Some useful Amazon price gouging guidance for merchants has been published. This is both a warning to those looking to make excessive profits from the Coronavirus pandemic as well as serving as a guide to merchants who have genuinely seen their wholesale costs sky rocket through price rises due to short supply.
In essence, Amazon monitor both previous sale prices on Amazon as well as those across the entire industry to decide what is price gouging and what’s acceptable. Whilst they suggest that perhaps a 10% increase in prices is fine, they also recognise that in same cases cost of goods and other expenses have significantly increased prices.
If for example you’re selling a hand sanitiser that used to cost you £3 and is now costing you £4 at wholesale, naturally your prices will have to rise by more than 10%. However if you’re selling something like toilet roll where prices in shops and online have remained stable and you try to sell it at two or three times the normal prevailing price then expect your account to be limited or at the very least for your offer to be suppressed.
Amazon price gouging guidance
“Amazon’s Marketplace Fair Pricing Policy protects our customers from unfair, excessive, and misleading prices. In compliance with this policy, Amazon may trigger offer removal or account suspension to fight against price gouging.
We recognise that the costs of some goods may increase due to the worldwide effects of the COVID-19 pandemic, and we expect that some prices will fairly increase as a result.
While laws governing price gouging vary by country, in general they look to the average sale price (ASP) of an item preceding a state of emergency and prohibit price increases over that ASP in response to the emergency. Some laws cap those price increases at fixed amounts (10%, for example), while others prohibit “unconsciously excessive” price increases without a fixed cap. Many permit exceptions where the seller can show that the increase is due to the increased costs of goods, freight, or labour.
Our price gouging prevention systems attempt to account for these variations in local laws in addition to a harmonised customer experience across our stores. Among other factors, we look at the average sale price of the product (excluding any offers that have excessively high pricing), as well as the industry prevailing prices of the product when deciding what constitutes price gouging.
If you believe your product was erroneously suppressed by our price gouging prevention systems, you may appeal that decision through the Account Health dashboard.”