Amazon launches new feature! Another bloody price war is about to start

A week after Cyber ​​​​1 ended, Amazon did not give sellers time to review what they had done wrong during the peak season. Instead, it quietly updated the very important shopping cart policy, catching the sellers who had just finished Cyber ​​​​1 off guard.

I don’t need to say much about the importance of the Buy Box. More than 80% of all orders on Amazon are completed from the Buy Box. Due to Amazon’s rules, there may be a situation where multiple sellers compete for the Buy Box. At this time, competing for the Buy Box is competing for the order.

So how does the addition of this new feature affect the shopping cart?

Impact mechanism on shopping cart

There are many factors that affect the shopping cart, including product sales, price, delivery, etc., among which the most important factor is price.

Amazon is a platform that is extremely sensitive to product prices. Many domestic e-commerce companies that have transformed themselves to Amazon have failed on Amazon because the tried-and-tested strategy of "low prices in the early stages to increase sales and raising prices in the later stages to make profits" simply does not work on Amazon.

Once your price is no longer competitive (more expensive than others), your listing shopping cart will be taken away by your competitors, resulting in a sharp drop in orders. This is exactly the original intention of Amazon to launch the follow-up sales and shopping cart competition mechanism - to let sellers compete with each other to lower product prices and attract more consumers to buy.

Although price has such a huge impact, Amazon will not tell you why you lost your shopping cart, nor will it tell you how low a price your competitor used to snatch your shopping cart.

The new feature launched this time, Price Health, simply makes the influencing factor of price concrete. It not only tells you why you lost the shopping cart, but also tells you what price your competitors offered.

Of course, Amazon will not blatantly tell you, "This is the price offered by your competitor. If you want the shopping cart, you have to show some sincerity." Instead, just like advertising bidding, it will calculate a suggested price based on the pricing of multiple competitors in the entire category and show it to the seller.

At the same time, just like the ad bidding, this suggested price is not mandatory. However, if an ad group wants to perform well, it will basically not be lower than the suggested bid. So the signal released by this suggested price is very clear. If the price is higher than this, your product will be at risk of losing the shopping cart.

What's even more outrageous is that it doesn't mean you're safe if your current selling price is similar to the recommended price. Below I will analyze the flaws and shortcomings of this current function with examples.

In the new feature Pricing Health page, the recommended price setting will not only capture the prices of similar products on the site, but also capture the prices of other e-commerce platforms such as Walmart as a reference.

Let’s look at an example from a seller on the official forum.

This seller's product is sold on Amazon for $6.49 with free shipping. The same product is sold on Walmart for $1.63 but requires $5.99 for shipping, a total of $7.62.

From this perspective, his price is actually more competitive, but Amazon's Price Health algorithm captured the selling price of $1.63 and asked him to lower the price to around $1.63.

There are many algorithmic flaws like this. Here I pick two more representative ones for you to see.

In the second example, the price set by the seller is 16.99, but Amazon's recommended retail price is 4.99, and the seller has searched the entire Amazon site but has not found any similar products for such a low price.

The price offered by the third seller is the lowest price, and the suggested price given by Amazon is consistent with his price. However, after the seller conducts a promotion, the suggested price becomes the price after the promotional discount.

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