your product is priced excessively high compared to other similar products on the Amazon marketplace.
✅ The bottom line is that while Amazon can no longer control your pricing off Amazon, it can still use price as a factor to determine how your product is displayed on Amazon.
So with the end of price parity, within the Amazon marketplace your price point is still a significant consideration for successfully selling on Amazon.