We strive to offer the best shopping experience possible, which includes helping customers find great offers at fair prices.
We have built an attractive store that benefits customers and selling partners alike. Central to this success is Amazon’s thriving partnership with around 47,000 German small and medium-sized enterprises (SMEs) that sell through Amazon. In 2024, these selling partners offered over 750 million products and employed more than 170,000 people across Germany to manage their online business with us. Selling partners are a key part of the customer experience, now accounting for more than 60% of all products sold via Amazon. Recently, there's been some discussion about how we maintain competitive pricing in our store, so we want to explain our approach in clear terms.
Our pricing mechanisms explained
Creating an environment where consumers can shop with confidence is essential to maintaining Amazon's promise of vast selection, convenient delivery, and competitive prices. If we failed to do that, customers would be less likely to shop with us, which would impact both Amazon and Selling Partners.
Featured offer selection
When we first opened our store for third party sellers in 1998 and created the marketplace the “Featured Offer” was a key invention that helped customers find the best overall offers and significantly helped sellers thrive in our store. When a customer is looking at a specific product page, it may have multiple offers from different sellers, and each seller will have its own price, shipping fees, and delivery promise.
When there are multiple sellers for a product, we list all the available offers and feature the offer that customers are most likely to prefer prominently on the product detail page, as the “Featured Offer.”
Our mechanisms evaluate all offers to determine which one should be the “Featured Offer” - with the “Add to cart” and the "Buy Now" button - making it easy for customers to identify and purchase. This selection considers price, shipping costs, and delivery speed and many more, so the customer sees the offer they are most likely to prefer. Whether an offer is from Amazon retail or a third-party seller, the “Featured Offer” is selected based on the same customer-focused criteria applied to all offers.
The vast majority of customers who compare all of the other offers ultimately select the offer featured on the product page, confirming that mechanisms selecting the “Featured Offer” are doing a good job predicting what customers want. At the same time, other offers can still be found on the same page under “further offers”, so that customers can browse and make comparisons. Such promotion is a common retail practice that helps millions of customers find competitive offers.
In order to achieve these objectives for our customers and encourage the success of selling partners, we implemented the following measures:
1. Protecting against pricing errors: Our system actively monitors for and prevents simple mistakes that could harm our customers’ shopping experience. For instance, if a selling partner accidentally lists a phone for €8.99 instead of €899 due to a misplaced decimal point, Amazon immediately flags this error. We temporarily pause such listings and contact the seller for verification, protecting sellers from costly mistakes and customers from disappointment if the order is not fulfilled.
2. Prevention of abusive pricing: We also seek to prevent price gouging, especially for essential products during periods of high demand. Amazon identifies and addresses attempts to exploit market conditions through excessive pricing.
Consider a fan that normally sells for €30. During a heat wave, if a selling partner drastically increases the price to €150 to exploit increased demand, our mechanisms identify this as an abusive price. As such, this offer would be temporarily removed from our store, protecting our customers from abusive pricing.
3. Management of atypically high prices: When product offers are listed at unusually high prices compared to typical market pricing, we ensure we do not promote those offers as the “Featured Offer” since it could mislead customers about the value of the product. Take a backpack with a typical market price of €150. If a seller lists it for €225, our current system likely will not show this as a “Featured Offer”, though the offer would remain available to customers to see and purchase. Customers have grown to trust that the “Featured Offer” will not promote an over-priced offer. We care deeply about maintaining customers’ trust.
4. Competitive price comparison: Finally, to maintain customer trust in our Store that also supports seller success, we compare offers with other reputable retailers to ensure competitiveness in the “Featured Offer”.
For instance, if a television is available at other retailers for €700, but an offer is listed on Amazon for €750, we would not highlight that offer as a “Featured Offer”. While the offer remains available and buyable in our store, we don't prominently feature prices that could disappoint customers who might discover lower prices elsewhere and lose trust in the Amazon store.
The customer shopping experience
When shopping on Amazon, customers can trust that we are working continuously so:
- They see all available offers for any product, with competitive options highlighted through the “Featured Offer”.
- Customers and selling partners are protected from pricing errors and excessive price increases during high- demand periods.
- Our commitment to competitive pricing means customers can shop with confidence.
- Customers can make informed decisions through transparent pricing information.
Looking ahead
The German Federal Cartel Office is currently reviewing the mechanisms Amazon uses to help customers find the best offers, protect them from abusive prices, and help sellers thrive. They are considering whether to order any of them to be removed or modified. While we will continue to cooperate in that review, our commitment to maintaining our customers’ trust and the benefits of low prices remain unwavering. We'll continue investing in systems that help German customers find great deals while supporting our selling partners and particularly small and medium-sized enterprises in Germany. It is common practice in retail to use similar approaches and mechanisms to reach these goals and highlight only attractive offers. It would be an absurd outcome if Amazon alone was prohibited from doing the same.
