Competing with Amazons pricing strategy - Ecommerce Consultancy
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Competing with Amazons pricing strategy

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Competing with Amazons pricing strategy

A competitive pricing strategy is vital for maintaining a successful and profitable eCommerce strategy. But, with the arrival of highly competitive pricing tools, winning the online pricing war can be a lose-lose for small eCommerce businesses.

Thanks to their unique pricing algorithm, large online retailers like Amazon have an advantage when it comes to competitive pricing as they are able to set their prices low enough to run smaller retailers out of business. But are there still ways for smaller online retailers to win? offers insight into Amazon’s overall pricing strategy and reveals how Amazon performs well-calculated pricing changes, which might make you re-think your pricing strategy.

According to, by taking a categorical perspective, Amazon applies different pricing strategies across all its categories, with the most competitively priced items in high-traffic categories. By focusing on ‘what they sell best’, Amazon ensures their high demand electronics and toys are the most competitively priced, leaving less favourable categories to potentially be out-priced by other niche retailers.

In order to do this, it is no surprise that Amazon keeps a very close eye on its main competitors. Ensuring that their products are cheaper than big retailers, such as supermarkets and lead toy retailers, allows them to remain front runners on price when it comes to the products customers want.

So, if you are a small retailer struggling to compete with competitive prices it might be time to re-think your pricing strategy:

1. Take a categorical perspective by applying different pricing strategies across different categories

2. Focus on what you do well by ensuring top selling / high traffic items are your most competitively priced

3. Keep an eye on your biggest competitors

Read more about Amazons pricing strategy here.

Need help with your eCommerce pricing strategy, we would love to help. Get in touch today!

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