Why Amazon's pricing strategy is now driven by smaller competitors
Amazon’s pricing strategy has undergone a quiet but significant AI-led shift. The Amazon scraper now looks at smaller retailers too, and that is making everyone rethink their entire pricing strategy.
International Business Development Manager
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Amazon is a high intent marketplace. When shoppers log on, they’re ready to buy. Google Shopping, on the other hand, is more commonly used for price comparison, with shoppers seeking the best possible deal. That’s why Amazon has often spent well to perform well in Google Shopping results.
But in July 2025, Amazon cut its Google Shopping ad spend to near zero across all markets without explanation. It quickly vanished from the results.
At the end of August, Amazon restarted its spending – and with a new way of staying competitive. Amazon’s pricing tool now uses AI to scrape prices from smaller retailers on the long tail, not just major ones. That changes the game for everyone – and has a knock-on effect on Google Shopping too. That means adjustments for your pricing strategy.
Amazon’s return to Google Shopping
When Amazon paused almost all Google Shopping ad spend globally, it made no announcement. But by the end of August, its spending had been restored. Whether it was a cost-cutting move between 4th July in the US and European summer sales, or an incrementality test, is still unclear.
That absence led to a shift in Google Shopping results. Take a UK shopper searching for ‘drill’ as an example. Without Amazon flooding SERPs, local players like B&Q, Wickes, and Screwfix benefited. Smaller regional retailers also climbed the rankings, likely at lower CPCs.
When Amazon started spending on Google Shopping ads again in August 2025, it reclaimed its position fast. That’s why visibility and your CPC matter, and why any pricing strategy needs to be omnichannel.
Smaller retailers are now sending pricing signals
Pricing signals no longer come from major players alone. The long tail of smaller retailers can now easily move that needle as well.
For large resellers, this means closer monitoring of competitor prices. You’re far more exposed to being undercut by small players on Amazon than you were a year ago. That’s where pricing intelligence comes in. You automate your scraping so you know exactly where price movements originate, and avoid sales channel conflict – or, worse still, a price war.
But Amazon’s pricing tool isn’t simply looking for the lowest price. It optimises for dynamic pricing, so it maximises margins while remaining competitive enough to win the sale. In the short term, Amazon will lose money on specific products they consider essential to its storefront so that they remain competitive. In fact, it often uses these loss leaders as basket openers and as a driver for Prime membership subscriptions.
Why does this change everything for brands
There’s now a greater core risk of loss of control over perceived market price. With far more retailers influencing Amazon’s pricing, there are more places where price erosion can begin.
Price erosion and brand positioning
Previously, basic competitor price monitoring gave you a clear picture. Today, you need pricing intelligence across the full retailer landscape and the likely sources of channel conflict. If a smaller retailer begins aggressively discounting, there’s more at stake than just margins. Your brand positioning could be jeopardised.
If your brand is positioned as mid or high-range, shoppers are more likely to accept higher prices. When they start seeing your products at a lower price over a sustained period of time, perception shifts – and it’s hard to reverse that trend once it begins. For example; Burberry’s push from high street name to functional luxury was met with stiff consumer resistance, with some labelling the move pretentious.
The Google Shopping effect
Amazon optimises to be the cheapest listing on Google Shopping, which matters more as consumer consideration phases drag on and belts continue to be tightened. Smaller retailers now influence that process disproportionately as their short-term or flash promotions, or undercut prices, can influence the overall Amazon listing, driving the price down.
This creates pricing volatility and unpredictable product-level demand. That’s why having a complete overview of your entire product range is more important than ever before. We see this in PriceShape data, too.
PriceShape data found during Black Friday 2025 in the UK, Amazon shoppers chose the older iPhone 12 over the newer 16e model as they felt it offered better value. Black Friday is one specific period of the year, but this is an example of why you need a pricing strategy across more than just store leaders and basket openers, as older stock can suddenly pick up.
Amazon’s pricing strategy affects your pricing strategy
Competitor price monitoring of key rivals is no longer enough. You need full market visibility: every price point, every retailer, and every market movement. It’s the only way to know what’s impacting your margins.
Price tracking tools, such as PriceShape, automate this, helping you build a complete picture of who’s selling your products, at what price, and where. The right tool finds problems the moment they appear.
With Amazon now scraping the long tail of smaller retailers, a price tracking tool will help you track both large and small competitors – and know what’s being charged and where. It will give you an overview at a glance.
