Basically the objective of all the pricing options amazon offers is to ensure the price is the lowest that amazon could offer at the time of your purchases. If we evaluate the pricing strategy basing on the five C’s of pricing, we could figure out that how amazon could offer lower prices. Firstly, amazon.com is online retailer. Thus it could get all merchandises from producers at a lower cost. Furthermore, since amazon doesn’t have physical stores, it need not bear in-store operation overhead, amazon “realizes that the only way to satisfy customers and at the same timer make sure that Amazon enjoys the benefits of time and cost efficiency is to maintain its own warehouse. It enables amazon to lower its cost, and therefore provides lower prices to customers. Also, just same as the goal of distribution strategy that make you products available to consumers whenever and wherever they want it, pricing needs to guarantee the convenience of purchase experience and that is, to make sure we provide whatever payment options that is secured, convenient, and favored by various consumers. Consequently amazon offers multiple payment methods ranging from PayPal to amazon’s gift certificates. Moreover, amazon’s pricing model is more like a high/low pricing, giving the opportunity for everyone around the world to track to lowest price by adding shipping and currency converting service. It also helps to expand their customer base by making the website accessible to people around the world.
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