Amazon's Latest Effort to Take On the Competition and Regulators
Third-party merchants already account for 58% of sales on Amazon's (NASDAQ: AMZN) marketplace. That's thanks in large part to its Fulfillment by Amazon (FBA) program, which allows sellers to ship inventory to the company's warehouses for storage and Amazon automatically ships out an item when a customer buys it.
The e-tailer is testing a new program that takes FBA a step further called Sold by Amazon. SBA gives Amazon full control over the price of items sold by third-party merchants in an effort to maximize sales. Amazon will provide a minimum guaranteed payment per unit to the merchant to ensure merchants are still able to meet their profit targets, but Amazon will use its dynamic pricing engine to offer optimal prices on its marketplace.
The move could enable Amazon to offer better prices on millions of items for its customers while attracting new merchants to its platform. Moreover, it could help fend off regulatory scrutiny into potential antitrust practices.
Source Fool.com
