Price Points by Omnia Retail
13.07.2022
How does Amazing Pricing work? A Guide for Retailers & Brands
It’s no secret that pricing on Amazon is complex, and Sellers get lost quickly in the world of Amazon pricing. To help, we created a short guide that has all the essential information about pricing on Amazon. In this...
It’s no secret that pricing on Amazon is complex, and Sellers get lost quickly in the world of Amazon pricing. To help, we created a short guide that has all the essential information about pricing on Amazon. In this post, we’ll explain how pricing on Amazon works and give some tips on how to get the most out of the platform. How does Amazon pricing work? Amazon pricing is tricky on all fronts, from how it charges Sellers to how product pricing works on the platform. Amazon Seller pricing There is an Amazon pricing structure for any Seller, regardless of how many products you have in your shop. Whether big or small, you can find an affordable way to sell items through the marketplace. Amazon pricing structure There are two ways to sell on Amazon: as a Professional or as an Individual. The Professional plan lets you sell an unlimited number of products for a $39.99 monthly fee. Individuals can sell on Amazon for $0.99 per item sold. If you plan to sell more than 40 items each month, it makes more sense to purchase the Professional Seller plan. The Professional plan also makes sense if your items have low price points; $1 per product sold is an outrageous fee if you sell a product for $3. The Professional plan also unlocks new categories for sales and has additional features that help you sell more products. Amazon seller fees If you think the costs of different selling plans on Amazon sound inexpensive, you’re not alone. Unfortunately, besides a monthly payment for your store (or payment per product for Individual Sellers), Amazon charges fees per product sold. There are several fees that individuals and professionals must pay per item sold. These include: Referral fees on each item sold: a percentage of the final price of a product sold Shipping fees (which apply regardless of fulfillment method) Closing fees Amazon’s fee structure can get complicated, so it’s worth examining the Selling on Amazon Fee Schedule. If you are an FBA Seller, Amazon will charge you additional storage and fulfillment fees. Amazon also has a calculator that can help you estimate your revenue, even with fees. Just enter the product name, UPC, ASIN, ISBN, or ASIN number and product details and you’ll get an estimate of how much revenue you can expect to earn. Amazon price changes Besides having a complicated pricing structure, Amazon also has a complicated pricing model. The company is a pioneer in dynamic pricing and makes over 250 million price changes every day. The average product’s price will change once every 10 minutes, making it difficult for Sellers and consumers to keep up. Amazon price match Amazon doesn’t have any price-match guarantee. If consumers find a product they’ve bought for a cheaper price online, there’s no way for them to ask Amazon to pay the difference in price. This is mostly for practical reasons. Amazon used to have a policy like this, but as the market became more fluid, the policy became impossible to honor. Amazon recognized that a dynamic market meant price match policies would become obsolete. With this knowledge, the company eliminated the policy in 2016. Amazon price protection 2020 Amazon also doesn’t have any price protection policy. Consumers just have to trust that the company offers the lowest price on the market. Amazon’s reputation for offering lowest prices isn’t unfounded though, and a 2018 study by Profitero found that Amazon was 13% cheaper than other major online retailers in the US. So even without this policy, consumers likely do receive some of the best deals on the platform. Amazon Repricing Software Regardless of whether you’re a Seller or a consumer, Amazon becomes overwhelming fast. Luckily, technology can help both Sellers and consumers get a better understanding of Amazon and reap the best benefits of the marketplace. Whether you want to find the best deals or prices, or understand the landscape of Amazon, there’s a tool out there for you. Amazon best Seller tools If you’re a Professional Seller on Amazon, there are several types of tools that will make your job easier. In this section we’ll cover a few of the more important tools to have. Amazon Repricer Tools Repricing tools are for Amazon Sellers who want their products’ selling prices to update with the flow of the market. In other words, repricer tools are dynamic pricing tools built specifically for Amazon. Request a free demo for our Amazon Repricing Software here. Since Amazon updates prices so frequently, this tool helps Sellers keep products relevant. A repricer will also help keep products in the Buy Box — the coveted space on any Amazon product listing page that’s responsible for an estimated 82% of Amazon sales. Increase your revenues with Amazon Repricer Software Read more Increase your revenues with Amazon Repricer Software Amazon's Free Repricer tool - the Pros and Cons Amazon doesn’t change prices for third-party sellers, but it has a free proprietary repricer that can adjust prices for you. This tool is called “Automate Pricing.” You can find it under the Pricing tab in your Seller Central account. Automate Pricing is easy to set up in just four steps. All you need to do is define the parameters of a rule, choose the SKUs where the rule applies, set minimum and maximum prices, then start repricing. Amazon’s repricer has both pros and cons. Some pros include: Free as long as you’re a professional seller Helps increase sales (but at the expense of profits) Does a great job of lowering prices, but not the best job at raising prices Easy to use and set up The cons of the repricer far outweigh the benefits, though. According to users, Amazon’s repricer tool is frustrating to use and limited in its capabilities. Some major cons are: Only allows you to set up repricing rules on active SKUs Limited customization on rules Doesn’t account for fees and doesn’t help you calculate for fees Doesn’t increase your price Once you get the Buy Box, it stops repricing The Automate Pricing tool of Amazon is notoriously fickle. The video below is an honest review of Automate Pricing, and the overall sentiment is that Automate Pricing is more trouble than it’s worth. Considering a stable and revenue-boosting Repricer Tool? Request a free demo for our Amazon Repricing Software here. Amazon competitive intelligence tools: How to find price drops on Amazon Competitive intelligence is the backbone of any repricing tool because without intelligence your prices have no basis on the market. Competitive intelligence tools gather the prices of your competitors on Amazon, showing you where there are dramatic price drops in the market. It should then deliver this information directly to you. With this information, you can make more thoughtful, data-driven decisions when you choose prices for your products in the store. How to hack Amazon pricing For Sellers, creating an Amazon pricing strategy and hacking your way into the Buy Box is no easy feat. But with hard work and effort, you can get your product into the Buy Box and keep it there. There are tons of different strategies you can adopt to reprice on Amazon. One popular one is the high runner strategy, and it’s the approach that Amazon uses itself. In this strategy, you focus your efforts on the products that drive the most traffic (which are usually highly elastic), and offer a competitive price on those items to pull people to your page. Once a consumer is on your product listing, as long as the product is legitimate and matches their need, they will probably purchase it. Additionally, once someone arrives on your listing, you can engage another pricing hack: bundling. Bundling helps increase the perceived value of your products, makes consumers more likely to purchase them, and helps move items through your store faster. If you’re just starting as a Seller though and want to get into the Buy Box, the best strategy is to start small and slowly raise your prices by small increments. The goal is to attract buyers to your listing through a competitive price, earn reviews and good