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How Amazon Tricks You into Thinking It Always Has the Lowest Prices

288 points by xmpir 12y ago

dominotw 12y ago
I buy from amazon for their predictable shipping and insanely awesome customer service.
- ctdonath 12y ago
  I find that mitigates the not always lowest prices. Come for the savings, stay for the service.
  - marincounty 12y ago
    I used to feel that way about Costco, until they changed their "Customer satisfaction warranty"! Change return policy on electronics--fine I get it. Change the return policy on a $2500 grey market watch--underhanded. I was promised verbally if it ever broke, because it's not sold by "an authorized seller"; just bring it back. No so anymore.
- thirdsun 12y ago
  Same here, of course amazon doesn't always have the lowest price, but I'd be insane to always buy from (and register at) the store that currently does. For me there's much more value in knowing that the item will arrive tomorrow.
  - freehunter 12y ago
    And the money you save by buying from randomstore247.com is offset by how much you stand to lose (in either money or time) when randomstore247.com has a breech and your card number had been stored in the clear. It's easier to trust Amazon than to trust 100 other stores.
    - jrockway 12y ago
      That's not my main worry. I had my credit card compromised in the Home Depot thing. The bank sent me a new card and auto-canceled my old one. Someone used the number, but they automatically reverted the charge. It cost me approximately zero seconds of time (but seems to have cost the bank quite a bit of money). Credit card fraud is the bank's problem, not the consumer's problem, at least in the US. (God help you if you use a debit card, though.) My main worry is time wasted from ordering something and having it not show up. You have to email them. You have to listen to how sorry they are. Then they send it again. Maybe it shows up. At some point you cut your losses and just order it from Amazon for $2.13 more. Admittedly I've gone through the order anti-loop with Amazon and got four bicycle tires for free (never getting the ones I actually ordered), but that was one case out of hundreds, and it didn't cost me much money or time. Amazon is predictable: that's why I buy from them.
- chaostheory 12y ago
  Agreed. Maybe if this article was written 5 years ago I can understand, but unless you're live somewhere where you don't have access to Amazon; everyone knows it's not just the prices that Amazon has that keeps customers coming back. People trust it. Amazon has the best customer service I've ever experienced. It is amazing. imo it's because unlike most stores, Amazon keeps your full shopping history so they know your worth to the company (as well as your habits and so on).
  - _delirium 12y ago
    As a counterpoint: Most people I know go to Amazon 100% for the prices. Often they will actually visit a brick-and-mortar store first to browse in person (page through a book at a bookstore, even try on shoes at a shoe store), and only then order on Amazon, once they've decided what they want. Amazon adds nothing here in convenience or service. The most convenient option would be to just buy the item you already physically have in your hands, which means you'd get it today, and not have to deal with UPS missed-delivery bullshit. But Amazon gets the sale because they win on price. Or at least used to!
    - tacotime 12y ago
      counter-counterpoint: I bet a large portion of the people you're talking about are genuinely price conscious consumers trying to make the most educated purchases they possibly can. I doubt these people would be the same type that blindly buy an hdmi cable at a 20% markup... how simple is it to compare prices these days online? If you're traveling to a book store then buying through amazon I would bet money that you're probably going to price check that Amazon branded hdmi cable.
  - sukilot 12y ago
    5 years ago amazon launched an explicit software-backed system to stop "leaving money on the table", by raising prices in non-competitive products. Sire it's what HFTs do all the time, but it was a bream from amazon's tradition of being the lowest price for everything and making money in volume (or deferring profitability)
- notatoad 12y ago
  I buy from amazon for their low prices - sure, they aren't always the lowest, but they're the lowest often enough that I can safely shop at amazon without shopping around. I don't want to price check five different stores before I buy something, the convenience of knowing that amazon almost always is selling something for reasonably close to the lowest price is valuable to me.
  - ObviousScience 12y ago
    I'm curious how often the lowest price is > 90% of Amazon's price. (And for that matter, > 80%, 65%, and 50%.) There's a certain premium I'm willing to pay to have it all handled by one reliable company, as long as they're not charging too much.
