How Amazon's pricing team works to deliver low prices eve...

Key takeaways

Amazon's CEO of Worldwide Stores, Doug Herrington, discusses how the company keeps prices low with Amazon’s VP of Pricing and Promotions, Christa Glenn, in a new Learn and Be Curious podcast episode.
The company compares prices across thousands of retailers to ensure customers are getting the best deal on any given item.
Amazon's pricing tenets are purposefully asymmetrical: it's always easier to lower prices and harder to raise them.

When you find something on Amazon, chances are you're getting it at the lowest price available. That's not an accident—it's by design.

In the latest episode of the Learn and Be Curious podcast, Amazon's CEO of Worldwide Stores, Doug Herrington, sat down with Christa Glenn, VP of Worldwide Pricing and Promotions, to discuss how Amazon's pricing strategy sets it apart.

"Most retailers think about pricing slightly differently," Herrington said. "Pricing is like a lever—should I lower the price to drive sales or increase the price to drive profitability? We came up with a different idea, which says, let's not have the pricing team focus on that at all. Let's just have them focus on having competitive prices."

Amazon's first pricing tenet makes the company's philosophy clear. "We offer low prices to customers across the full breadth of selection that we offer,” she said. “We don't maximize for profit. But we take it as an article of faith that investing in this over the long term creates customer value."

In practice, that means comparing prices across thousands of retailers in real time. "We're really looking to ensure that our prices are the same or lower as anywhere you might find that selection if you were shopping on any given occasion," Glenn said.

Amazon has also invested in tools that let customers verify prices for themselves. The company's price history feature now shows 365 days of pricing data on products. "Customers don't want us to tell them it's a great price," Glenn said. "They want us to show them, with data, why it's a great price."

Third-party research supports the approach: According to Glenn, an annual report by the research firm Profitero has found Amazon has had the lowest prices of any retailer for nine years running.

"We don't want customers doing the hard work," Herrington said. "Every time they check and say, 'I'm getting it for as good or better price on Amazon,' it's going to engender trust and they're going to want to come back and shop with us."

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