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Amazon seller tanks own brand in price war

Posted on by SellerBites

Thought you could underprice your way to the top?

One seller did exactly that—launching below breakeven, hoping to edge out a dominant competitor. What happened next? A ruthless price drop, wiped margins, and a harsh lesson in market dynamics.

  • Seller tanks brand in Amazon price war 💥
  • Brand brews growth via Walmart & WFS ☕
  • Thought of the Day 🍴

SELLER CONFESSIONS

An Amazon seller (OP) confessed: They launched a new product at breakeven to gain traction—only for their top competitor to suddenly match their price. 😳

OP has been preparing for tariffs by sourcing outside of China. To gain traction in a competitive niche, they listed their product at breakeven. 

Sales picked up, reviews started rolling in, and momentum was building.

🤔 Then things got weird

Their main competitor—who controls 50% of the niche and sources from China—suddenly dropped their prices to match OP’s. 

Even with tariffs in play, the math doesn’t add up. According to OP:

  • They know the supplier
  • And at this price point, it shouldn’t be sustainable
  • Yet the price drop happened anyway

🧠 Theories on the table

So what’s going on behind the scenes? OP’s guesses include:

  • The competitor is liquidating to exit the category
  • It’s a case of predatory pricing to choke out newcomers
  • They’re using creative logistics to avoid tariff costs altogether

OP has since pulled back on ad spend, hoping it’s just a temporary play.

💬 The seller crowd weighs in

Other sellers chimed in—and they didn’t exactly side with OP. Here’s the general sentiment:

  • Aggressive pricing started the war. Many felt OP invited the retaliation by slashing prices too low, too soon.
  • Building with bargain hunters is risky. A breakeven strategy may win short-term sales, but it attracts price-sensitive buyers who won’t stick around.
  • Predatory pricing can backfire. Sellers warned that price wars only benefit those with deep pockets—and OP isn’t the one with leverage.
  • Undercutting destroys long-term value. Drastically lowering price hurts perceived value and could permanently damage the ASIN’s positioning.
  • Raise prices, reset expectations. Some advised OP to increase prices slightly and observe whether the competitor follows—potentially restoring profit margins for both.

⚠️ So now what?

Competing on price alone? Fastest way to burn cash—and lose control of your brand.

The smarter play? Raise your price strategically and see how your competitor reacts. Then focus on building a stronger listing, tightening up your brand presence, and giving shoppers a reason to choose you beyond just price.

Because let’s be honest—launching at a loss isn’t momentum. It’s a misalignment. ♟️

THOUGHT OF THE DAY

If your only strategy is “undercut the market,” don’t be surprised when the market cuts back. 

Sustainable growth comes from value, not just discounts.

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