credit in the eyes of Amazon, then raise your price. This is a key part of the pricing-marketing mix. Amazon repricing strategy Developing a strategy comes down to your company goals and the following steps: Define your commercial objective Build a pricing strategy Choose your pricing method Establish pricing rules with Amazon Pricing Sofware Implement, test, and evaluate the strategy Besides thinking of your own store’s strategy, consider Amazon’s strategy. The company strives to be the world’s most customer-centric company, and this philosophy dictates every strategic move the marketplace makes. If you factor this philosophy into your overall Amazon strategy, it will pay off. So in addition to offering a competitive price, you should also work for quality products, fast shipment, and excellent customer service. You should also build a marketing strategy that sets you up for success and optimize your listing for Amazon's search algorithm. Final thoughts Pricing on Amazon is important, but it’s not the end-all-be-all. Prices on Amazon constantly change, and it’s better to think of a product’s price as temporary rather than a fixed feature. For Sellers, this means price is an important part of your overall strategy. It’s not the only thing Amazon considers when determining the winner of the Buy Box, but it’s a good way to tip the scales in your favor.
How does Amazing Pricing work? A Guide for Retailers & Brands
14.06.2022
How robotics and AI are improving supply chains
If only Henry Ford, the founder of Ford Motors who invented the assembly line that revolutionised how cars are made, could see how corporations have advanced the logistics of supply chains in 2022. Approximately 109...
If only Henry Ford, the founder of Ford Motors who invented the assembly line that revolutionised how cars are made, could see how corporations have advanced the logistics of supply chains in 2022. Approximately 109 years later, modern supply chains are including engineering and scientific developments like never before, seeing robotics and artificial intelligence (AI) brought to the forefront to increase productivity, decrease overheads, and improve the customer’s experience. With the rapid development of e-commerce and the changing landscape of consumer spending habits, it has become vital for retailers and brands in many industries to rethink and modernise how they bring a product through the process of production, manufacturing, shipment and delivery to the consumer. We have taken a look at how robotics and AI are affecting and improving global supply chains, the companies that run them and their employees. Robotics in retail and e-commerce One of the biggest issues within retail and e-commerce is delivery - and fast delivery at that. Using robotics, AI and automation (RAIA) has shown to significantly improve delivery schedules and times. According to a 2021 McKinsey & Company survey, 75% of retail supply chain leaders have made 2-day delivery a priority and 42% are aiming for same-day delivery in 2022. Alongside these consumer demands, 64% of retailers cited digitalisation and automation investments as being critical. A key area in speeding up deliveries and creating seamless supply chains is warehouse automation, and one such retailer that’s taken on the challenge is Ochama in the Netherlands. The Chinese e-commerce giant JD.com launched robotic grocery stores in four Dutch cities, namely Leiden, Amsterdam, Utrecht and Rotterdam. Groceries and non-food items are collected throughout the store by mobile robots, packaged and presented to shoppers. Customers can order their parcels via the Ochama app and then collect it at the store by scanning a barcode that specifies your order, after which a conveyor belt and robotic arms hand-deliver the order. This is only one part of the machine that has utilised robotics: A warehouse of 20,000-square metres is equipped with automated systems that can process up to 15,000 parcels a day. Because of the technological advancements used in the supply chain, Ochama has brought down the overall costs of food and non-food items by 10%, making the omni-channel retailer one of the first to be able to reduce some of the consumer living costs using robotics and AI. From groceries to clothing, AI is showing its exponential value. Finesse, a US clothing company, is using AI to determine future fashion trends for potential markets and moving away from fast fashion. When you visit their website, the clothing doesn’t actually exist yet. What you see is 3D-rendered items of clothing where shoppers can vote for an item they’d like to buy. The items with the most votes get made, resulting in reduced overstocking and lower production costs. In this case, we see AI being used as an integral part of the business model instead of being a background assistant to supply chain problems. AI has shown to be helpful with returns This particular business model, where votes determine production, doesn’t mean returns and refunds aren’t still an option - or a problem, depending which side of the e-commerce street you’re sitting on. Nonetheless, AI has also shown to be helpful with e-commerce’s biggest headache: Returns. Global e-commerce’s returns problem is estimated to cost €111 billion just over the festive season after December. Approximately 30% of all online orders are returned by customers, making it a very large and expensive problem. In fact, although a customer may experience the ease of “free and easy returns”, a typical return actually costs a retailer between €19 - €41 each time when they factor in transport, processing (receiving, inspecting, then sorting), and reselling efforts. Berkshire Grey found that processing time could be reduced by 25% and processing costs by 35% if employees could make use of automation and robots. How may employees view the incorporation of robotics and AI? A 2021 study published in the Journal of Technology in Behavioural Science conducted multiple interviews with employees of different seniority levels across multiple industries to quantify their understanding and perception of RAIA in the workplace. Firstly, the study found that employees feel that “human touch” and “soft skills” could never be replaced or replicated; secondly, it found that employees should view RAIA as an opportunity and not a threat; thirdly, employees may experience a job satisfaction dilemma; and lastly, employees feel that companies should be extremely prepared before and after RAIA is implemented for whatever the impact may be. There is no doubt that jobs, workplaces, employee-to-customer or employee-to-employee relationships will change, but it is important for companies and team members alike to start viewing RAIA as a way to upskill, revolutionise and grow. There seems to be a common misunderstanding that by including robotics and AI into the workplace it will automatically result in retrenchments, firings and an exodus of employees. Although we can’t speak for the intentions of all companies, robotics has shown in many cases to improve the work environment for employees. If employees have been spending valuable time on mundane or time-consuming tasks that are part of their job, they can now spend that time on strategy; the very thing that results in better productivity and more profit. With our fully or partially automated dynamic pricing software solutions, Omnia takes a similar stance. Users require less time on repetitive, high-volume tasks and have more time planning and managing the strategic direction of prices. Looking toward the future Warehousing, final assembly and production are three main areas where autonomous robots will be the most beneficial. Deloitte predicts that including robotics in these areas can increase productivity; improve the collection of data; and decrease the risk of hazardous tasks while working alongside humans for improved efficiency and safer work environments. McKinsey & Company conducted a study that surmised that 20-30% of the time can be freed up for other important tasks if repetitive tasks are automated or robotised. Deloitte suggests that using autonomous robots within the supply chain will dramatically increase over the next five years and the more companies start to incorporate robotics into their processes, the more fluid and seamless supply chains will become.
