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A similar thing happened to me as a seller. I saw that one of my old textbooks was selling for a nice price, so I listed it along with two other used copies. I
by siegler 15y ago
A similar thing happened to me as a seller. I saw that one of my old textbooks was selling for a nice price, so I listed it along with two other used copies. I priced it $1 cheaper than the lowest price offered, but within an hour both sellers had changed their prices to $.01 and $.02 cheaper than mine. I reduced it two times more by $1, and each time they beat my price by a cent or two. So what I did was reduce my price by a few dollars every hour for one day until everybody was priced under $5. Then I bought their books and changed my price back.
- weaksauce 15y agoI love that. It's a great lesson to programmers that we should think about the extreme cases and have set lower and upper bounds on our algorithms. Sanity checks should be in your code for most applications and inputs.
- ambiguity 15y agoAmazon should put an upper bound on the maximum price a product can be. Can credit card companies even process a transaction in the tens of millions of dollars?
- caf 15y agoI remember hearing about someone buying a multi-million dollar artwork with their platinum amex once, so it would seem so.
- joshu 15y agoPlatinum Amex I doubt. Maybe with a Centurion card.
- patrickgzill 15y agoThe so-called "Black Amex" card has been used to purchase a ~$30 million aircraft, according to American Express.
- smackfu 15y agoSo they make it $10k, and the post is about the $10k book instead.
- lotusleaf1987 15y agoWhy go to that effort? Did you really save any money, or more importantly time/effort? Paying for the shipping on the other books alone would seem to negate any higher profit margin that resulted in not having to compete with their prices.
- jacobolus 15y agoProbably because hacking systems like this just to see how they work is inherently fascinating.
- gibybo 15y agoExcept now he has five copies to sell instead of three, and he can sell them for much more than he paid for the two from the automated sellers.
- rwmj 15y agoHe's cornered the [Amazon] market in old textbooks :-)
- ChuckMcM 15y agoIf you play World of Warcraft this is a solid Auction House technique. I find it humorous to see it applied to the 'real' world (not that WoW economics aren't just as 'real'). The ability to push the price down gives informed actors some pricing control on the market, and the subtext is that it allows for folks to push around pricing to understand the elasticity for any product. Now if you can get them to buy a 'put' of your product :-)
- mdda 15y agoAnd (from what I understand) this is just the kind of thing that High Frequency Trading algorithms are doing.
- kingcub 15y agoSome but it's a pretty small minority if HFT algos.
- hartror 15y agoSources? Examples? Grammar?
- anamax 15y ago> And (from what I understand) this is just the kind of thing that High Frequency Trading algorithms are doing. In stocks, there's almost always someone willing to buy and someone else willing to sell at any given price, so how are you going to drive the price down without selling stock?
- gcb 15y agoHow is that so? ...always like there's always people willing to buy books at amazon?
- crocowhile 15y agonot quite. What OP described would not work in automated finance, where once the book approaches $5 an army of computers would try to buy it before him.
- naner 15y agoYou could turn this into a book business. List books for sale that you don't own and this other publisher does own. Reduce the price over time until it is super cheap. Buy while it is low and resell it without the competition.
- RyanKearney 15y agoRisky. What if someone buys it? I mean, you could at least have a few books ready to ship out just in case.
- naner 15y agoI was mostly joking but if you were really going to do this you'd have to develop strategies to reduce the chances of this happening and mitigate it when it does. Maybe if you have a slightly bad reputation on Amazon that will keep people from buying your book. Maybe you can purchase the book locally and send it to the buyer in a pinch. Maybe you can purchase the book from the actual seller and just use the buyer's shipping address. Etc.
- muyuu 15y agoNot really that risky. If it was a naked call like in markets, then it would be really risky, but in this case you risk very little since there is no contractual obligation to send the actual book if you can't get it. You can reimburse and call it a day. The calculations would have to consider the probability of not getting the book under the price of sale, the probability of not getting it over price of sale (investing the difference in avoiding a bad rating), and the chance that you won't receive a bad rating just for reimbursing it under whatever excuse. You can also ponder taking a bad rate eventually. In other markets you'd have to basically get the book at any cost, which would make it really risky.
- morphogenesis 15y agoAnd in fact, in used book "arbitrage", the seller always has a very, very good excuse, which is that s/he "sold the book already" to someone in s/her imaginary brick-and-mortar store.
- pstack 15y agoYou have just described a career in Markets / Trading in EVE-Online.
- SandB0x 15y agoThe opposite scenario (sort of), from Michael Lewis' Liar's Poker: One day earlier in his career Dall was in the market to buy (borrow) 50 million dollars. He checked around and found the money market was 4 per cent-4.25 per cent, which meant he could buy (borrow) at 4.25 per cent or sell (lend) at 4 per cent. When he actually tried to buy 50 million dollars at 4.25 per cent, however, the market moved to 4.25 per cent-4.5 per cent. The sellers were scared off by a large buyer. Dall bid 4.5. The market moved again, to 4.5p per cent-4.75 per cent. He raised his bid several more times with the same result, then went to Bill Simon’s office to tell him he couldn’t buy money. All the sellers were running like chickens. “Then you be the seller,” said Simon. So Dall became the seller, although he actually needed to buy. He sold 50 million dollars at 5.5 per cent. He sold another 50 million dollars at 5.5 per cent. Then, as Simon had guessed, the market collapsed. Everyone wanted to sell. There were no buyers. “Buy them back now,” said Simon when the market reached 4 per cent. So Dall not only got his 50 million dollars at 4 per cent but took a profit on the money he had sold at higher rates. That was how a Salomon bond trader thought: He forgot whatever it was that he wanted to do for a minute and put his finger on the pulse of the market. If the market felt fidgety, if people were scared or desperate, he herded them like sheep into a corner, then made them pay for their uncertainty. He sat on the market until it puked gold coins. Then he worried about what he wanted to do.
- cyberguppy 15y agoI imagine there is a lot of money to be made on Amazon using this Salomon bond trader technique of simply putting a finger on the pulse of the market. In calculus terms, it would be like taking a derivative of the Amazon marketplace and operating on different rules than most or all buyers and sellers on the marketplace. The trick is minimizing your risk and making sure to adhere to Amazon's terms. [Does the scenario in the grandparent comment go against Amazon's terms I wonder?]
- rapind 15y agoThis is possible because the algorithms running are still immature and the creators either didn't setup any sanity limits because they are inexperienced or maybe lazy. I wouldn't expect this to last very long, but you could potentially take advantage of it while it does by simply identifying seller's who lack limits and posting products within their categories at super low prices then buying them out and re-listing. Eventually all of these scripts will have guards in them for upper and lower and probably limits on the percentage change over time.
- plasma 15y agoGenius :)
- ropers 15y agoAnd that's how the American economy "works".