Selling FBA against Amazon as another seller

The general rule of thumb when selling FBA has always been to avoid like the plague listings where Amazon is also a seller.  This makes sense in a lot of ways.  You may have a repricer that has access to SOME of the available pricing data but Amazon has a repricer that has access to ALL of the pricing data.  Plus, they built the entire system and would certainly want to take sales for themselves.  In the past, I’ve been on listings that Amazon also sells and gotten 0% buy box share and zero sales.

Lately though, I’ve stumbled across a situation / pricing strategy that generates sales even through Amazon is also a seller.

I’m selling on a footwear listing that has a BSR of 1500 in Health and Household, around 10,000 sales per month, and 12 variations.  Amazon sells all the variations and is consistently in stock.

When I started selling this product, I wanted to test a theory that some buyers would choose to buy from a third party seller rather than from Amazon.  This seemed like a good product to try it out on because it has so many sales.  When I started, I offered 5 units of each of the 12 variations and sure enough they sold within a week or two.  So I bought more and based on how fast each ASIN sold out, I bought anywhere from 5 more to 30 more of each one.  Then I bought more as those sold eventually getting to having several dozen in stock of each ASIN.

What Amazon did next was lower their price pretty drastically to the point where I was barely breaking even and it wouldn’t have even made sense to keep these in stock.  I also stopped getting any sales and no buy box time.  They were calling it a “temporary sale”.

I had so many of these at this point that I needed to sell through them and couldn’t wait for Amazon to raise their prices back up so I lowered my min to their price and continued to sell through my inventory to get rid of it without making a profit.  On some of the ASINs I even set my repricing strategy to 1 cent below FBA prices to move the inventory.

Then I decided to try to play nicely with Amazon and cooperate so that we could bring the sale price back up to where we could all make a profit.  I tried changing my strategy to 1 cent above lowest FBA price to see if I could bring their price up.  That didn’t work.  I tried raising my min price to a dollar or two above Amazon so see if they would come up to match me.  What eventually worked was waiting until I had less than 7 of an ASIN in stock, then raising my min to $29.94 and waiting to see if Amazon raised their price to match mine.  I also set my pricing strategy to 1 cent above.

So what ended up working was to price 1 cent above and keep quantities low.  My theory is that Amazon values having third party sellers on the marketplace but they absolutely don’t like having sellers that are pricing 1 cent below as this brings down sale prices for everyone.  I think their big data algroithms take all this into account and incentivize sellers that sell with the bigger picture in mind.  This means pricing to match lowest FBA price or even to price a cent above so that prices remain steady.

Over the next week as I sold down to around 7 units of each ASIN I raised my min prices and sure enough, Amazon raised their prices to match my min.  And since I was using 1 cent above repricing, the prices actually went above my min in many cases.


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