Key takeaways: Before you cut price, find out where you are actually losing: on the results page, on your product page, or on your own branded terms. Match price only where a test shows it is profitable, differentiate on the page where you cannot match, and defend your branded traffic first because that is the cheapest ground to hold.
First, measure the damage
A competitor at a lower price is only a problem if it is costing you sales. Open Business Reports and check sessions and conversion rate for the affected ASIN since their price changed. Then open Search Query Performance and look at click share and purchase share on your top queries. Three patterns are common.
If your click share fell on the results page, shoppers are choosing their listing over yours before they see your page. Price, main image, rating and badge are all visible there, and price is only one of them. If click share held but conversion fell, shoppers see your page and then leave, often after checking the alternative in the comparison carousel. If neither moved much, the competitor is taking share from someone else and you can leave the price alone.
Profile the competitor before you respond
Not every low price lasts. Check their review count and rating, their stock position through the "only X left" signal or a cart quantity test, whether the low price is a coupon or a permanent list price, and whether they hold the Buy Box on their own listing. A new entrant with a launch coupon and 40 reviews is buying velocity for a few weeks and will raise the price once the coupon ends. An established brand with a permanent price cut and deep stock is a structural change. The response is different for each. Our process for a new entrant is D25 · A new competitor is entering, and it starts with this profile.
The decision
Read this flowchart as text
- Competitor priced below you and taking share
- Can you match and stay above target margin?
- Test the lower price for 2 weeks, measure profit per visitor
- Is the difference visible on the results page?
- Main image, title claim, rating, coupon badge
- Product page: comparison table, A+ Content, bundle or multipack
- Profit per visitor up or flat?
- Hold the new price
- Defend branded terms, conquest only where your page wins
- Share recovered without margin going below target
Match, but only on evidence
If your unit economics leave room, test the lower price rather than adopting it. Run it for two weeks and measure profit per visitor: sessions times conversion rate times margin per unit. A price cut that lifts conversion enough to raise profit per visitor is worth keeping. One that raises units but lowers profit per visitor is a loss dressed as growth. The per-ASIN margin table is the input here; without it you are guessing.
Differentiate where you cannot match
If matching would take you under your target margin, do not. Shoppers do not buy the cheapest option in most categories; they buy the option that looks like the safest choice at a price they accept. On the results page that means a main image that shows more, a title that leads with the benefit the competitor lacks, and a rating that holds up. On the product page it means a comparison table in A+ Content that names the differences, and a multipack or bundle that changes the price comparison altogether. A $22 single against their $18 single loses on price; a $40 two-pack against their $18 single is a different decision.
Defend your own name
The cheapest ground to hold is your branded search. A competitor undercutting you will often target your brand name with Sponsored Products and Sponsored Brands, so a shopper searching for you sees them first at a lower price. Branded campaigns on your own terms are inexpensive because conversion is high, and they keep that traffic yours. Set them up before you spend anything on conquesting.
Conquest only where your page wins
Targeting the competitor's ASIN with your ads puts your product in front of their shoppers. It works when your page is clearly the better offer on that comparison: better rating, better images, a feature they lack. It wastes money when their price is the only thing the shopper sees. Run a product-targeting campaign against them with a small budget, read conversion after two weeks, and keep it only if the ACoS is inside your target.
What not to do
Do not match in a hurry and then find you cannot raise the price back, because Amazon's pricing signals and shoppers' memory both anchor on the low point. Do not add the competitor's brand name to your keywords or copy; it is against policy and it does not help indexing anyway. Do not run a permanent coupon to hide a price cut; coupons have a fee per redemption and stack badly with deals.
Frequently asked questions
Should I lower my price when a competitor undercuts me?
Only if the lower price keeps you above your target margin and a two-week test shows profit per visitor holds or improves. If it does not, differentiate on the page and defend your branded traffic instead.
How do I know if a competitor's low price is temporary?
Check whether it is a coupon or a list price, their review count and rating, and their stock signals. A launch coupon on a listing with few reviews usually ends within a few weeks. A permanent price cut from an established brand is structural.
Can I target a competitor's brand name in my ads?
You can target their ASINs and their category through product targeting, and you can bid on their brand name as a keyword in Sponsored Products. You cannot use their brand name in your listing copy, backend search terms or ad creative.