Channel conflict
Channel conflict is competition for the same buyer between businesses that sell the same products, such as a brand, its resellers and marketplace sellers.
How it works
One product reaches buyers through the brand’s own store, resellers, wholesale customers and marketplace sellers, each with its own price and ads. In Google Shopping they can all advertise the same product for the same search, so a shopper may see your product next to a partner’s, sometimes cheaper. The conflict is vertical between a maker and the shops it supplies, and horizontal between resellers of one supplier.
A store has three responses: align prices across channels (price parity), make its offer different (a bundle, service, delivery terms), or step aside where partners win and spend the budget elsewhere. For how to choose, see channel conflict in Google Shopping.
Where you see it
- Google Ads: Auction insights for Shopping or Performance Max lists the domains in your auctions, partners included.
- Merchant Center: the Pricing tab in Analytics (price competitiveness) compares your prices with other retailers’ for the same products.
- Portal: the feed screen lists products priced above the market and competitors that show above you.
Example
Example store, not client data.
The tableware shop makes its own ceramics and sells them wholesale to three shops. One of them advertises the dinner set at 540, 10% below the shop’s 600. At a 35% margin, the shop keeps 600 × 0.35 = 210 of gross profit per set. Matching the price at 540 leaves 210 − 60 = 150, or 28.6% less on every set.
Not to be confused with
- Channel cannibalization — your own channels competing for one buyer. Channel conflict involves other businesses.
- Reseller — a store selling other makers’ brands: one party to the conflict, not the conflict itself.
Right and wrong readings
- Wrong: “A partner is cheaper, so we lose every sale to it.” Right: in our study of 1.4 million products, 213,913 products from 51 accounts had price data. Of those priced more than 20% above the market, 11.7% still had conversions, against 20.4% at market price. The link between price gap and product status was almost zero (r = −0.075).
- Wrong: “The partner’s domain is in Auction insights, so it takes our orders.” Right: overlap rate counts shared impressions, not lost sales.
Sources
- Channel conflict — Wikipedia: definition, vertical and horizontal conflict. Checked 2 October 2026.
- About Pricing in Merchant Center Analytics — Google Merchant Center Help: the Pricing tab. Checked 2 October 2026 (archived copy of 11 May 2026).
- GetProfit study: 213,913 products across 51 accounts — price position against conversions.