CPC: Amazon Discount Initiative Could Undermine MAP Pricing

An Amazon.com marketplace discount initiative could pose a threat to MAP pricing, according to online marketing firm CPC Strategy.

According to a post by CPC Strategy, a search strategy optimization agency, Amazon is providing its own special discounts online, and they cover marketplace items. Amazon is supposed to compensate third-party sellers for the price difference, the company stated. However, a problem may arise, CPC Strategy pointed out. The discount could violate agreements between the sellers and other online retailers. For example, the cost cuts could undermine MAP pricing.

The deals are designated Discount Provided by Amazon. However, other retailers could object to vendors who they share with Amazon selling at a lower price elsewhere, no matter who picks up the tab. The result could ultimately be that, when forced to make a choice, some vendors who are heavily dependent on Amazon might have to cut loose from competitors and become more dependent on the online sales leader, according to CPC Strategy.