Practical Ecommerce

Implications of Amazon’s repricing software

In “The end of automated Amazon repricing?,” my post from 2014, I raised the prospect of Amazon creating its own repricing tool. Well, that tool now exists. It’s called “Amazon Automate Pricing.” Here’s a marketing video from Amazon.

 

It’s in beta mode now. But I suspect that it will soon be in general release. As the tool is free, I wonder how many retailers that use a third-party repricing tool will move to this one. I also wonder how many retailers that do not use a repricer will start to use this one.

Amazon has an unfair advantage. Its programmers have unrestricted access to all the product and selling data. So it can utilize info that third-party software cannot. Indeed, it is possible (but unlikely) that Amazon can compare the pricing rules and inventory levels of all the retailers selling one product together and compute its own pricing, as a direct seller, based on this data.

Therefore, whether Amazon Automate Pricing is to Amazon’s advantage or the retailers’ is unknown. It could mean that Amazon is building its monopoly and also building its data knowledge. It will know the minimum price retailers are prepared to sell products. From that, it can work out approximately what the products cost retailers to buy. This could help Amazon’s own buying decisions, as a direct seller.

This move will also undermine third-party software providers. It directly affects third-party repricer services, but all the other Amazon providers and integrators should also worry. A next logical step for Amazon would be to improve its order management. For example, Amazon could interface with more shippers so that parcel labels can be produced and manifests become automated. Amazon could even produce picking lists and add picking locations, for a retailer to keep with its listings.

Is Amazon’s long-term plan to expand its services into all the areas currently covered by third-party software? The ever-increasing fees of these software suppliers are making them vulnerable. Retailers may look to Amazon to supply the service instead. Indeed, in the longer term Amazon may charge an additional commission for supplying some of these services.

If Amazon produces an order management system, will it interface with Ebay and with a retailer’s own ecommerce site? If so, Amazon’s retail knowledge could become frightening. It could see the total sales volume of a product (with pricing) across many channels, not just on Amazon. It could truly dominate ecommerce.

Many retailers might approve of this dominance, as having a one-stop supplier for everything — especially for free — would be to retailers’ immediate, short-term advantage.

But, looking long term, is there any way to stop this giant?

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Comments ( 4 )

  1. Ecom October 19, 2016 Reply

    Here is a good comparison between Amazon’s automate pricing and the repricer that I use Appeagle: http://blog.appeagle.com/amazon-automate-pricing-vs-appeagle/ – Been using them for a few years and looked into Automate pricing when it was released but decided to stay with them in the end.

  2. richard stubbings October 20, 2016 Reply

    The Amazon service is still beta, Appeagle is a mature feature rich system. Naturally Amazon’s free service will not be as good as the higher priced Appeagle

  3. LK October 20, 2016 Reply

    The blog FBA Mastery published an insightful piece on using Amazon’s repricer, and details its deficiencies on a practical level.

    http://www.fbamastery.com/amazons-automatic-repricer-not-answer/

  4. Carlos Rivera October 20, 2016 Reply

    I enjoyed the discussion about Amazon’s continued dominance across all areas related to ecommerce/software. At this point, all we can do is follow the giant, — staying far away just in case it falls.