What is Black Hole Pricing Range?

An Amazon pricing “black hole” is a price range where increasing your product’s selling price actually results in lower profit.

It sounds counterintuitive. Normally, raising your price should increase your margin. But on Amazon, referral fee percentage tiers can disrupt that logic.

In certain categories, Amazon charges different referral fee percentages depending on the item’s price. When a product crosses a specific pricing threshold, the referral fee can jump significantly — creating a temporary dip in profits. That dip is what we call the pricing black hole.

You can see all referral fees here.

Example;

Beauty & Personal Care, where referral fee percentages may shift at specific price breakpoints.

Imagine a skincare product with the following outcomes:

In this scenario, once the product exceeds $10.00, the referral percentage increases. As a result, pricing at $10.49 actually produces less profit than pricing at $9.99.

Only after the price rises enough to offset the higher percentage fee does profitability improve again.

Another Example by Category

Grocery

A top-selling grocery product we carry would net the following under different prices:

$14.99 —> $8.83 net after Amazon fees

$15.49 —> $8.21 net after Amazon fees

$15.99 —> $8.63 net after Amazon fees

$16.49 —> $9.06 net after Amazon fees

The practical conclusion from this referral fee structure is straightforward: pricing grocery products between $15.00 and roughly $16.25 often makes little financial sense. Within that window, sellers can unintentionally earn less than they would at a lower price point.

Despite this, many third-party sellers continue to list products squarely in this profit gap — typically because they are unaware of how shifts in referral percentages affect their net returns.

And Grocery is not the only category where this occurs.

Similar “profit trap” ranges appear in categories such as Beauty & Personal Care and Computers & Electronics, where referral fee percentages increase at specific price thresholds. Sellers who fail to account for these breakpoints may unknowingly reduce their margins simply by choosing what appears to be a reasonable competitive price.

This is why a deep understanding of Amazon’s fee structure is essential. Effective Amazon pricing requires more than matching competitors or mirroring in-store retail pricing. It requires analyzing how fee tiers interact with your selling price.

Working with an experienced Amazon seller — or developing strong internal expertise around fee mechanics — can provide a meaningful advantage. With the right insight, you can identify optimal pricing thresholds, avoid margin erosion, and set prices that maximize net profit rather than just topline revenue.

What Does SmartRepricer Do?

SmartRepricer can check black hole price ranges for all products in your inventory, by category, and automatically adjust their prices. Due to the Low Price FBA Fee rule, these products fall within the black hole range.

There is a black hole in the $9.99 to $10.90 range for FBA products.

At both $9.99 and $10.90, they generate the same profit, but prices within this range result in lower profit.

Let’s say the user’s current price is $11.30, and they want to be the lowest, while the competitor’s price is $10.50. In this case, the Repricer algorithm sets the user's price to $10.40.

Before finalizing the repricing operation, we perform one last check to determine whether the product falls within a Black Hole range. If it does, the Repricer attempts to lower the product’s price to $9.99.

SmartRepricer can check whether the price falls within the Black Hole logic or price ranges, and adjust prices accordingly.