Amazon's "Competitive Price Threshold" and how Marketplace Management manages it

How can Marketplace Management provide you with the most ROI for your Amazon listings while taking this into consideration?

Marketplace Management provides competitive repricing options for your active Amazon inventory. For several years we have been working on providing an optimal repricing algorithm and it is focused on gaining the Buy Box. Not only will we reprice your items effectively but we will also attempt to price up when the buy Box is achieved. 

Recently Amazon has introduced a new value that is critical in achieving the Buy Box. This value is presented to Marketplace Management with every update from Amazon. This is called the "Competitive Price Threshold"

The definition of "Competitive Price Threshold" or CPT:

Per Amazon's documentation:

"A price is based on competitive prices from other retailers (excluding other Amazon sellers). The offer may be ineligible for the Buy Box if the seller's price + shipping (minus Amazon Points) is greater than this competitive price."

This specific dollar amount is provided with each market data update from Amazon to Marketplace Management.

How Marketplace Management can help reprice with CPT in mind:

Using our Algorithmic Buy Box strategy, we will competitively reprice your products while referencing the Competitive Price Threshold.

At this time we will only see the CPT for Win the Buy Box strategies on Amazon. This value is not considered for Target Rank pricing strategies. 

  • If your locally stored Minimum Price is below the CPT value, we will reprice at or above the CPT value. Our system will understand that if you're lower than the CPT price point then you will not achieve the Buy Box. 
  • If your locally stored Minimum Price is above the CPT value, we will reprice to your nearest competition as our system will know that you want to achieve the highest ROI if you're ineligible for the Buy Box. 

Here is a outlined example of CPT in play:

Your selling price = $25

Competitive Price Threshold = $17

Your closest competitor's selling price = $22

If your Minimum price was $15 (below the CPT price):

  • We will attempt to price to $17 to match the CPT Price. If the Buy Box is not obtained then we will attempt to find a more competitive price point. 
  • We will not go lower then $17 because we know you would still not gain the Buy Box (per the CPT)

If your Minimum price was $18 (higher then the CPT price):

  • Marketplace Management will ignore the CPT price and instead look at the next competitor at $22. We will then reprice to compete with the other competitor on that offer. 
  • We know we won't get the Buy Box price at $22 but we also know that going to $18 would still not obtain the Buy Box

Frequently asked questions:

I am looking at the Pricing History and I see the reasoning called "Exceeded Amazon's Competitive Price Threshold ". What does that mean?

image (3)

  • This means that the algorithm wanted to price above the Competitive Price Threshold (CPT) and your Minimum Price is below the CPT value. In this situation, Marketplace Management did want to increase the price for this offer but Amazon advised us (via the CPT price) that you wouldn't achieve the Buy Box if you moved higher. 
  • In this scenario, the best option might be to adjust your Minimum Price OR try a different pricing strategy on that given offer. 

    Can I see what the Competitive Price Threshold is within the Marketplace Management interface?

    • At this current time, you cannot see this value within Marketplace Management. This information is provided in the raw data from Amazon. This value is visible to members of our Support Team so you can open a Support ticket if you're curious about what the value is. 
    • We do plan on adding this to the Competition pop-up window in the future.