Will Amazons' New Pricing Strategy Be Successful?

Will Amazons' New Pricing Strategy Be Successful?

Tech Crunch see how giant E-commerce retailer Amazon is pushing hard to pick up more business during the holiday season, wants you to make a deal. Taking a page from the likes of eBay and Priceline, it is introducing a new dutch auction-style feature. Users can now “Make an Offer” on a product, suggesting a lower price to the vendor than the one listed on Amazon.

Amazon is rolling this out across about 150,000 items initially — one-off products ranging from sports and entertainment collectibles to art — and it says that the plan will be to extend this to “hundreds of thousands of items” by 2015.

The move seems to be a clear bid to compete against the likes of sites like eBay for more business for its marketplace from third-party vendors, who can use this as a way of shifting items that may have more flexible pricing, or for items where the value has not been firmly established because of their one-off nature.

Importantly, this gives also buyers somewhat more transparency on pricing, and keeps the negotiation within Amazon’s walled garden rather than being taken offline, where Amazon would get no commission, or finished before a sale is made.

The other person this is intended to help is the third-party merchant that sells on Amazon’s marketplace. This is one more way to connect customers to a merchant, and once you are on a product page the merchant may choose to recommend other items he/she is selling that you might like to buy.

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