How to Avoid a Price War on Amazon

Selling on Amazon is fiercely competitive, and when sellers keep lowering prices to outbid each other, it can lead to an all-out price war – where nobody wins. Profit margins shrink, and you are left without the expected earnings. 

So, how can you stay competitive without slashing your prices to unsustainable levels? The key to success lies in in-depth product research before you buy. Understanding the competition, analyzing how well a product sells, and studying Buy Box behavior can help you make smart sourcing decisions that prevent you from getting caught in a race to the bottom.

This article will walk you through actionable strategies to avoid a price war and build a sustainable, profitable Amazon business.

What Is the Amazon Price War?

An Amazon price war happens when multiple sellers of the same product continuously lower their prices to outbid each other and win the Buy Box. This aggressive pricing competition can quickly erode profit margins, making it difficult for sellers to stay profitable.

Price wars often start when sellers fail to differentiate themselves, rely solely on price to attract buyers, or overlook key market factors like product demand, competition levels, and Buy Box price consistency. While it may seem like lowering prices is the fastest way to increase sales, constant undercutting can lead to unsustainable profits and stock devaluation.

To avoid getting caught in a price war, sellers need a smarter approach—one that focuses on thorough product research, understanding competition intensity, product price history, and applying strategic sales approaches.

How Does the Price War Work?

An Amazon price war starts when multiple sellers of the same product begin undercutting each other’s prices to win the Buy Box—the highly coveted spot that controls the majority of sales on a product listing. Since most customers buy from the Buy Box winner, sellers often believe that lowering their price is the only way to secure more sales.

However, once one seller lowers their price, others quickly follow, creating a downward spiral where profits shrink, and margins become razor-thin. In some cases, automated repricing tools make things worse by continually adjusting prices lower in response to competitors, sometimes even driving prices below cost.

At a certain point, one of the competing sellers reaches the break-even price level when they can’t lower the price anymore because they will lose profits. The fight between the sellers willing to undercut their rivals can even force them to make a loss just to preserve their Buy Box share or make a sale. 

Example of an Amazon price war

Imagine there are five sellers offering the same wireless earbuds, priced initially at $39.99.

1. Seller A drops their price to $38.99 to gain the Buy Box.
2. Seller B responds by lowering their price to $37.99.
3. Sellers C, D, and E follow, each undercutting by $1.
4. Within a few hours, the earbuds are selling for $29.99, a 25% drop in price.
5. If sellers continue this race to the bottom, the price could drop so low that no one makes a profit, forcing some sellers to exit the market or sell at a loss just to clear inventory.

This type of aggressive price competition can be devastating, especially for small or new sellers who can’t afford to keep lowering prices. That’s why avoiding price wars through smarter product selection and pricing strategies is essential to long-term success on Amazon.

Why Avoid a Price War?

Getting caught in a price war can quickly drain your profits and put your business at risk. If you win a price war, it may seem that your sales grow. However, this is more of a short-term effect that will rarely generate increased profits. A price reduction of 1% can result in decreasing your profits by more than 10%.

Avoiding a price war isn’t about giving up on competition – it’s about competing smarter to maximize your profits and build a sustainable reselling business on Amazon. Here’s why avoiding a price war is critical.

Shrinking profit margins

Constantly lowering prices to compete can leave you with razor-thin margins – or even losses. The more sellers engage in a price war, the harder it becomes to make a sustainable profit.

Unsellable inventory

If prices drop too low, you might be stuck with inventory that you can’t sell at a profitable price. Long-term storage fees and price fluctuations can turn a once-profitable product into a financial burden.

No long-term business stability

Winning the Buy Box at the lowest price may generate short-term sales, but it’s not a sustainable business strategy. Resellers who rely only on pricing competition often struggle to scale and maintain consistent profits.

Automated repricers can work against you

Many sellers use repricing software that automatically lowers prices in response to competitors. This can create a race to the bottom where prices drop uncontrollably, making it difficult to maintain profitability.

Smarter strategies lead to better profits

Instead of competing solely on price, successful resellers focus on in-depth product research, analyzing competition, and understanding Buy Box rotation. Choosing the right products from the start can help you stay competitive without constant price-cutting.

How to Avoid the Amazon Price War?

The best way to deal with an Amazon price war is to avoid it altogether. Instead of constantly fighting to lower prices, smart resellers focus on strategic product selection and market analysis to maintain profits without getting caught in a downward spiral. Here are six proven strategies to help you stay competitive without sacrificing your margins.