    - philsnow 12y ago
      A part of me would pay a certain premium to keep records of all the things I've purchased online in as many different places as possible, rather than providing one company with a fairly good profile of what my interests are.
Tarang 12y ago
It's not only amazon that does this with loss leader pricing, it its also my local grocery store with milk and bread. For me what gives me the impression amazon has the lowest prices are their nearly nonexistent profits. Whatever's up may not the the cheapest but it's always difficult to find something cheaper elsewhere, even if it does exist.
tmalsburg2 12y ago
> The startup wants to help Amazon competitors think about pricing in as sophisticated a way as Amazon does. The catch is that if several big retailers apply the Amazon strategy, a self-reinforcing feedback loop will drive the prices for popular products to zero and the prices for less popular products to +inf. This will make popular products even more popular, which further strengthens the effect. The question that this startup has to answer is thus how they are going to keep the market from exploding and how they can benefit several clients at the same time.
xenadu02 12y ago
This has been WalMart's strategy for decades so it shouldn't surprise anyone.
- returnofthejedi 12y ago
  What is Walmart's digital stratergy?
  - GabrielF00 12y ago
    I think WalMart is pretty focused on free ship-to-store. This doesn't appeal to me at all since I live in a big city and going to a suburban Walmart would be a big production. It makes a certain amount of sense for my parents since there's a Walmart neighborhood market five minutes from their house. It eliminates one risk of online purchases (package sitting on your doorstep) but introduces the inconvenience of parking and getting your product from the store's customer service department.
    - logfromblammo 12y ago
      Every time that I have used Ship-to-Store from WalMart, I have had to spend at minimum 30 minutes between entering and exiting the store parking lot. Most of the time, I have to hunt down a store employee myself, because unlike the customer service desk, the Ship-to-Store/Layaway desk is not continuously staffed. WalMart is great when the value of your own time is not very high, but at some point, it is glaringly obvious that they keep prices lower by making all their customers spend just a little bit more time in the store than absolutely necessary. So the inconvenience is very inconvenient. It is only made worse by the fact that I didn't shop for the items, and didn't buy them, but I'm simply the one who drives past a Wal*Mart every day. For the shopper, it really is free at-home delivery. For me, it is, "Hey, guess what? You get to flush half an hour of your life down the toilet today--what a deal!" Ship-to-Store is precisely the reason why I fear Amazon Locker and other "ship it the last mile yourself" services.
  - cowsandmilk 12y ago
    in my experience, they want you to just buy high price items online. (a) Free shipping at $50. (b) limit on quantity of item purchased (e.g. only 4 bags of flour at time) So, you cannot purchase large quantities of a single low priced staple, you have to buy 4 of a lot of items. Or buy high priced items.
WizzleKake 12y ago
Amazon jacks the price around on a lot of the household items that I buy. There one item that I last purchased for $11.94. I have seen it as high as $29 and some change. Right now it is $23.94. I've wised up to this tactic and will buy extra when the price is low enough to make it a better deal than buying at the grocery store.
- rasz_pl 12y ago
  I remember boingboing posting about WikiReader. http://boingboing.net/2013/05/07/20-gadget-contains-the-enti.html http://boingboing.net/2013/05/07/20-gadget-contains-the-enti... They posted about $10 device, and almost immediately Amazon pumped up the price to $30.
- driverdan 12y ago
  Their pricing of household items is not very good. Almost everything I'd buy is cheaper at retail stores and I don't need to buy a pallet load.
JoachimSchipper 12y ago
Pricing the most-seen items lower is not quite as nefarious as "trick" would suggest, IMHO - and part of it is probably just driven by various advantages of selling a lot of some particular product.
ecaron 12y ago
When I started working on https://trackif.com https://trackif.com, I thought the premise was thin because prices couldn't fluctuate that much. I assumed everything gradually declined in price, and that it'd primarily be driven by store-A vs store-B price dropping. Nope. Retailers are just gaming us 24/7. I've become very aware of all the different timeframes retailers offer post-purchase price-matches (published at http://blog.trackif.com/trackif-smart-shopping-guide-store-price-matching-correction-return-policies/ http://blog.trackif.com/trackif-smart-shopping-guide-store-p... since I felt like I was hoarding knowledge.) Have retailers always played games like this? Or it just a side-effect of sales moving online?
