Amazon (NASDAQ:AMZN) Prices Make Things Tough for Competitors

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By Stefan Larson on November 21, 2014 Company

Amazon (NASDAQ:AMZN) makes changes in prices during Christmas season on around 80 million of its products. This price changing policy of Amazon (NASDAQ:AMZN) works great for customers especially because many major retailers have announced that they will be price matching their products according to the prices of any competitors. Retailers like Wal-Mart (NYSE:WMT), Toys R Us, Best Buy (NYSE:BBY) and Target (NYSE:TGT) accommodate the price matching policy which makes the environment competitive and enables customers who are tech-savvy and know how to find cheaper products for price matching steal really good deals.

Best Buy (NYSE:BBY)’s decision of price-matching is in the hope that by catering to the competitors prices the company will be able to complete a purchase thus gaining customers. Through price matching the products, Best Buy (NYSE:BBY) can persuade the customer to make a purchase there.

Toys R Us has also decided to price match to prevent passing its business to other retailers, or even other online competitors. The holiday season is the most important season for retailers and Toys R Us does not want to lose a purchase because of its pricing.

Amazon (NASDAQ:AMZN) continues to pursue its quest of withholding its place in the competitive market by introducing Black Friday deals on its website. Amazon (NASDAQ:AMZN) might end up being a pro when it comes to reducing prices; the company is expecting a lot of traffic on its website.

In 2013, an Internet Retailer Magazine revealed that Amazon (NASDAQ:AMZN) in one day changed prices on around 40 million of its products in an effort to provide customers with the cheapest prices across its huge collection of products. The magazine gave an example of an HP (NYSE:HP) project 8600 printer that went on sale on 30^th April on Sears (NASDAQ:SHLD) Marketplace for $160. The same product was available on Amazon (NASDAQ:AMZN) for $120, while Home Depot (NYSE:HD) had it for $130. B&H had the same printer for $110 and therefore Amazon (NASDAQ:AMZN) Marketplace made it available for $100. By 9 am Sears (NASDAQ:SHLD) Marketplace had increased its price from $160 to $190. B&H increased it to 120. Amazon (NASDAQ:AMZN) increased the price to $130 and around the same time Sears (NASDAQ:SHLD) Marketplace first reduced the price to $155 but then bounced it back up to $190 by 2pm. By 6pm, same day the lowest price for the printer was shown by a seller at Amazon (NASDAQ:AMZN) to be $100 to $105.

Amazon (NASDAQ:AMZN)’s aggressive stance on price changing makes it hard for other retailers to keep up with the company and makes the competition stronger for them.

Online marketing is a big business and is growing rapidly. Internet based sales in 2013 were recorded to be $263.3 billion. The increase in sales as compared to prior year was 16.9%. Even more increase is expected in 2014. With the change in time, online companies are giving regular companies hard time and are building more pressure on them and the trend does not seem to stop in the near future.