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Amazon is intensely interested in finding the right price for everything. If you pay attention you can see small adjustments in the prices of a lot of products;

Amazon is intensely interested in finding the right price for everything. If you pay attention you can see small adjustments in the prices of a lot of products; they're most likely doing the equivalent of A/B testing to discover their most profitable point for every product. A product without competition will be less price sensitive, so they'll end up pricing it higher. An interesting question is whether Amazon could end up in legal trouble for what their pricing algorithm does. A major theme of the small publishers and authors quoted in the article is that Amazon's price is higher than the publisher would want. If Amazon pays a fixed price for every book, then there's a fundamental conflict between the parties. Amazon wants to make margin, the publisher wants to make volume. If the publisher wants Amazon to keep their best interests at heart, they'll have to change the nature of their deal with Amazon so that their interests align.

cm2012 13y ago
Keep in mind that Amazon is not the seller of most of these books, it's 3rd parties using Amazon as a platform. There are a host of SaaS products for these people to help optimize prices.
temp453463343 13y ago
I think there is a lot less black magic than you think. The overwhelming majority of the time the small price fluctuations are in response to changes in the price by 3rd party sellers (the ones selling the same item in "new" condition). just check for yourself at http://camelcamelcamel.com/ http://camelcamelcamel.com/ They virtually always undercut the 3rd party - which always begged the question: why do the 3rd parties even bother trying to sell on amazon? Actually if you think about the kind of testing you're talking about, it doesn't make a whole lot of sense from a human psychology perspective. You don't look for a camera and think: "This should cost $123.76" and anything less will be huge turn off. There are probably more drastic things at play, like if the price ends in .99 or if it's more than a hundred dollars, or maybe people don't like certain price numbers for some completely random reason. They probably have some internal database of the average (across all inventory) of the rate-of-sales vs. the listed-price and the algo just looks for a local maximum around the price that is a bit lower than the 3rd parties.

cm2012 13y ago

Keep in mind that Amazon is not the seller of most of these books, it's 3rd parties using Amazon as a platform. There are a host of SaaS products for these people to help optimize prices.

temp453463343 13y ago

I think there is a lot less black magic than you think. The overwhelming majority of the time the small price fluctuations are in response to changes in the price by 3rd party sellers (the ones selling the same item in "new" condition). just check for yourself at http://camelcamelcamel.com/ http://camelcamelcamel.com/ They virtually always undercut the 3rd party - which always begged the question: why do the 3rd parties even bother trying to sell on amazon? Actually if you think about the kind of testing you're talking about, it doesn't make a whole lot of sense from a human psychology perspective. You don't look for a camera and think: "This should cost $123.76" and anything less will be huge turn off. There are probably more drastic things at play, like if the price ends in .99 or if it's more than a hundred dollars, or maybe people don't like certain price numbers for some completely random reason. They probably have some internal database of the average (across all inventory) of the rate-of-sales vs. the listed-price and the algo just looks for a local maximum around the price that is a bit lower than the 3rd parties.