How Amazon tries to squeeze merchants who sell cheaper elsewhere

As Bloomberg reports, Amazon uses a tactic that “nudges” sellers to lower prices on its online storefront when it finds the product available for less somewhere else.

It’s been known for years that Amazon regularly scans other ecommerce sites to look for current pricing — and adjusts prices on products it sells directly dynamically in response to what it finds.

Now, according to email notifications obtained by Bloomberg, Amazon is sending notices to third party sellers who sell on its site when it detects lower prices elsewhere.

While the emails don’t explicitly direct merchants to lower prices, the site does penalize merchants who don’t have the lowest price on Amazon by making it harder for find and buy.

Some Amazon sellers have been vocal about the increasing costs of selling on Amazon — but also can’t afford to not be on the dominant ecommerce site.

Because of this, some Amazon merchants end up raising prices elsewhere in order to remain visible on Amazon but not cutting into profits.