Amazon Pricing Strategy: How Pricing Architecture Impacts Retail and Brand Equity

The prices customers and retailers see on Amazon rarely stay confined to the platform. They set benchmarks that ripple into wholesale conversations, DTC performance, and long-term brand equity.

When Amazon Sets The Reference Price

Amazon is typically the first place most customers check for product value. Therefore, if this platform discounts or undercuts a product’s price, the new lower price quickly becomes the standard across all other sales channels. There are many ways to lower the price, such as sales, retail allowances, or actions by resellers. Moreover, retail buyers frequently use the prices seen on Amazon to justify requests for cost reductions, and customers attribute their willingness-to-pay to the figures observed online. Ultimately, this dynamic can fundamentally reset the pricing architecture far beyond the Amazon marketplace itself.

The Challenge Of Maintaining Channel Harmony

Conflict arises from poorly managed pricing on Amazon, which has several negative consequences. Customers, accustomed to frequent discounts, may perceive the brand as less premium. If retail partners consistently experience undercutting, they may object to a higher Recommended Retail Price (RRP) positioning. Allowing this situation to persist erodes margins, disrupts crucial retailer relationships, and ultimately damages the brand’s reputation across all product categories.

Strategies Brands Can Deploy

SKU Segmentation: Use multipacks, bundles, or exclusives online to protect single-unit retail pricing.

Promotion Alignment: Coordinate Amazon event days such as Prime Day and Black Friday with retailer activity to minimise conflict and reinforce a consistent story.

Profitability Modelling: Factor in FBA fees, advertising spend, and trade allowances to calculate true contribution margin before setting pricing structures.

Reseller Control: Implement selective distribution or authorised reseller agreements to prevent uncontrolled discounts wherever possible.

Building A Sustainable Pricing Framework

Leading brands do not view Amazon as a perpetual discounting channel. Instead, they position the platform at the heart of their pricing architecture, leveraging profitability-led planning, premium content, and a consistent brand narrative to safeguard equity. Managed in this manner, Amazon strengthens retail negotiations, safeguards channel margins, and supports long-term growth.

Final Thought

Pricing decisions on Amazon never exist in isolation. These decisions influence customer perception of value, retailer negotiations, and the protection of brand equity within competitive categories. Consequently, a deliberate, well-managed pricing architecture creates clarity, consistency, and control across all sales channels.

Market Rocket works with global brands to build pricing strategies that protect margin, align channels, and reinforce brand value while unlocking growth on Amazon. If a brand is experiencing pricing pressures, the team would be glad to share how they can help..

Want to see your Amazon performance skyrocket?  Book a call with our team or email us at amazon@marketrocket.co.uk to take your brand to the next level.