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Competitors Prompt Amazon To Slash Prices (Again)

For consumers, the holiday shopping season is the most wonderful time of year. Seasonal sales, twinkling lights and Santas for photo-ops everywhere you turn.

For retailers, it’s the Hunger Games.

And this year, much like every year for the last 20, the tributes from district Amazon are not kidding around.

This year’s newest innovation? Cutting prices — not just on the items that it sells directly, but also on the products of the third-party sellers on its website.

According to a report in Reuters, “discount provided by Amazon” applies to products like board games, gadgets and other gifty goods that Amazon is especially interested in competing on, particularly against low price-themed Walmart. The discount comes from Amazon coffers — the merchants will still collect full price, while Amazon can continue to compete at low price points.

“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 spokeswoman said in an emailed statement, noting that businesses can opt out at any time.

Some merchants, however, may not be fully into accepting Amazon’s  putative largesse, given that a historical complaint against the U.S.’ largest eCommerce marketplace is that it can devalue merchants and entire brands by overly discounting their items.  The discount might incent consumers to buy — but it also conditions them to demand items at an unrealistically (or just undesirably) low cost.

The move comes as Amazon is making changes in other areas of its sprawling retail business. Last week, it notified customers in at least nine states that the AmazonFresh grocery delivery service will be closing in certain neighborhoods later this month.

According to Recode, AmazonFresh customers in parts of New Jersey, Pennsylvania, Delaware, Maryland, California, New York, Connecticut, Massachusetts, and Virginia have received the notices. A company spokeswoman confirmed that Fresh is ending service in parts of these states, but stated that the service would still serve certain areas of big cities such as New York City, Boston, and Chicago, as well as Philadelphia and Los Angeles, among others.

She said the changes were unrelated to the Whole Foods acquisition, but declined to provide more details. After debuting about a decade ago in the Seattle area, the service only expanded to other cities more than five years ago — proof that it hasn’t been easy to make grocery delivery work as the company experimented with different payment models.

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