Amazon’s removal of the parity clause could shake up the e-commerce arena

Amazon has had one very basic rule
for sellers using their platform for years now, the rule known as the parity
clause was just recently very quietly removed. The rule went something like
this; if you want to sell on Amazon, then Amazon needs your lowest price. No
selling the goods on a third-party site or your own website for a few bucks
cheaper, unless you wanted to run the risk of getting the boot from Amazon’s
platform. The price parity policy was a way for Amazon to assure for years that
they were offering their customers the lowest price possible and Amazon has
been able to capitalize on this and developed a reputation for having the
lowest pricing on the web. Price parity has been very good for Amazon,
certainly in its early years as the company branched out into more categories
but it also garnered them some unwanted attention. Increasingly Amazon has come
under scrutiny by various global governments for some of its trade practices
that are perceived by many as anti-competitive. As early as 2013 Amazon removed
the parity clause from the UK and European union based platforms under pressure
by the OFT a government agency of the United Kingdom tasked with assuring free
and fair trade practices. Now that Amazon has dropped the parity clause from
their US-based platform, this means that sellers have a lot more freedom
to price their goods as they choose. They can now choose to offer better
discounts to drive traffic to their preferred sales channel like a third-party
site such as eBay or Walmart or via their own website while still netting
better margins. It’s relatively clear that Amazon under increased pressure to
back off on some of it’s more questionable trade practices is adopting the
approach of self-regulate now or potentially be forcibly regulated later, and
this could prove to be a very good thing for sellers and
consumers alike. For sellers such as our readers, it means that you can not
only sell with but also directly compete against Amazon at the same time
without fear of reprisal in the form of the Amazon ban. This is a golden
opportunity for sellers that you need to capitalize on. Build up those
alternate sales channels and start pocketing more of your sales profits,
remember there is a lot of growth opportunity outside the Amazon environment. Consumers
also stand to benefit in the form of lower prices and increased competition.
Free and competitive trade in any marketplace is what spurs on healthy growth
and innovation. It’s high time that Amazon faced a bit of competition, the
question is, are you up to the challenge?

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