How robotics and AI are improving supply chains
09.03.2020
The 7 Business Strategies of Amazon: Secrets Behind the Company's Success
From humble beginnings as an online bookstore in 1994 to becoming the fourth most valuable public company with a market capitalization of $2.36 trillion in 2025, Amazon’s journey offers valuable lessons for retailers...
From humble beginnings as an online bookstore in 1994 to becoming the fourth most valuable public company with a market capitalization of $2.36 trillion in 2025, Amazon’s journey offers valuable lessons for retailers and brands alike. Amazon's strategies for success have evolved significantly since the company’s founding, yet certain core principles have remained consistent. Understanding these strategies requires examining both their customer-centric philosophy and their technological innovations that continue to disrupt multiple industries. What strategies has Amazon implemented to maintain its competitive edge in e-commerce? How have they managed to expand from books to cloud computing, entertainment, healthcare, and beyond? This comprehensive guide explores the key strategies behind Amazon’s remarkable success and what businesses can learn from its approach in 2025. “Do whatever it takes to make the customer happy.” - Amazon What is Amazon’s Goal? Understanding the Company’s Mission Amazon's mission is straightforward: "Earth's most customer-centric company." This statement has guided the company’s strategy for nearly three decades. Jeff Bezos's 1997 letter to shareholders (which Amazon still attaches to annual reports) outlined a focus on long-term market leadership over short-term profitability. This philosophy has allowed Amazon to make bold investments that might seem questionable in the short term but create substantial long-term value. Beyond retail, Amazon identifies customer pain points across industries, offering convenience, selection, and value, for example, AWS, its own tech ecosystem (like Alexa or Kindle), and entertainment (like Prime Video). This approach has disrupted markets from cloud computing to healthcare. Unlike traditional retailers focused on quarterly profits, Amazon prioritizes market position and customer loyalty for sustainable growth. Core Business Strategies The most effective Amazon strategies for success revolve around long-term thinking and their obsession with customer satisfaction. This patient capital approach has allowed the company to invest in infrastructure, technology, and new business lines that take years to become profitable. Amazon’s core business strategies include: Customer obsession: Making decisions based on customer needs rather than competitor actions or short-term financial considerations. Long-term thinking: Willingness to be misunderstood for long periods while pursuing innovative ideas that may take years to prove successful. Continuous innovation: Treating “Day 1” as a permanent state of mind to maintain startup agility despite massive scale. Operational excellence: Relentless focus on efficiency, speed, and quality in all aspects of the business. By maintaining these consistent values while adapting tactics to different markets, Amazon has created a cohesive yet flexible strategic framework. Amazon Business Level Strategy: From Retail to Tech Giant Amazon's business-level strategy combines cost leadership with differentiation in a hybrid approach that few competitors can match. While traditional strategy theory suggests companies should choose either cost leadership or differentiation, Amazon has successfully pursued both simultaneously. The company has evolved from selling books to creating a comprehensive ecosystem of products and services that reinforce each other. This ecosystem approach creates powerful network effects and switching costs that help retain customers and drive growth across business units. Amazon’s strategy focuses on entering and disrupting traditional industries through technology and customer experience improvements. For example, their acquisition of Whole Foods wasn’t simply about entering grocery retail but reimagining the grocery shopping experience through technology integration. Amazon’s business level strategies can be categorized into three main approaches: Corporate level strategy: Diversification into related and unrelated businesses that can benefit from Amazon’s core competencies in technology, logistics, and customer data. Business level strategy: Hybrid approach combining cost leadership and differentiation within each business unit. Functional level strategy: Operational excellence through automation, data analytics, and continuous process improvement. This multi-layered strategic approach allows Amazon to maintain coherence across diverse business units while adapting to the specific requirements of each market it enters. Amazon Sales Strategy: How the E-commerce Leader Drives Revenue Amazon's sales strategy heavily relies on personalization and recommendation algorithms, generating an estimated 35% of retail revenue through cross-selling and upselling. Their core approach maximizes selection and minimizes prices, making it harder for competitors to compete with them. This has led to them capturing 38-40% of the U.S. e-commerce market by 2025. While initially focusing on first-party sales, Amazon now emphasizes its marketplace, with third-party sellers accounting for 60% of unit sales. Amazon Dynamic Pricing Model: Algorithmic Advantage The dynamic pricing model represents one of their most sophisticated competitive advantages. Amazon’s pricing algorithms analyze over 400 million price changes daily, adjusting based on: Competitor pricing Customer browsing and purchase history Inventory levels Time of day and seasonal factors Demand forecasting data Win the Buy Box—Without Racing to the Bottom Read more Win the Buy Box—Without Racing to the Bottom This algorithmic approach allows the company to optimize margins while maintaining its reputation for competitive pricing. For high-visibility products that shape price perception (known as “key value items”), Amazon maintains aggressive pricing, while potentially earning higher margins on less price-sensitive items. For retailers and brands competing with Amazon, understanding this dynamic pricing approach is strategically important. Static pricing strategies simply cannot compete with Amazon’s algorithmic advantage, making dynamic pricing technology an essential investment for competitive e-commerce operations. Marketplace Strategy Amazon’s marketplace strategy has evolved from a supplementary sales channel to the core of its retail business model. By opening