Walmart Takes on Amazon with New Pricing Program

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Walmart is launching a program called “Competitive Price Adjustment” that will temporarily lower the prices consumers pay for some items on its marketplace, according to Bloomberg.

Third-party vendors will pay Walmart a fee to list their goods and sellers on the site will be paid the same amount that was listed before the cuts were made, with Walmart subsidizing the difference. The pricing reductions won’t impact shipping fees.

This move comes in the wake of a similar move Amazon made this past summer where it had full control to set prices of third-party products on its marketplace in return for a minimum payout.

According to Bloomberg, Amazon came under scrutiny for leaning on vendors to make sure that their products weren’t offered for a lower price on Walmart.com or any other rival marketplace.

The price war comes as the Federal Trade Commission is looking into Amazon’s business practices, interviewing vendors to determine whether the company is aiming to stifle the competition.

Walmart’s program will be applied to selected sellers and items only. Sellers cannot request to be included. According to Bloomberg, the program looks very much like something Amazon introduced two years ago called “Discount Provided by Amazon.”

Amazon’s program cut prices to third-party products for a limited time, then paid the seller the difference between the discounted and listed price. These programs help ensure that vendors get the most prominent positioning on Amazon’s site.

Weeks ago, Amazon introduced “Sold by Amazon” where sellers give Amazon permission to cut product prices at will in exchange for a guaranteed payout to help protect their profit margins. Amazon has also made it easier for customers to buy single, inexpensive items without having to pair it with other items to meet a minimum order threshold.