The Amazon Price Paradox: How Pricing Outside of Amazon Can Throttle Your Sales

While selling on Amazon, I encountered a surprising and impactful phenomenon: Amazon significantly throttles your sales when your pricing differs across platforms. This isn’t just a minor fluctuation—it’s a dramatic, game-changing shift that can leave your business reeling.

Imagine this: You’re running a successful Amazon store, consistently averaging between 1,100 and 1,300 daily sales. Everything seems stable, predictable even. But one day, after adjusting prices on your website or other marketplaces (like Shopify, eBay, or Walmart) to a higher price than what’s offered on Amazon, your Amazon sales plummet overnight. You go from the comfort of those 1,100-1,300 daily sales to a shocking 100-150 sales.

Here’s where it gets interesting: those 100-150 sales don’t come from organic Amazon searches or Amazon Ads. They’re driven entirely by your external advertising efforts—whether from Google, Facebook, Instagram, or elsewhere. Your organic reach and Amazon Ads seem to be throttled—essentially killed—by Amazon’s algorithm. So, what exactly is going on here?

The Amazon Pricing Match Policy: A Double-Edged Sword

Amazon thrives on offering customers the best deals. When their algorithm senses your price is higher elsewhere, it protects its own ecosystem by throttling your listings. This means your product isn’t being shown in the prominent spots it once occupied, and your sponsored ads essentially disappear from customer view.

Throttling in Action: A Drastic Drop in Sales

In my case, this throttling was extreme. Despite years of consistent sales volume, I witnessed my daily sales plunge to a fraction of their normal levels simply because my website's pricing was higher. This shift wasn’t subtle—it was sudden and brutal.

All organic traffic vanished. Sponsored ads? Gone. Amazon’s algorithm essentially declared my product invisible to the thousands of potential buyers searching daily. My external ads on platforms like Google and Instagram still brought in some sales, but those channels couldn’t make up for the massive loss of organic Amazon sales.

The Takeaway: Consistency Across All Platforms Is Key

This phenomenon illustrates just how closely tied your success on Amazon is to your pricing strategy across other platforms. If you plan to sell across multiple marketplaces, price consistency is crucial. Amazon’s algorithm is highly sensitive to discrepancies, and the repercussions can be costly if you're not careful.

Amazon sellers need to be strategic, not only about their Amazon presence but also about their entire online pricing strategy. If you want to preserve your Amazon sales volume and maintain your visibility, your prices need to remain competitive—and, in most cases, lower than, or at least equal to, prices on your own website and other marketplaces.

Is This Anti-Competitive Behavior?

It’s worth questioning whether this practice falls under anti-competitive behavior. If Amazon is effectively punishing sellers for offering different prices elsewhere, this could potentially violate the Federal Trade Commission's (FTC) rules against unfair competition, particularly under the Sherman Antitrust Act. This act prohibits companies from using their market power to stifle competition, and throttling sales because of pricing on other platforms could be seen as a form of market manipulation designed to prevent competition.

Strategies to Avoid Throttling:

• Price Matching: Ensure that your Amazon price is equal to or lower than what you charge on other platforms. Even if your margins are lower on Amazon, it may be worth maintaining that pricing consistency to avoid throttling.

• Marketplace Segmentation: Some sellers create slightly different product bundles or variations for each marketplace, allowing them to justify different prices while still complying with each platform's rules.

• Regular Monitoring: Keep a close eye on your competitors' pricing and the pricing algorithms that might affect your ranking. If you’re using repricing software, ensure it’s set up to maintain pricing parity across channels.

  
  

Conclusion: Watch Your Prices, Protect Your Sales

In the ultra-competitive world of Amazon selling, price discrepancies across platforms can lead to disastrous consequences. Amazon's algorithm is built to prioritize the best deals for its customers, and it will throttle your organic and ad-driven traffic if it detects a higher price elsewhere.

The lesson here is clear: Consistency is key. If you want to maintain your visibility, sales volume, and overall success on Amazon, make sure your pricing aligns with what you're offering on other platforms. Failing to do so could lead to the kind of drastic sales drop that’s difficult—and expensive—to recover from.