their platform to third-party sellers, Amazon has: Dramatically expanded product selection without inventory investment Created a new revenue stream through commissions and seller services Gathered valuable data on product trends and pricing Established a virtuous cycle where more sellers attract more buyers, and vice versa This platform approach has taken Amazon from being a retailer to a complex retail ecosystem, with significant implications for brands and retailers. For many brands, the question is no longer whether to sell on Amazon but how to optimize their Amazon strategy while maintaining other sales channels. TikTok Shop and Viral Trends: Using Social Media to Drive Sales Amazon has changed its social media approach from basic product promotion to a sophisticated strategy that’s deeply rooted in data analysis. With over 43 million followers across major platforms, Amazon implements a three-pronged strategy to capitalize on social trends: Real-time trend monitoring: Using AI-powered listening tools, Amazon identifies emerging product trends by analyzing hashtag velocity and engagement patterns. When potential viral products are detected, category managers are automatically alerted to adjust inventory and marketing strategies. Platform-specific optimization: Rather than using uniform content, Amazon tailors their approach to each platform’s unique characteristics, embracing short-form video on TikTok, creating shoppable Reels on Instagram, and developing longer educational content on YouTube. Seamless purchase integration: Amazon has minimized friction between product discovery and purchase through innovations like “shoppable collages” and direct integrations with platforms like TikTok Shop, allowing consumers to complete transactions without leaving their social media experience. Amazon's social commerce drives 10.33% conversion rates, nearly eight times the industry average. Viral content boosts product sales by 412% within 48 hours. This success stems from integrating social listening with inventory and pricing, allowing Amazon to quickly capitalize on trends and avoid stock shortages. Amazon Prime Day 2025: Data Analysis and Strategic Insights Prime Day in 2025 was another “record-breaking sales event” for the company as Amazon extended it to a 4-day event instead of the usual two days. As Prime Day is slowly becoming almost like its own holiday, Amazon is strategically using this period to increase its market share, drive revenue, strengthen customer loyalty, and promote its own tech ecosystem. Here are some of Amazon’s key strategies for Prime Day: Market share and traffic expansion: Extending Prime Day smooths demand while capturing incremental traffic. This year, average daily orders were 136% higher than year-to-date averages, demonstrating sustained impact even across longer timeframes. In Europe, especially, "hero" products like Ring and Sony headphones serve as traffic magnets. However, Amazon notably withheld a crucial metric for 2025: total items sold, which they previously reported as 375 million in 2023 and 300 million in 2022. While the extension resulted in greater total sales volume, it paradoxically led to lower daily average sales compared to the previous year. Ecosystem lock-in through device promotion: Amazon heavily discounts its own hardware (Echo, Fire TV, Kindle, Ring) to drive long-term ecosystem engagement. Amazon tech products, including Fire TV, Echo, Kindle, and Ring, averaged 30% off, while Amazon aggressively discounted its Private Brands and Everyday Essentials by up to 40%. Strategic pricing tactics before and during Prime Day: Omnia's analysis found a clear pricing pattern based on the average pricing trends leading up to Prime Day: prices climbed from €142.78 a month before to €148.28 weeks before Prime Day, then "discounted" back to €142.77, essentially month-old levels. Most telling, 54.9% of products showed no price drop, with 45.5% actually increasing. Competitive market response: European competitors responded aggressively: bol.com offered deeper cuts on 14% of identical products, while MediaMarkt exceeded Amazon's discounts on 16% of analyzed products. AI-driven engagement control: Prime Day's massive traffic provides optimal conditions for testing and promoting Rufus, Amazon's AI shopping assistant, strategically nudging visitors to interact and train the AI model. Amazon Technological Innovations Driving Competitive Advantage The company’s technological innovations, like AWS, AI shopping assistant Rufus, Alexa, and warehouse robotics, have changed multiple industries and created substantial competitive advantages. Their willingness to invest heavily in R&D (over $73 billion in 2024) has enabled them to maintain technological leadership across multiple domains. Recent Amazon technological innovations include AI-powered demand forecasting and generative mapping technology (Wellspring.) Their demand forecasting system has achieved a 10% improvement in national forecasts and 20% in regional forecasts, directly enhancing inventory placement and reducing delivery times. Amazon AI and Machine Learning: Powering Next-Gen Retail Amazon’s AI and machine learning capabilities have become central to its competitive advantage across all business units. Recent developments include: AWS Generative AI Innovation Center: An additional $100 million investment announced in July 2025, focusing on autonomous, agentic AI systems that are projected to influence 15% of work decisions by 2028. Source: Reuters Wellspring Mapping Technology: A generative AI solution that has enhanced delivery accuracy for over 2.8 million apartment addresses, solving a persistent last-mile delivery challenge. AI-Powered Demand Forecasting: Sophisticated prediction models that have significantly improved inventory placement and reduced delivery times. According to Amazon CTO Dr. Werner Vogels, key strategic priorities for their AI development include mission-driven workforce development, energy efficiency innovations, and tools for combating disinformation. Amazon Robotics Strategy: Automating for Efficiency The Amazon robotics strategy focuses on automating repetitive tasks while enhancing human capabilities rather than replacing workers entirely. Their warehouse robotics program now includes over 750,000 robots working alongside human employees. Recent advances in their robotics program include: Agentic Robotics: Systems that can understand natural language commands and adapt to changing warehouse conditions. Collaborative Robots: Machines designed to work safely alongside human workers, enhancing productivity while reducing physical strain. Autonomous