With all the positives that come with Brand Registry, there are some hiccups to overcome. Sellers become subject to some new Amazon metrics, and while many of these are informative, Competitive Pricing can hinder your ability to sell.
What is Brand Health?
Brand Health is a feature of Brand Registry that has grown a lot in the past 6-12 months. Previously, you may have only seen this in your Manage Your Inventory screen, and it only concerned your price. Now it is a subset of the new brand features for sellers and has been expanded to include Competitive Pricing, Prime Eligibility, and In-Stock Rates.
Overall, Brand Health is looking at your Buy Box eligibility. The 3 sub-sections are all features that impact Amazon’s algorithm, which you have control over. Prime Eligibility & In-Stock Rates are pretty self-explanatory, and you can easily correct these. Prime Eligibility also may impact your Buy Box eligibility but is not a make-or-break piece of the puzzle, as Amazon looks at overall shipping experience and its impact on total price. Competitive Pricing, however, has become a sore sport for many sellers.
What is Competitive Pricing?
Competitive Pricing is Amazon’s way of telling you that there are better offers for your product. Their reasoning behind this is two-fold: it alerts you to the possibility of losing a sale to a better price, it encourages you to offer the best price and therefore allows Amazon to have the best price on their site. Amazon is definitely more concerned with the latter, as they aim to become the most used marketplace, and having the best prices aids them in that goal.
How does Amazon determine competitive prices?
There is a lot of debate about how competitive prices are determined. Many sellers feel that they are losing out to 3P sellers on their Amazon listing. And while that may appear to be the case, it is in fact false.
Amazon determines competitive prices by looking at other marketplaces, websites, and physical stores. Their algorithm will check the web for your product and track the lowest price. They also allow customers the opportunity to share better prices that they have found:
Can competitors report false prices to hurt my offer?
Generally speaking, not likely. Amazon does require proof from customers submitting a lower price, such as a URL, photo of an ad with dates included, or picture of a price tag on a shelf. They do make an active effort to ensure all lower prices are legitimate.
What if I disagree with Amazon’s competitive price?
Previously, Amazon used to have a support case type called Brand Health, and you could submit an appeal. They would require you to provide proof that your current offer price is the same or better than those elsewhere. Often, this could be done by providing a list of URLs. However, Amazon will not enforce MAP & Distribution policies, so any mention of such would not help you here.
Amazon has since removed this option, however there is now a case type for Buy Box. You can still make the same appeal, but where success rates were low initially, they are even lower now. It is very hard to fight if there are any offers lower than yours when doing a quick Google Search. Your best course of action is to clean up all your channels and get your retailers to adhere to MAP. If you cannot find any lower offers for your listing, you are much more likely to have successful appeal.
I cannot fight this price, so what other options do I have?
If you cannot remove the Competitive Pricing alert, you have a few options still available to you. You can offer a sale price, or just completely lower your list price, to match Amazon’s suggestion. The problem with either of these options is that you risk getting into a price war, and you may be at risk of violating your own MAP policy. Another problem is that this will lead to price instability for any Subscribe & Save listings you have, meaning that when you try to bring your price back up your products may be removed from the subscription program.
Your other option is to offer a deal. Prime Exclusive Deals, Lightning Deals, and Best Deals will all override your list price, and as long as the deal price is the same or lower than Amazon’s suggestion, you will remove the alert. The benefit of going with a deal, is that these price changes do not impact Subscribe & Save eligibility. As they are temporary, it also communicates to customers prices will go back up, and gives you some breathing room to try and clean-up your channels.
What does a Brand Health or Competitive Pricing alert mean?
Whereas an alert under Prime Eligibility or In-Stock Rate is simply reminding you of the negative impact on the Buy Box algorithm, an alert under Competitive Pricing (or Brand Health, if you are in Manage Your Inventory) actually removes your Buy Box eligibility.
Competitive Pricing’s Impact on Buy Box
This is where things start to get confusing. According to the Competitive Pricing alert, you are not no longer eligible for the Buy Box, but in many cases, it may still appear as if you are winning it. This can be very confusing & misleading. What it really means is that, as far as any of Amazon’s systems or algorithms are concerned, you are not eligible. You may notice this in search results or on your storefront, where a different price shows, or things like Subscribe & Save or Prime Shipping suddenly are not displaying. On Storefront, the Buy Now and Add to Cart options in the product grid will be replaced with See Buying Options which takes customers to the offers page.
Losing the Buy Box to 3P Sellers
In some cases, you may in fact lose the Buy Box to a 3P seller with a better price. This is misleading as you are not losing to them due to a better price, but a combination of factors. If their better price matches the competitive price set by Amazon, that could be one reason. If their better price is still above the competitive price suggested by Amazon, then there are other factors such as their seller rating and number of sales in a trailing time period. Shipping comes into effect here too, if you are not offering Prime.
Why is the price on my offer discounted?
In some cases, you may see your offer at Amazon’s suggested price. In this situation, Amazon is offering a temporary discount, that they fund, in order for customers to get the best price.
In this case, while annoying, you do not need to be concerned about the impact on your sales. You still make the same as if your product was at your offer price. The only concern here is if Amazon is offering a discount that violates your MAP, but you can easily opt-out of Amazon-funded discounts on a SKU level.
Competitive Pricing’s Impact on Advertising
The other big concern here, is your advertising. Loss of Buy Box eligibility does not just impact your search results and storefront product grid, it also impacts your ability to run ads. Even if the listing shows you as the Buy Box winner, your lack of eligibility means your ads are no longer running. This impacts both visibility and sales, so taking immediate action is necessary.
Competitive Pricing is a big concern for Amazon Sellers. Drop us a line to learn how you can combat this new feature, and steps you can take to protect your listings.