But when you have actual sales numbers and you already know what they're paying for fulfillment (fulfilled by Amazon) you can do way better math.
"He's selling 10k of these a day at 20 bucks, and he's giving us six bucks per sale. Can we sell the same thing at 15 bucks? Then it'll sell better and rank higher in the search results"
I'm failing to see a problem with this. You're literally selling goods in someone else's store. Is it also a problem when grocery stores undercut and prominently feature their own brands?
"He's selling 10k of these a day at 20 bucks, and he's giving us six bucks per sale. Can we sell the same thing at 15 bucks? Then it'll sell better and rank higher in the search results"