Strategy 1. Don’t engage in a price war – wait until competitors sell out

Instead of rushing to lower your price, sometimes the best strategy is patience. If you notice competitors engaging in aggressive price-cutting, wait until they sell out of stock. Once they’re gone, you can sell at a more profitable price. This works especially well for products with limited sellers.

How it works

Instead of lowering your price to compete, monitor your competitors' stock levels and wait for them to sell out. Once they run out, you can sell at a more profitable price without cutting into your margins.

With Seller Assistant's Offers feature, you can determine in real time how much stock each competitor has. This information appears on Amazon product pages and on your supplier websites side by side, helping you track inventory levels and plan your pricing strategy accordingly.

Pros

✔ No need to compete on price, preserving your margins.

✔ Allows you to sell at a higher price once competitors run out.

✔ Works well for products with fluctuating stock availability.

Cons

✘ Requires careful stock monitoring and patience.

✘ If competitors keep restocking, you may be stuck waiting too long.

✘ Doesn’t work well for highly saturated listings with many sellers.

Note. Seller Assistant is all-in-one product-sourcing software offering 20+ tools that helps Amazon sellers quickly find profitable and low-risk deals. It provides you with effective solutions for bulk wholesale price list scanning and brand analysis alongside advanced product research extensions, tools, and features providing you with in-depth product research data.

It combines three extensions: Seller Assistant Browser Extension, and IP-Alert Chrome Extension by Seller Assistant, and VPN by Seller Assistant, Amazon seller tools: Price List Analyzer, Brand Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View,  Storefront Widget. Quick View, FBM&FBA Profit Calculator, Sales Estimator, Offers, Variation Viewer, Stock Checker, and offers secure and efficient solutions for teamwork.

Strategy 2. Select products selling very well

Best-sellers are the products with the low BSR (Best Sellers Rank) in their main category. The lower the BSR, the more the product sells. If a product's BSR is between 1 and 100,000, you’ll make plenty of sales even with competition.

How it works

Products with a low Best Sellers Rank (BSR) sell in high volumes, making them ideal for resellers who want consistent sales. The lower the BSR, the more units are sold – generally, a BSR between 1 and 100,000 ensures steady demand. Since these products sell a lot, competition is less of a concern because stock rotates frequently.

Seller Assistant helps determine product BSR and potential sales directly on Amazon search and product pages, supplier websites, and competitor storefronts. The BSR field shows the product’s rank, Sales field estimates potential sales based on BSR, and the Est field shows your estimated sales.

Pros

✔ High demand ensures a steady stream of sales.

✔ Frequent stock rotation means less impact from competition.

✔ Reliable revenue stream with predictable turnover.

Cons

✘ High-demand products attract more competitors.

✘ Requires frequent restocking to maintain inventory.

✘ BSR can fluctuate, affecting sales volume over time.

Strategy 3. Research price history

Before sourcing a product, always check its price history over the past year. Look at Buy Box behavior – if the price remains relatively stable without essential frequent drops, it’s a safer product to sell. Avoid products with wild price fluctuations that could lead to unexpected price wars.

How it works

Estimate the average Buy Box price and how it behaves during 90, 180, and 365 days. If Buy Box doesn’t show frequent deep ups and downs and remains more or less stable, the product didn’t provoke any price wars in the past.  

With Seller Assistant, you can track the average Buy Box price. Additionally, the built-in Keepa chart in Seller Assistant shows how the Buy Box behaves, with Buy Box price changes indicated by pink diamonds on the chart.

Pros

✔ Helps you predict potential price stability.

✔ Reduces the risk of unexpected profit loss.

✔ Ensures a more reliable pricing strategy over time.

Cons

✘ Requires time and research using tools like Keepa or built-in Keepa charts in Seller Assistant.

✘ Some seasonal products naturally have price swings.

✘ Doesn’t guarantee future stability – Amazon prices can still shift due to new competitors.

Strategy 4. Pick products with a high profit cushion

Select products with a big difference between average Buy Box price and Break-Even Point. Choosing products where the average Buy Box price is significantly higher than your BEP gives you flexibility in pricing. Even if the price drops temporarily, you can still sell profitably without getting into a price war.

How it works

Compare the product’s average Buy Box price and Break-Even Point. If it is significantly higher than your BEP, you have room to lower your price when competitors do it. With Seller Assistant, you can see the average Buy Box price over 90 days along with the BEP directly on Amazon product pages and supplier websites. This helps you identify products with a healthy price cushion before making a purchase decision.

