We live in a world of unintended consequences; somebody intends to do one thing, and the opposite happens. This is definitely the case with Amazon and what has been dubbed “The Amazon Effect.”
On one hand, they say their goal is to offer the lowest prices online. Yet, they are responsible for causing prices to increase not just on their platform but on the entire internet.
You might be wondering how this happens….
Picture this, Amazon has more than a billion products on its platform and accounts for more than half of the eCommerce market share. In addition, they have the sophisticated tech they use to scan the entire internet for products.
“Amazon has so much power that they’re not fearful of competition. They can control the seller and pricing on the internet because of their size and strength.” Jason Boyce
Amazon Buy Box Suppression to Control Pricing
When they find your product has a lower price on another eCommerce platform, they punish you by taking the Buy Box from your listing. This is commonly referred to as Buy Box suppression.
They also reduce your ability to drive traffic to your listing by 30-50%, and you quickly fall off the first page of search results. You also can’t advertise sponsored products.
This has the effect of drastically lowering your sales.
“Buy box suppression is how Amazon raises prices on the entire internet and maintains low prices against competitors with lower price structures.” Jason Boyce
The only option left is to increase your prices on the other eCommerce platforms to get your Amazon sales back, which has the effect of raising product prices everywhere. This likely proves that Amazon is likely a monopoly.
This Amazon practice pisses sellers off, but 🎧 stay tuned; we’ll tell you what to do to protect your business.
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