Mobile Robots (AMRs): Self-navigating vehicles that transport items throughout fulfillment centers, reducing walking time for human workers. These robotics investments have improved warehouse efficiency by approximately 20% while also reducing workplace injuries by 32% since 2019, demonstrating how technology can enhance both productivity and safety. Amazon Fulfillment Network Strategy: Revolutionizing Logistics Amazon's fulfillment strategy leverages a vast network of over 185 U.S. fulfillment centers (as of 2025) for rapid, cost-effective delivery by positioning inventory close to customers. Continuous investment in automation and robotics, including their $1 billion Industrial Innovation Fund, drives logistics innovation and improves safety. Sellers can choose from two main Amazon fulfillment options: Fulfillment Method Description Advantages Disadvantages Fulfillment by Amazon (FBA) Amazon stores, picks, packs, and ships products Prime eligibility, higher conversion rates, simplified operations Higher fees, less control over inventory Fulfillment by Merchant (FBM) Seller handles storage and shipping Lower fees, more control, better for certain product types No Prime badge (unless SFP-eligible), lower conversion rates The choice between these options depends on product characteristics, margins, and operational capabilities. Many successful sellers use a hybrid approach, using FBA for fast-moving items and FBM for larger, lower-margin products. Recent innovations in Amazon’s fulfillment network include: Operations Innovation Lab in Milan: A testing ground for new logistics technologies before wider deployment. Last-Mile delivery solutions: Including Amazon Locker, Key by Amazon, and drone delivery trials. Sustainable logistics initiatives: Electric delivery vehicles and packaging reduction programs that align with environmental goals while reducing costs. Amazon Seller Performance Metrics: Key Success Factors Amazon seller performance metrics include order defect rate, late shipment rate, and cancellation rate. These metrics directly impact seller visibility, Buy Box eligibility, and account health, making them crucial for marketplace success. Key metrics Amazon uses to evaluate sellers include: Metric Target Impact if Below Target Order Defect Rate <1% Loss of Buy Box eligibility, potential account suspension Late Shipment Rate <4% Reduced visibility, loss of Buy Box eligibility Cancellation Rate <2.5% Reduced visibility, potential inventory restrictions Valid Tracking Rate >95% Reduced visibility, potential delivery performance warnings Customer Response Time <24 hours Lower seller rating, potential impact on Buy Box eligibility Amazon's strict performance standards, driven by customer experience, demand robust inventory, efficient fulfillment, and responsive customer service from sellers. This meritocratic system, prioritizing operational capabilities over traditional retail relationships, gives superior sellers an advantage. Amazon Advertising Platform: A Growing Revenue Stream Amazon's ad platform is now the third-largest in the US, generating over $46 billion in 2024 and significantly boosting Amazon's profitability. Recent updates like AI Audience Builder and Multi-Country Campaign View enhance its capabilities. For brands and sellers, Amazon’s advertising platform offers unique advantages compared to other digital advertising channels: High Purchase Intent: Amazon users typically have stronger purchase intent than users on social media or content sites. Closed-Loop Attribution: Direct connection between ad exposure and purchase behavior within the same platform. Rich Customer Data: Amazon’s extensive purchase history data enables sophisticated targeting. Product-Based Targeting: Ability to target competitors’ products or complementary items. Amazon's advertising platform is crucial for brands and retailers. Due to increased competition for organic visibility, paid advertising is now vital for success on Amazon, demanding specialized expertise and budget. What Factors Contributed to Amazon’s Success Over Time? What factors contributed to Amazon’s success over the decades? Several key elements stand out: First-Mover Advantage: Amazon recognized the potential of e-commerce earlier than most traditional retailers, allowing them to build infrastructure and customer relationships before competition intensified. Leadership Vision: Jeff Bezos’s clear strategic vision and willingness to make unconventional decisions provided consistent direction despite rapid growth and market changes. Patient Capital Approach: By prioritizing long-term market position over short-term profits, Amazon made investments that would have been impossible under traditional retail financial expectations. Strategic Acquisitions: Key acquisitions like Zappos, Whole Foods, and MGM strengthened Amazon’s position in strategic markets and brought valuable capabilities into the organization. Technological Innovation: Continuous investment in technology created competitive advantages across all business units, from retail recommendation engines to AWS cloud infrastructure. Flywheel Effect: Amazon created virtuous cycles where each part of the business reinforces the others, creating accelerating momentum as the company grows. These factors combined to create a uniquely powerful business model that continues to disrupt traditional industries and expand into new markets. Amazon Market Dominance: By the Numbers Amazon’s market dominance is reflected in impressive financial and operational metrics that demonstrate its continued growth trajectory: Metric Value Year-over-Year Change Market Capitalization $2.36 trillion 4th most valuable public company Net Sales (2024) $638 billion 11% increase Net Income (2024) $59.2 billion 95% increase Q2 2025 Net Sales $167.7 billion 13% increase AWS Revenue (Q2 2025) $30.9 billion 17.5% increase Active Users Globally 309 million 7% increase Registered Sellers 9.7 million 12% increase U.S. E-commerce Market Share 38-40% 2 percentage point increase Third-Party Seller Unit Share 60% 3 percentage point increase These numbers illustrate Amazon’s continued growth despite its massive scale, with particularly strong performance in high-margin businesses like AWS and advertising, with projected 2025 revenue of $700 billion. Competitors find direct competition difficult, opting instead to focus on specialized niches, unique customer experiences, or complementary services to gain an advantage. Amazon Future Outlook 2025: Strategic Direction and Predictions Looking ahead to the remainder of 2025 and beyond, several key trends are shaping Amazon’s strategic