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

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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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