Walmart is subsidizing lower prices on its site to help it compete with Amazon, according to a report in Bloomberg. The beneficiaries are Walmart shoppers – and an unknown number of third-party sellers on Walmart.
The new program will temporarily lower prices for some items on its marketplace site, but the company will pay third-party merchants “the same amount that was listed before the cuts, with Walmart subsidizing the difference,” according to the article.
Walmart’s Competitive Price Adjustment program will be applied to selected sellers and selected items only, Bloomberg reported.
The news outlet believes the program may be a response to Amazon SBA (Sold by Amazon), a program reported by CNBC in August.
CNBC described the SBA test program as letting Amazon “control third-party product prices in exchange for a minimum payout to sellers.”
Bloomberg also pointed out that Amazon reportedly pressures vendors not to make their products available at lower prices on Walmart.com or other rival websites.
‘Selected sellers and selected items only’…. W-M is probably leaning on the manufacturers of those items to make up any cost difference. W-M is NOT doing this from its own bottom line. The items and third-party sellers probably must be pre-approved in the background somewhere, and the manufacturer(s) of those products will have agreed to either pay the difference, or W-M fronts the money and deducts it from invoices if W-M also carries those items.