direction: AI Integration Across All Business Units: Amazon is accelerating AI deployment throughout its operations, from customer-facing applications like product recommendations to back-end systems for demand forecasting and logistics optimization. Healthcare Expansion: Following their acquisition of One Medical and launch of Amazon Pharmacy, healthcare represents a major growth opportunity with significant disruption potential. Sustainability Initiatives: Amazon’s Climate Pledge commitments are driving investments in renewable energy, electric delivery vehicles, and sustainable packaging that align with environmental goals, with operational efficiency. International Growth Focus: While North America remains Amazon’s largest market, they’re increasingly focusing on high-growth international markets, particularly India and Latin America. Regulatory Challenges: Growing regulatory scrutiny in the U.S. and EU may constrain certain expansion strategies and business practices, potentially creating opportunities for competitors. These strategic directions suggest Amazon will continue its pattern of disrupting traditional industries through technology and customer experience innovations while facing increasing competitive and regulatory challenges. Read about more interesting blog posts here: What is Dynamic Pricing?: The ultimate guide to dynamic pricing. What our the best pricing strategies?: Read about 17 pricing strategies for you as a retailer or brand. What is Price Monitoring?: Check out everything you need to know about price comparison and price monitoring. What is Value Based Pricing?: A full overview of how price and consumer perception work together. What is Charm Pricing?: A short introduction to a fun pricing method. What is Penetration Pricing?: A guide on how to get noticed when first entering a new market. What is Bundle Pricing?: Learn more about the benefits of a bundle pricing strategy. What is Cost Plus Pricing?: In this article, we’ll cover cost-plus pricing and show you when it makes sense to use this strategy. What is Price Skimming?: Learn how price skimming can help you facilitate a higher return on early investments. What is Map Pricing?: Find out why MAP pricing is so important to many retailers. Frequently asked questions Your frequently asked questions about Amazon's pricing strategy, the company's success, and insights into business strategies for retailers and brands. What makes Amazon different from its competitors? Amazon’s fundamental difference lies in its decision-making framework. While most companies make decisions based on competitor actions or financial metrics, Amazon starts with the customer and works backward. This customer-centric approach led them to create services like one-click ordering, personalized recommendations, and hassle-free returns before competitors recognized these as competitive advantages. Their willingness to cannibalize their own products to better serve customers, like developing Kindle to disrupt their profitable book business, demonstrates this commitment in action. Read More What makes Amazon different from its competitors? What is Amazon’s core business strategy? Amazon’s core strategy revolves around building what they call “customer love” through three pillars: vast selection, low prices, and fast delivery. However, the deeper strategy involves using these customer-facing benefits to generate data and scale that creates barriers for competitors. Every customer interaction provides information that improves their recommendation algorithms, inventory management, and pricing strategies. This data advantage becomes more powerful as their customer base grows, creating a self-reinforcing cycle of improvement. Read More What is Amazon’s core business strategy? How has Amazon’s strategy evolved over time? Amazon’s strategy has evolved from “Earth’s biggest bookstore” to “Earth’s most customer-centric company,” but the underlying principles remain consistent. They’ve expanded from books to everything, from retail to cloud services, from physical products to digital content. Each expansion follows the same pattern: identify customer pain points, develop solutions that seem unprofitable initially, then scale those solutions until they become competitive advantages. This evolution shows strategic consistency despite tactical flexibility. Read More How has Amazon’s strategy evolved over time? What role does technology play in Amazon’s success? Technology serves as Amazon’s primary competitive weapon, but not in the way most people think. Rather than using technology to reduce costs, Amazon uses it to improve customer experiences and gather intelligence about market trends. Their recommendation engine, dynamic pricing algorithms, and predictive analytics don’t just optimize operations, they create personalized experiences that increase customer loyalty and lifetime value. This technology-driven personalization at scale is something traditional retailers struggle to replicate. Read More What role does technology play in Amazon’s success? Why do customers remain loyal to Amazon? Customer loyalty to Amazon stems from what behavioral economists call “habit formation” combined with genuine value delivery. Amazon makes shopping so convenient and reliable that customers develop automatic purchasing behaviors. Their investment in customer service, easy returns, and consistent delivery creates trust that reduces the perceived risk of online shopping. Prime membership adds a psychological commitment device; customers want to maximize the value of their membership fee, which encourages more frequent purchases. Read More Why do customers remain loyal to Amazon? What can other businesses learn from Amazon’s approach? The key lesson from Amazon’s success is the power of long-term thinking combined with customer obsession. Most businesses can’t replicate Amazon’s scale, but they can adopt its decision-making framework: start with customer needs, work backward to solutions, and be willing to sacrifice short-term profits for long-term market position. Amazon’s success also demonstrates the importance of treating data as a strategic asset and using technology to enhance rather than replace human decision-making. Read More What can other businesses learn from Amazon’s approach?
The 7 Business Strategies of Amazon: Secrets Behind the Company's Success
09.03.2020
How Does Amazon's Search Algorithm Work?
Amazon’s search algorithm is a sophisticated system that has one goal: connect shoppers with relevant products as quickly as possible. If you can engineer your way to the top through organic search, it’s a free way to...
