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Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

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Re: Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

#11

Post by frgtpsswrdlame »

JumpCrisscross wrote: post #8
frgtpsswrdlame wrote: post #3

Here's what I don't get. Why do a price match guarantee? Why not just price your items lower? Or do a "match" where you guarantee every item for 10 cents cheaper than your competitors?

> Why do a price match guarantee? Why not just price your items lower? MAD [1]. Price-match guarantees are meant to deter price competition. If you cut your price below a price-matching competitor's, the time you have the best price will be short. After that, less profit for everyone (assuming similar cost structures). If, on the other hand, you match, everyone keeps their market share and margins. Price competition…

Don't we want companies to engage in price competition though? Especially in a market with network effects which is dominated by a few large players.

Re: Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

#13

Post by qeternity »

frgtpsswrdlame wrote: post #11
JumpCrisscross wrote: post #8

Earlier quoted context omitted.

> Why do a price match guarantee? Why not just price your items lower? MAD [1]. Price-match guarantees are meant to deter price competition. If you cut your price below a price-matching competitor's, the time you have the best price will be short. After that, less profit for everyone (assuming similar cost structures). If, on the other hand, you match, everyone keeps their market share and margins. Price competition…

Don't we want companies to engage in price competition though? Especially in a market with network effects which is dominated by a few large players.

What OP is saying is that this isn't competitive, rather it's a way to signal to other participants not to cut their prices. They can't do this outright because that would be collusion and violate anti-trust laws. OP referenced MAD which is the cold war tactic of mutually assured destruction. Basically, if you nuke me I nuke you back and we all die...so nobody nukes anyone. This is the same but with price competition. If you cut your prices to try to gain market share, I'll cut mine too. You'll gain no market share but you will lose revenue.

Re: Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

#14

Post by SparkyMcUnicorn »

elahd wrote: post #10
frgtpsswrdlame wrote: post #3

Here's what I don't get. Why do a price match guarantee? Why not just price your items lower? Or do a "match" where you guarantee every item for 10 cents cheaper than your competitors?

Agreed. Prices being equal, why would I go with eBay? Their customer service and return policies are awful. It's 10x worse if you pay through PayPal. Amazon is basically no questions asked.

Return policies are per vendor. With eBay, it's almost too easy to get your money back and sellers take the hit when it isn't their fault.

In order of easiest returns: "Sold and shipped by Amazon" -> eBay -> Amazon 3rd party vendors.

Re: Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

#15

Post by dsfyu404ed »

This doesn't make sense to me except as a marketing move.

For new items eBay's advantage is that you can buy in low volume straight from china (if you don't mind waiting a month) or from an importer who's running their operation out of a storage locker or basement. The prices are reflective of the decreased overhead compared to selling on Amazon (or some other "less flea-market like" option).

If you're shopping for something and don't want to wait for it to ship from China odds are you could already find it on eBay cheaper than Amazon in the first place.

This move is just publicizes and existing advantage.

Re: Ebay will match Amazon’s, Walmart’s and others’ prices on over 50K items

#18

Post by mcphage »

frgtpsswrdlame wrote: post #11
JumpCrisscross wrote: post #8

Earlier quoted context omitted.

> Why do a price match guarantee? Why not just price your items lower? MAD [1]. Price-match guarantees are meant to deter price competition. If you cut your price below a price-matching competitor's, the time you have the best price will be short. After that, less profit for everyone (assuming similar cost structures). If, on the other hand, you match, everyone keeps their market share and margins. Price competition…

Don't we want companies to engage in price competition though? Especially in a market with network effects which is dominated by a few large players.

> Don't we want companies to engage in price competition though?

As consumers, absolutely we do. But the person asking the question asked why companies don't do that, and the answer is that it's a bad business decision for them.

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