Amazon begins offering big discounts even on third-party goods

Amazon.com Inc has quietly started lowering prices by as much as 9 per cent in recent weeks on goods offered by independent merchants on its site, moving beyond its more typical method of discounts on items it sells directly.

The move ratchets up a price war with other retail giants, while also potentially straining its relationship with some sellers.

Until now, Amazon has generally controlled prices only on merchandise it sells directly to consumers. Now, it is discounting some items sold by third parties, covering the cost difference itself to ensure competitive pricing.

The ''discount provided by Amazon'' applies to products including board games and technological gadgets offered by other merchants as the holiday season approaches. The retailer has been trying to compete aggressively on some items to win sales and draw customers away from low-priced rivals like Wal-Mart Stores Inc.

The move allows Amazon to sell the products at lower prices while still giving full price to the sellers.

This strategy, reported as reported by The Wall Street Journal, Reuters and others, seems to be mainly for American markets and it is not clear if it applies to India, where the main shopping season of Diwali – which saw huge discounts from online retailers - is over and Christmas is not nearly as big a shopfest.

''When Amazon provides a discount, customers get the products they want at a price they'll love, and small businesses receive increased sales at their listed asking price,'' an Amazon spokeswoman said in an emailed statement, noting that businesses can opt out at any time.

Marketing the items at lower prices, however, risks angering Amazon's third-party sellers, who instead could list their products elsewhere online. The move has drawn attention within Amazon Services' seller forum.

Some merchants have criticized Amazon in the past for discounting and, they say, devaluing their products.