Pros

✔ Allows you to lower prices if needed without taking a loss.

✔ Gives more room for competitive pricing while staying profitable.

✔ Protects against minor price fluctuations in the market.

Cons

✘ Requires detailed cost analysis before purchasing inventory.

✘ Some products may have hidden costs (e.g., higher Amazon fees).

✘ If competition increases, the price difference may shrink.

Strategy 5. Select fast-selling products

If a product moves quickly, you’ll make consistent sales even with competition because sellers sell out fast. A product with a sales velocity within 0.5% is considered fast-moving, meaning you can rely on volume rather than high markups. If the velocity is less than 1%, it’s a slow-mover, which can lead to inventory holding costs and lower profits.

How it works

Fast-selling products allow you to make consistent sales, even with thin margins, because they don’t sit in inventory for long. If a product has a sales velocity within 0.5%, it’s considered a fast mover, meaning you can sell it quickly without worrying about competition. If a product’s sales velocity is below 1%, it’s a slow mover, increasing the risk of long-term storage fees and lower profits.

Seller Assistant displays sales velocity in the Top field on Amazon product pages and on supplier websites, making it easy to identify high-demand products before sourcing them.

Pros

✔ Faster inventory turnover increases cash flow.

✔ Less risk of long-term storage fees.

✔ Higher chance of securing the Buy Box frequently.

Cons

✘ Requires frequent restocking and inventory management.

✘ Fast-selling items attract more competition.

✘ A sudden drop in sales velocity can lead to unsold inventory.

Strategy 6. Choose listings with moderate competition over time

Avoid listings that have a history of high competition. Instead, look for products where competition remains stable over time – this could include restricted categories, niche items, or gated brands. If fewer sellers can list the product, there’s less chance of a price war.

How it works

Estimate competition level by FBA and FBM seller count. With Seller Assistant, you can track the FBA and FBM seller count directly on Amazon search and product pages, your supplier websites, and your Amazon competitor’s storefront. Additionally, the built-in Keepa chart in Seller Assistant shows how FBA and FBM offer counts change over time. The offer count is displayed on the blue line in the lower Keepa chart.

Pros

✔ Less competition reduces the likelihood of aggressive pricing battles.

✔ Helps maintain profit margins for longer periods.

✔ Often leads to more Buy Box wins with stable pricing.

Cons

✘ Some restricted products require approval or ungating fees.

✘ Finding these opportunities requires market research.

✘ If more sellers get approved over time, competition may increase.

FAQ

What is the main reason Amazon price wars happen?

Amazon price wars happen when multiple sellers lower their prices to compete for the Buy Box, leading to a downward spiral of price cuts. This often occurs because sellers don’t research product demand, competition levels, or price history before sourcing inventory.

How can I check if a product is likely to start a price war?

Use Seller Assistant to analyze price history, Buy Box behavior, and sales velocity before purchasing a product. If the Buy Box price fluctuates wildly or drops frequently, it’s a sign that a product is prone to price wars.

Does lowering my price always guarantee more sales?

No, price is just one factor in winning the Buy Box. Other factors like fulfillment method (FBA vs. FBM), seller rating, and stock availability also influence who gets the most sales.

What’s the best strategy for pricing my products to avoid a race to the bottom?

Focus on selecting products with stable pricing, high sales velocity, and a strong profit cushion instead of simply lowering your price. Monitoring competitors’ stock levels and waiting for them to sell out is also a smart way to maintain profits.

How do I track my competitors’ stock levels and sales trends?

With Seller Assistant’s Offers feature, you can see how much stock each competitor has in real time on Amazon product pages and supplier websites. Additionally, checking FBA/FBM seller count trends in the built-in Keepa chart helps track competition over time.

Final Thoughts

Avoiding an Amazon price war isn’t about luck – it’s about choosing the right products strategically. By using Seller Assistant to research how well the products sell, their price history, sales velocity, and competition levels, you can stay profitable without constantly lowering your prices. Implement these strategies to protect your margins and build a sustainable reselling business on Amazon.

Seller Assistant is an all-in-one product sourcing software offering all the features vital for product sourcing. It combines three extensions: Seller Assistant Extension, IP Alert, and VPN by Seller Assistant, tools: Price List Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View,  FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, and other features that help quickly find high-profit deals. Seller Assistant also offers integration with Zapier allowing to create custom product sourcing workflows.