Amazon Pricing

Question 1

What are the Edge tools related to pricing?

Answer 1

Price History Report, Price Change Report, Leaks: EFP and Replen Code Change

Question 2

What are the 5 sources used for Amazon’s pricing algorithm?

Answer 2

CMT, 3P, MSRP (RRP), Max Margin and MAP

Question 3

What does CMT stand for?

Answer 3

CMT (Competitive Monitoring/Mapping Tool):

Question 4

What does CMT do?

Answer 4

Amazon will map an item to the corresponding items at their competitor’s retailers like Walmart, Target, Jet. They will then find who has the lowest price in the marketplace and match that price.

Question 5

Will Amazon match by unit price even if the pack size is different?

Answer 5

Yes

Question 6

retail competitor even if they are losing money on the item?

Answer 6

Yes

Question 7

If Amazon is losing money on an item what 3 risks does this put the item at?

Answer 7

Exclusively for prime, add-on item, crap out

Question 8

What does CRAP out stand for?

Answer 8

Cannot Realize a Profit

Question 9

How many retailers an Amazon item is mapped to and the frequency of the price scrapes are determined by what?

Answer 9

Sales velocity compared to other item’s in the category

Question 10

Will Amazon match a hidden price?

Answer 10

Yes

Question 11

Does the CMT match competitor coupons?

Answer 11

No

Question 12

Why is it important for our clients to monitor the Price Change Report?

Answer 12

The CMT mappings may break, resulting in Amazon no longer being the lowest price

Question 13

Will Amazon lose money price matching a 3P seller?

Answer 13

No, amazon will price match until they are profit neutral.

Question 14

When will Amazon give the buy box to a 3P seller?

Answer 14

Once a 3P’s price is low enough that it is more profitable for Amazon to let the 3rd party take the sale, Amazon will give them the buy box meaning if a customer adds the item to the cart, the item will come from the 3rd party instead of Amazon.

Question 15

What is the percentage listing fee for 3P items?

Answer 15

Amazon 3rd parties have a 15% listing fee meaning if an 3rd party item sells for 100 dollars, Amazon will make 15 dollars off the sale.

Question 16

What does MSRP stand for?

Answer 16

MSRP (Manufacturer Suggested Retail Price)

Question 17

What does RRP stand for?

Answer 17

RRP (Recommend Retail Price) in EU

Question 18

When will amazon default to MSRP?

Answer 18

If there is not a competitive retailer or 3rd party to match, the price will be MSRP.

Question 19

Why does Amazon have a max margin?

Answer 19

If Amazon is making too much margin on the item, they will lower the price in an attempt to be the most customer centric company in the world. This is usually only found in high margin categories like jewelry

Question 20

What does MAP stand for?

Answer 20

MAP (Minimum Advertised Price)

Question 21

Does Amazon adhere to MAP pricing set by vendors?

Answer 21

Amazon will rarely adhere to MAP pricing guidelines set by a vendor.