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  • Writer's pictureStuart White

How to avoid price gouging on Amazon

The topic of price gouging has again reared its head this week following a high profile report on NBC news in America.

The article focused on the sale of baby formula across a range of online platforms including eBay, OfferUp, Amazon, Craigslist and Facebook. It found that bottles were being marked up by as much as 300 percent by sellers, and platforms are doing little to stop the practise.

In the report, mother of five Lisa Davis from Utah was quoted as saying: “If you go onto eBay, there is page after page after page of people selling formula for double, triple, quadruple what it costs in stores.” Davis estimated that she has flagged around 20 predatory formula listings to eBay, but added that nothing had been done about it.

Amazon was also highlighted by NBC, with customers finding proves up by more than 45 percent on shop prices. One consumer Lori Capps said: “It bothers me because it [Amazon] made a big deal about not allowing this for toilet paper and cleaning supplies in 2020. Cut to today and there’s obviously price gouging [of formula] happening all over. It’s so frustrating that Amazon is letting this happen.”

Capps stated in the report that she has reported five different sellers to Amazon’s customer service department but that again nothing had been done.

But Amazon itself insists they do monitor the practise of price gouging, and Thompson and Holt managing partner Stuart White has his own warnings for sellers that might take part in it, either willingly or unwillingly.

White said: “It’s worth looking back at a statement that Amazon made during the pandemic in 2020. It read as follows:

  • Amazon has zero tolerance for price gouging and longstanding policies and systems to prevent this harmful practice. We’re working vigorously to combat price gouging by:

  • Making clear to all of our sellers our longstanding policies that ensure fair pricing

  • Monitoring our stores 24/7 though both automated and manual means and aggressively removing bad actors and offers

  • Collaborating with federal, state, and local law enforcement agencies and policymakers to hold price gougers accountable

  • Staying focused on our customers and protecting their interests

“All of that still remains in place, and acts as a strong deterrent to those thinking of engaging in price gouging. At Thompson and Holt we strongly advise against even considering it, because it can lead to your exclusion from the site.

“There is another factor at play here. Sellers that use automated price setting software can see their product prices change in line with competitors, sometimes without them realising. You could be heading down the price gouging route inadvertently.

“At Thompson at Holt, we recommend that you either turn this software off, or monitor it closely so that you know exactly what is happening on your account and you can avoid falling into this trap.”

On the current baby formula situation in America, Amazon spokesperson Patrick Graham said: “We continuously compare the prices submitted by our selling partners with current and historic prices inside and outside our store to determine if prices are fair. If we identify a price that violates our policy, we remove the offer and take appropriate action with the seller.”

If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.

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