Amazon is no stranger to disputes with the makers and providers of the products they sell. We’ve seen them pull books, and other products just to force companies to give them a better deal. But GoPro is going the other way, pulling their premiere products over unfavorable pricing that violates their deal with e-commerce site. And it could cost them millions.
“GoPro and Amazon have a strong and ongoing working relationship. The temporary delay in selling HERO5 on Amazon is attributable to a negotiation on our UPP .HERO5 is currently offered online and in-store with several other outlets. We expect HERO5 will be sold on Amazon soon — most likely by the end of this month or early November.” – Statement by GoPro
With only 66 days left until Christmas, GoPro is taking a tremendous gamble. Sales of GoPro products represent about 12 to 14% of their total bottom line, and sales trends over the last few years show that more people now do their shopping for the holidays online, why would they take the GoPro HERO5, HERO5 Session off Amazon right before their biggest sales opportunity?
Well, it turns out that Amazon has been selling the new HERO5 below their agreed upon “floor price,” in an effort to boost sales. The floor is the lowest price that they are allowed to sell the HERO5 for. That really shouldn’t be a big deal for Amazon, and in a bubble it wouldn’t really hurt GoPro.
The problem is other retailers will usually match published prices. So with Amazon selling their cameras for less, retailers like Best Buy are pushed to sell the same products for the same price, or less to keep the business, and as such, GoPro could lose as much as $10 million on the HERO5 and HERO5 Session this year alone.
Currently, you can get other GoPro products, including the Karma drone through Amazon and the HERO5 and HERO5 Session can still be found through Amazon’s third-party vendors. But that has problems, too. First, there is news some vendors have started jacking up the cost of the cameras to as high as $450 (list price is $399), because they know they are the only game in town right now through Amazon. That’s just following the rules of supply and demand.
But there’s also the issue of counterfeits. Many tech companies have complained that under the “fulfilled by Amazon” moniker, these third-party franchisees from overseas have begun to flood the retailer with counterfeit copies. Unless you’re getting the product directly from Amazon as a seller, buying from a third-party can be a roll of the dice.
In the end, Amazon buyers who decide to buy a GoPro during this interim could at best pay more for their GoPro HERO5 and at worse pay more for a counterfeit one. That’s a worse case scenario even GoPro isn’t buying into, however. According to Fortune, GoPro says that the boycott is temporary and Amazon should have the HERO5 and HERO5 Session back in stock with the online retailer well before the Holiday shopping season gets in full swing.
But if you’re going to telegraph your intentions to give in and put the camera back in stock at Amazon, why bother in first place? Well, that wasn’t the plan; according to The Motley Fool, sales have dropped on the HERO5 and HERO5 Session due to the decision, causing the stock to drop by about 17%. So GoPro is likely thinking they made their point, and now it’s about avoiding the worst case scenario.
Extremely BAD timing, and Amazon knows it.
Hat Tip – Peta Pixel