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Originally Posted by HoraceWimp
Standard retail pricing generally endeavours to put a product in front of a customer at a competitive price with their competitors. The customer makes a buying decision based on that price and factors in other considerations such as value for money versus service, convenience of buying etc. That price doesn’t always have to be the lowest one.
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It doesn't have to be, but it usually is because that's what customers are most interested in. Having said that, Amazon is *also* pretty convenient, has good service, etc.
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Predatory pricing is deliberately designed to undercut competition prices with the sole aim of putting them out of business. So far Amazon’s strategy has worked reasonably well, they’ve held them down for long enough to put competitors out of business.
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No, you don't understand predatory pricing. It is perfectly fine and 100% legal to have prices so low that they drive the competition out of business. Whether or not your competition goes out of business is none of your concern; it's certainly not something that you should think about when setting your own prices.
What predatory pricing actually is is selling your products *at a loss* to unfairly hurt your competition. (And this expressly doesn't include loss leaders, which retailers have used for a century). There's plenty of evidence that Amazon has not engaged in predatory pricing, and no evidence that they have. This is well documented. The fact that other companies can't match Amazon's prices probably has more to do with legacy costs that they have and Amazon doesn't. That's hardly Amazon's fault.