Why are Amazon's List Prices Disappearing?

Change is the only constant in the world of Amazon. And a change we have noticed recently is the way in which Manufacturer Suggested Retail Price (MSRP) or List Prices have been disappearing from certain products.

What we Observed

MSRP, or list price, used to be a significant factor in giving buyers a perception of value. Who doesn’t like an atrociously high list price struck off in favor of a more reasonable, wallet-friendly version of it, screaming S.A.L.E.?

Our love for such strikethroughs originated in the brick-and-mortar world, and got carried over to the eCommerce world as well. Over time, our brains have been diligently trained to believe that we should save up our shopping lists for when there are “sales”. We like to compare before and after rates and feel good about the difference. Our consumer society has made Black Friday stampedes seem normal.

Starting early this year, however, list prices have been disappearing from a lot of products on Amazon. Did you notice this? The New York Times did. And seller forums did too. Is this particular phenomenon random? On the surface it seems so. But it might be part of Amazon’s larger vision of doing away with them altogether. So what we are witnessing right now might just be a phased implementation, an Amazon experiment, a beta rollout - who knows!


Why? What made Amazon Change Things up?

As sellers we know that the only things that Amazon really, truly care about are making sales happen and ..customers! So what is driving them to change things up this time? Don’t they care about losing sales if customers didn’t see their discounts? Or, are they just picking and punishing some sellers by taking away the perceived value of their offerings for some unknown reasons (and you could be that seller too). We have several theories:

Theory #1: Discounted values have lost their meaning.

If everything is perpetually on discount (as it is on Amazon), does that make it less of an attractive thing in the minds of the consumer? Has an overdose of discounts resulted in the numbing of the senses and created doubts and questions about their validity? Possibly. I mean, would you really care if a $102.52 watch now sells for $102.34? You get the point.

Watch

Theory #2: Amazon has realized that MSRP might be a fake concept

..a number that sellers arbitrarily provide in order to make their sale price look good. Sellers know it too and tools help them game it. This image exemplifies the absurdity of list prices and sale prices. Okay this one might be a joke actually.

cat

Source: New York Times article

Theory #3: In the larger scheme of things people will buy from Amazon - discount or no discount.

Amazon might be currently in the midst of conducting a massive psychological experiment, slowly training people to buy unconditionally from them, whether they are shown a discount or not. And they have every reason to believe they can make that happen. Over time, Amazon has become the trusted online brand that everyone flocks to, paying less attention to trivial things like discounts, which might have lost their meaning anyway in favor of higher values like speed and convenience.


Which Algorithm is it This Time? (And who is Getting Impacted?)

Behind all of Amazon’s changes are algorithms. There always have been, right? Things are displayed or hidden based on complex calculations. Except that this time, the logic is not so obvious.

We did a random search for a product we particularly love (just kidding) called “Purina Cat Food”. Look at the results. Of the three sponsored products that show up one does not show a list price, the other two do. Weird, huh?

catfood

We had several theories about the factors that affect this random phenomena of missing list prices, but none of these were convincing enough. Let’s consider them for the sake of argument:

Theory #1: It depends on the category: Some categories will do well even without discounts

No, it does not. Search for any product within a category and you will find a random mix of products that have list prices and those that don’t.

Theory #2: It depends on the seller: Some sellers will do well anyway

No, it doesn’t. We found that even within the products offered by a single seller, there were discrepancies. Some products had list prices displayed and some did not.

Theory #3: It depends on the BSR: Top sellers will sell anyway

This one was hard to refute. While we found that best sellers in many categories did not have list prices (supporting the theory that these will sell anyway, discount or not) we also found best sellers that did have list prices displayed.

bestseller

Source: http://amzn.to/2fzUDrQ

Conclusion

At the end of this article we are still contemplating theories. The mystery of the disappearing list prices cannot be solved just yet. What do you as a seller need to do about this? First, know that days of the MSRP might be numbered. Amazon might be doing away with showing list prices altogether. While you can go ahead and raise tickets with Seller Support requesting an explanation for why your list prices are not showing, like a lot of systemic changes that Amazon makes, you may not get much by way of a satisfactory response. So don’t count on sales happening based on a comparison of perceived discounted value. Look for other ways to optimize your listing and make your product stand out. Time to revisit those images and bullet points.

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