Amazon’s search algorithm is a sophisticated system that has one goal: connect shoppers with relevant products as quickly as possible. If you can engineer your way to the top through organic search, it’s a free way to improve sales and support brand visibility. And the good news is that this is possible through Search Engine Optimization (SEO). With some work and critical thinking, you can get your listings to appear favorably in Amazon’s search results. This article details everything you need to know about Amazon’s search algorithm: how it works, what’s important to consider, and how to boost your overall visibility. To learn even more about Amazon, check out our Complete Guide to Selling on Amazon in 2020. How does Amazon's search algorithm work? At its core, Amazon’s ranking algorithm is similar to Google’s search algorithm. It analyzes search queries for keywords, then tries to match customer desires with relevant products. Every day, Amazon tries to find relevant, informative, and trustworthy content to deliver to its customers. Amazon’s relationship with consumers is different than Google’s though, and as a self-contained platform it has access to a huge amount of data to use for search engine results. Increase revenues with Amazon Repricer Software Read more Increase revenues with Amazon Repricer Software Amazon A9 ranking algorithm Designed by A9, a subsidiary company of Amazon, Amazon’s search algorithm’s sole purpose is to connect shoppers with the product they’re looking for in as little time as possible. It’s built around the same philosophy as Amazon itself: deliver the best customer experience possible. Since Amazon’s goal is first and foremost to deliver a spectacular customer experience, it analyzes several different pieces of information to determine which products appear at the top of search results. The information the algorithm considers when determining product ranking include: Keywords: does your listing have the search terms consumers look for? Sales conversions: do your products sell well? Customer reviews: are customers happy with your products and service? Performance history: do you have a record of sustainable sales? Delivery time: do customers receive their products quickly? Price: are your products priced competitively? Amazon’s ranking algorithm evaluates a broad amount of criteria to determine who appears on the first page of a search, which is a lucrative place to be. Your products will be seen by more people, and you’ll be more likely to win the Buy Box. How do I find my Amazon ranking? To find your sales rank, search for the product on Amazon.com, locate your listing, scroll down to the “Product Details” section, and find the information for “Amazon Best Seller’s Rank.” This number is the ranking of the product in the category in which it is listed. How do you increase visibility on Amazon? There are three fundamental parts to your overall strategy that will help increase your visibility on Amazon. 1. Optimize your listings for SEO Optimizing your listing for keywords is the easiest way to get started increasing your visibility across the marketplace. One of the main things Amazon considers when deciding which products to display for a search result is keywords. This is for the obvious reason that consumers will type certain keywords into the search bar and want to be connected with relevant products immediately. You should learn what those keywords are for your products so you can start getting your listings in front of the right consumers. There are two ways to do keyword research. The first way to do keyword research is completely free: it’s to think logically about what keywords your target market might use to find a product like yours. If you’re selling a camera, for example, a logical place might be to start with “camera” or your brand’s name. The second way to do keyword research is more scientific. It involves using tools that tell you exactly what consumers search for in Amazon. These tools, like KeywordTool.io, MerchantWords, Viral Launch, and others can give you detailed information like search volume, frequent words, and related products. Some keyword tools are free. Some keyword tools have costs associated with them. You’ll be able to find one at any price point. Once you’ve determined which keywords you want to use, integrate them into your product title and listing in a way that’s organic and informative. Don’t be spammy though, because it quickly makes consumers suspicious of products. Keep your writing natural, and user-focused. Always follow best practices for SEO writing. Take some time to dive into what your target market searches for on the platform, what your competitors do to capture sales, and where there are opportunities for your product to shine. 2. Build better pages for increased sales conversions Optimization doesn’t end with keywords. After driving people to your listing through keyword research, it’s time to convince them to buy from you. You can do this by creating better product pages that clearly explain the features and benefits of your product. One of the variables that the A9 algorithm evaluates when deciding who to list in the top results for a search query is sales conversions. It does this for two reasons. First, the listings with best sales conversions are the listings that customers seem to deem the best solution to whatever it is they search for. Second, listings with high sales conversions also make Amazon the most money, whether that’s through fees or advertising sales. This gives Amazon even more incentive to push these articles to the top to drive even more sales. How can I increase my online sales on Amazon? There are several ways to increase your sales on Amazon. One of the easiest is to make sure your product listings provide enough information for consumers to make informed buying choices. To do this, evaluate your product description. Does it have keywords tactfully incorporated? Is it interesting to read and compelling? Does it answer questions consumers may have about your products? Make sure that all these components are included in the product description, and add bullet points, if possible. Additionally, look at the photos in your listing. Are they bright, clear, and inviting? The best photos on Amazon show all the details of a product and how it should be used. You can also include video in your listing to showcase your product even more. When you create a listing on Amazon, you can add a maximum of eight product photos to the page. You can add more engaging content though by paying for Amazon A+ Content, a service that lets you add more images, video and other multimedia content to your page. 3. Get great reviews Reviews are another logical way to improve your visibility across the platform (and increase your online sales on Amazon). If you have a high number of reviews, it’s a signal to Amazon that people enjoy your product and find it useful. If it’s useful for customers, Amazon will favor your product over others. Reviews help with more than just visibility though. When you get honest reviews, you can learn what customers like about your product or what they don’t like about the product, all feedback you can incorporate into the next iteration of your product. Are Amazon reviews important? Reviews are important for ranking well in Amazon’s search algorithm. In many cases, they’re more important than the actual brand of a product, as Fred Dimyan, CEO of Potoo Solutions (an e-commerce consultancy), explained in an interview with Wired . In the interview he points out the rise of direct-to-consumer or direct-to-Amazon brands like Cali White toothpaste that crush industry giants like Crest and Colgate. But Amazon’s rating system is not as straightforward as it appears. The search algorithm doesn’t just take a simple average of the available ratings. Instead, Amazon uses advanced machine learning to look for relevancy of ratings. It looks at the average star rating, of course, but also considers (among other criteria): How recently reviews were posted How frequently people post reviews Whether the reviews are from “verified” purchasers The algorithm calculates a star rating based on all this information and displays it on your listing. Surprisingly though, reviews are not as important as you may think. Skubana analyzed the top 3,000 organically-ranked Amazon pages and found that the number of reviews varied dramatically among top-performers. The company found that quality of reviews was significantly more important than the quantity of reviews, and that all the top items had overwhelmingly positive reviews regardless of the absolute number of reviews. The lesson: don’t focus your energy on getting a huge number of reviews. Focus instead on getting the best reviews you possibly can by providing a great product experience. Authenticity Amazon’s A9 algorithm tries to verify the authenticity of reviews. It’s easy enough for sellers to hire a clickfarm or freelancers to go and leave false reviews on products to boost visibility. Amazon recognizes this, and tries to prevent it with sophisticated detection methods. To combat this, Amazon launched the Amazon Vine program where Sellers can give products away for free in exchange for unbiased reviews from verified users. To enroll in this program, you will need to contact Amazon directly. Amazon SEO is only part of your marketing mix SEO for Amazon is an incredibly powerful tool in your marketing mix, but if you rely exclusively on SEO, you might be disappointed with your results. The sad reality is that keywords can only take you so far. The importance of advertisements has skyrocketed in the last three years. Even big brands have increased their Amazon ad spend to stay at the top of search results. Check out our Introduction to Amazon Pricing article for more information on this. This doesn’t mean that SEO isn’t a worthy investment. It just means that it’s only a part of marketing on amazon.