In short, the right price tracking tool will help you do two key things with your pricing strategy:
1. Negotiate with resellers using data
If you have concerns that a certain reseller is undervaluing your product and potentially leading others to do the same, you can go into talks with evidence. With the right numbers, you can show which of your products sell well and can contribute towards a stronger perceived market price. This helps you stay in greater control of your brand positioning in a faster market landscape.
2. Spot sales channel conflicts
When a sales channel conflict begins, it can quickly spiral into a price war. Without a pricing tool, you’ll likely only hear about this through third parties, such as your resellers. With the right pricing tool, you can quickly see where the problems begin, allowing you to take swift action.
Marketplaces that price match Amazon
There is a range of regional sites that match the prices listed on Amazon’s listings. These are just a few of them, even if their pricing strategy differs from Amazon’s pricing strategy.
1. Allegro
Poland’s most used marketplace, Allegro is a regional champion that aims to match Amazon’s prices wherever possible. Poland’s population is less than 40 million, but Allegro is the 10th most visited e-commerce site globally.
2. Otto.de
Otto.de is a German competitor to Amazon. It’s strong in Germany, but lags behind Amazon DE. Otto.de competes directly with Amazon on price, particularly on fashion and electronic items.
3. Böttcher AG
Another German marketplace, Böttcher AG, actively matches its competitors in its listings, including Amazon. Böttcher AG is often used for larger DIY equipment (like lawnmowers) and business supplies.
Practical actions you can take
With the right pricing tool in your tech stack, you can take practical actions that will help you with Amazon’s pricing tool. Here are three tips to get you started:
1. Track both small and large competitors
This is now a given following the change in Amazon’s scraping policy. With their scraper catching that small reseller longtail, you need an equally good overview of it. Automate this so you can easily track movement and see where any price movements begin.
2. Segment competitors by impact
Not all competitors will have the same impact on your perceived market price. Your biggest competitors might be able to take a temporary hit by undercutting you. Equally, smaller competitors could decide to use your product as a loss-leading basket opener over an extended period of time, resulting in a hit to that all-important perception.
3. Don’t just aim for the lowest price
When prices begin to move, it can be tempting to just go lower with them. But that only results in a zero-sum game that could even end in a price war, harming your perceived market value. Remember, Amazon doesn’t necessarily aim for the lowest price either. It optimises for dynamic pricing – the prices that offer that combination of value and margin protection.
With these practical tips, you’ll be well on your way to making the most of Amazon’s new pricing strategy.
The key takeaways
The shift in Amazon’s pricing strategy to using AI to scrape smaller retailers is forcing a wholesale rethink of pricing strategies. Pricing shifts no longer come from a predictable handful of major players; they can now come from a small regional retailer. And with 2.5 million daily price changes on Amazon, those shifts can happen fast.
For brands, that means more risk of price erosion and lost control over how your products are perceived in the market. For resellers, it means competing with a much longer tail of resellers, any of whom could undercut you and trigger a price war before you even know it’s happening.
The Google Shopping layer makes this even more urgent. Amazon doesn’t just optimise prices on its own marketplace; it optimises to stay competitive across Google Shopping too. With consumer budgets tightening and consideration phases getting longer, that ripple effect hits harder than it used to.
None of this means you need to race to the bottom. But it does mean you need to monitor the whole market – with both large and small retailers – to ensure you spot any shifts as quickly as possible, and spot where Amazon is scraping its prices. More than ever, automation is key – and with the right price tracking tool acting as a backbone, you can remake your pricing strategy.
FAQ
What changed about Amazon's pricing strategy in 2025?
Amazon’s pricing tool now uses AI to scrape prices from smaller retailers across the long tail, not just major competitors. This means pricing signals can come from regional or niche retailers, and shifts can happen fast. There are around 2.5 million daily price changes on Amazon.
How does Amazon's pricing strategy affect brands and resellers?
Brands face a greater risk of price erosion and losing control over their perceived market price, since smaller retailers can now influence Amazon’s listings and damage perceived market value. Resellers are more exposed to being undercut by long-tail competitors, which can even escalate into a price war if it goes unnoticed.
How can businesses protect their margins with Amazon's new scraper?
Businesses need full market visibility through automated price tracking that covers both large and small competitors, segmented by their likely impact on perceived market price. Rather than chasing the lowest price, the goal is dynamic pricing that balances competitiveness with margin protection – the same approach Amazon itself uses.