In typical Amazon fashion, the online giant has unveiled a new feature that may have potential to shake up pricing as we know it.
With the new “Make an Offer” experience, consumers can negotiate to buy items from sellers on Amazon for lower prices. Currently, more than 150,000 items from Amazon sellers can be re-priced, and products span across sports and entertainment collectibles, collectible coins and fine art. All negotiations take place in private, one-to-one conversations between customers and sellers.
In light of this announcements, the RTP editors shared whether they would use the feature and discussed whether it would impact retailers’ pricing strategies. Their thoughts are below:
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Debbie Hauss, Editor-in-Chief: I think the “Make An Offer” feature might be confusing for buyers and sellers, unless Amazon markets it effectively. They’re already obviously concerned that people are going to confuse it with bidding, as on eBay. I suppose I might try it if there was an item I was very interested in, but it wouldn’t take too many failed attempts before I would abandon it altogether. While haggling with one buyer I might be missing out on a better deal elsewhere. I don’t think it will have an effect on retailers’ pricing strategies.
Alicia Fiorletta, Senior Editor: It seems as though Amazon is catering to a very specific group of consumers with this move – the collectible fiends that also love a deal. Likewise, Amazon is giving its sellers the opportunity to save sales. It’s opening dialogue between its seller community and its loyal customers, and is allowing those conversations to happen in a private setting. While I don’t think this move will shake up standard retail pricing, and I definitely don’t think retail will embrace a haggling model reminiscent of a flea market experience, it is a drastic move that, if anything, will start a conversation in the community. How can retailers appropriately price items in a competitive world? How can they better listen to customers and understand them to price items appropriately? It’ll be interesting and exciting to see how consumers and sellers will respond to this feature as it becomes more known.
Rob Fee, Managing Editor: To be honest, I’m not crazy about this model. While it’s easy to buy most products on Amazon with confidence that they’re being sold at a good price, I feel too much burden is placed on the buyer when purchasing a product through its marketplace. I’m not a fan of sorting through 20 different sellers to find the best price with affordable shipping, and I won’t be a fan of naming my own price and hoping it is accepted. When I shop on Amazon, it tends to be because it is simple to do so. Adding layers of complexity to that is simply not something I’m interested in. If I was, I’d use eBay more often. Since I expect that this process could become confusing, or worse disappointing, to both buyers and sellers, I don’t expect it to affect other retailer’s pricing strategies.
Kim Zimmermann, Managing Editor: I shop Amazon occasionally because it is simple and convenient. I don’t generally turn to eBay because I’m not much of a fan of haggling/negotiation. I owned three Saturn vehicles because I could go to the dealership and know the sticker price. I can see it being a draw if they make sure the user experience meets expectations.
Glenn Taylor, Associate Editor: Amazon goes out of its way to not call the feature an “auction” that would compete with eBay, yet the only items available so far are items that a shopper would generally go to eBay for. Once it starts offering more products through the feature, maybe it will have more appeal from a product negotiation standpoint. Negotiating for a static product is something I usually don’t have the patience to deal with, unless I have some confirmation that the seller is looking to provide some kind a deal. I doubt retailers are going to see this feature as any kind of driver to modify their business models.
Brian Anderson, Associate Editor: This is a very intriguing idea for Amazon to pursue, but I’m not too sure how it will work if they decide to make it possible for buyers to make offers on any item sold through Amazon. From what I see, it looks like the service is being tested on high-value collectibles (my front page showed an antique coin initially priced at $2.5 million). I’d try out the service, but I’m not sure if any retailers that sell through Amazon would be willing to make their prices negotiable. Only time will tell.
What do you think about Amazon’s new service? Would you use it?