How Does Amazon's Search Algorithm Work?
13.06.2018
Doing ETL Process with Azure Technologies
Introduction Omnia processes millions of retailer’s products information each day to deliver the best prices according to their needs. To gain advantage from machine learning techniques Omnia began a new project to...
Introduction Omnia processes millions of retailer’s products information each day to deliver the best prices according to their needs. To gain advantage from machine learning techniques Omnia began a new project to backup and utilize its data to improve its business analytics and explore machine learning. The project has two main objectives: Backup data (about 38 GB per day, with expected growth in the coming months); Ability to create multiple ETL (Extract, transform, load) processes to make data available for diverse purposes a. This project ETL process is to transform unstructured data into business report data. Alongside that, we add the following technical requirements: Progress traceability and monitor the backup and the ETL; Facility to recover if something goes wrong in the process; Ability to scale the speed linearly to the amount of data; Flexibility to create multiple distinct ETL processes. As for constraints: Internet speed from our datacenter to Azure (about 50 MB/s); Couchbase version (3.0.0), cluster size and specs – to retrieve that for backup. Development The first step was to choose the technology stack and since Omnia is primarily a .NET shop we investigated Azure. This seemed reasonable due to the current offers and easy team adoption. To satisfy the backup requirement, Azure Data Lake Store (ADLS) seemed the appropriate choice, due to the facts: Unlimited storage capability; Backups with redundancy on the fly; Created based on HDFS and supports big files (talking hundreds of gigs). Omnia currently has its infrastructure designed around Hangfire to allow easy scheduling and monitoring of background jobs, so the backup to ADLS was created as another Hangfire job. We used the Dataflow library to be able to have a good degree of parallelism when inserting documents into ADLS. We decided to zip them (with a 4 MB size cap) because text documents have a good compression rate, we use less bandwidth between our datacenter and azure and file sizes have an impact of Azure Function processing time (this is constraint since Azure functions have short lifespans). For the ability to create multiple ETL processes with ease, Azure Functions seemed the best fit due to their serverless characteristic. Azure Functions are implementations of serverless architecture. The serverless architecture allows one to execute a business logic function without thinking about the underlying infrastructure, i.e., the functions run and live in stateless compute containers that are event-triggered. Moreover, Azure functions scale on demand, have automatic failover and business logic written in C# which promotes flexibility for business requirements. To trigger Azure functions, we selected Azure Storage Queue as it provides a reliable way to transmit information between applications. These characteristics met the non-functional requirements of scaling and availability to allow the transformation of hundreds of gigabytes of Omnia data. As for the business reports requirement, Azure has SQL Data warehouse (SQL DW) seemed a possible fit due to: Ability to manage large volumes (terabytes) of information; It distributes data across 60 databases (by default) and enables more partitions; Has column store indexes – enabling fast returns for every database column; T-SQL has aggregation function to summarize data; Ability to connect with Azure Analysis services; Combability with other Azure components is easy to establish - SQL DW also has a tool to connect ADLS called PolyBase. PolyBase parses files from ADLS and map them into SQL tables. Complete Process The process to perform the backup and the ETL process is represented by the sequence diagram in Figure 1. Figure 1 Backup and ETL (simplified process) The process starts with a Hangfire job batch that inserts data into ADLS. Every time a file is added onto ADLS, a message is inserted into unzip message queue and the Unzip function is triggered. After the file is extracted into ADLS another message is inserted on transform message queue to trigger the Transform function that splits the file into several CSV files. When all files are converted to CSV, PolyBase is then manually triggered to insert data into SQL DW. This process has a central information point, ADLS, and a good scalability due to the use of Azure functions. Traceability is achieved by using the paths as the file name of the file. An important aspect to organize the ETL’s information was folder structure. Each ETL phase has a specific folder identified by a date folder structure and the file unique name. The folder structure is: Backups Year/Month/Day/Guid_N_Total.zip Unzip Etl/Unzip/Year/Month/Day/Guid_N_Total.json Final Files Etl/Csv/Year/Month/Day/BusinessFolder/Guid_N_Total.csv Etl/Csv/Year/Month/Day/BusinessFolder2/Guid_N_Total.csv ... To monitor all these functions, we used Azure’s application insights and found it easy to understand if something went wrong. Although, a single monitoring system needs to be set up to enable an overall monitor of the three different resources, and an automatic verification system to assure if all the backup files were transformed and inserted. Tips from our development process Don’t build Azure functions with more than one objective. Keep them short and precise, otherwise, they will fail and terminate midway through; Keep in mind that if the same message might be caught by multiple azure functions and your process must predict that same behaviour; Think about the process with monitoring in mind and the ability to execute specific parts; Have a correlation identifier to represent the entire ETL process. That will allow you to aggregate all the data regarding that specific run and monitor it; Use PolyBase to upload data to SQL DW instead of SISS. PolyBase was made to work with ADLS, and Microsoft as a lot of documentation on how to use it; When adding data to SQL DW, use CTAS (Create table as select) – it makes the data insertion faster and you can it to merge two tables without duplicates; To fully achieve the full SQL DW potential you need at least 60 million rows evenly distributed across all the 60 databases that it provides. Be aware of it, when developing your solutions. When creating SQL DW database study the data carefully; think how you are going to use, how you are going to partition and distributed across the database. Conclusion This project is still underway, but so far, we are happy with the results achieved. This process allowed us to backup and transform, 38 GB - about 10 Million Couchbase documents, in 1 hour and 40 minutes. Our prominent bottleneck lies on our on-premise infrastructure where hang fire batch jobs run. However, this runtime suits fits our current need, and it can be scalable by increasing the number of job slots available to perform the batch. The Azure functions occurred in parallel with the backup and that time is encapsulated by our thought-put into ADLS. PolyBase’s ingestion time to SQL DW is another project itself because it’s related with other factors such as the process units chosen for the database, the data model designed and the amount of information already stored. The next steps will be achieving a way to monitor all 3 components and assure that all backed-up data was indeed transformed and automate the PolyBase ingestion.
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