- indymike 12y ago
  I can speak to 25 years ago: the answer is yes. Here are some of the things I saw: * Marking items up 30-45 days ahead of a big sale. This allowed our price to be 25% off instead of 10%. Or sometimes, our sale price probably should have been the regular price. This happened all the time, and people fell for it hard. Usually this would happen before a 10% off everything sale. * Price adjustments from competitive shops. All of a sudden on some non-advertised sale day the laser printer would spit out a new low every day price if a strategic product was priced above the competition. * Some price adjustments occurred to game the competition. We did this a lot with appliances where we'd mark up a model we knew the manufacturer had a ton of inventory. The competition would buy a few truckloads and then we'd run $200 off when they ran their $100 off add. The only thing the internet has changed is the speed price changes occur and has enabled some other kinds of buy this get that deals.
  - ecaron 12y ago
    You need to comment more on HN. Everytime I see your username I think "Why doesn't he have more karma - he typically responds with gems."
    - droopyEyelids 12y ago
      Probably sticking to what he knows rather than turning into another Internet know it all is what keeps his comments at a high level of quality.
TheLoneWolfling 12y ago
http://camelcamelcamel.com/ http://camelcamelcamel.com/ (Amazon price tracking.) Very useful if/when you want to buy something and want to check historical prices. (You can also set email alerts when something drops to below a certain price.) Edit: linkified. (Thanks, canvia!)
- canvia 12y ago
  I second this recommendation. Linkified: http://camelcamelcamel.com/ http://camelcamelcamel.com/
- denzil_correa 12y ago
  I would concur. This is the best price tracking plugin I have seen.
- exhilaration 12y ago
  If anyone is curious about whether's it's worth checking CamelCamelCamel before making an Amazon purchase, look at the price history for this tea in the past year: http://camelcamelcamel.com/Stash-Tea-Green-Chai-Count/product/B000CQE42M http://camelcamelcamel.com/Stash-Tea-Green-Chai-Count/produc... The price rapidly fluctuates between $18.99 and $14.24 on a nearly monthly basis. In this case it's worth it to create an alert and wait a week or two for the price to drop again.
  - talmand 12y ago
    But wouldn't something like tea fluctuate in pricing anyway because of the type of product it is and not necessarily because of price gaming?
    - exhilaration 12y ago
      You're suggesting that the worldwide price of tea or market conditions are causing these nearly monthly fluctuations, between two set prices? I'm skeptical, the graph doesn't suggest that to my untrained eye.
kmfrk 12y ago
As has been said, this should be no surprise at all - especially if you've followed phenomenons like the Harry Potter books that got the same treatment. Amazon underbid competitors on the short tail and make it up on the long tail. Amazon also stand the benefit that nothing is technically "upsale", since it's all horizontally in the same basket, so they can't get accused of selling you extra stuff the way other vendors might.
deleted 12y ago
[deleted]
- otterley 12y ago
  The technical term is "loss leader." It's a venerable technique.
DiabloD3 12y ago
I dont get why they use HDMI cables as their first example: we keep buying HDMI cables because they get busted, not because we need more. AmazonBasics is currently the best cheap cable (replacing Monoprice's now that they aren't nearly as good as they used to be). Also, why does the article call them HD cables. Whats an HD cable? None of my ports say HD, they say HDMI. And it doesn't even get into how Prime games S&H over the long term.
- wingerlang 12y ago
  Is it possible that there are different types of cables that offers HD transfer to the TV? I've never really heard "HD" cable either, but in the article I read it as HDMI, had to go back to check if it actually said HD.
  - DiabloD3 12y ago
    You can do 1080i over YCbCr analog, but no one has done this for like a decade, and it only made sense for pre-HDMI HD sets (which made as little sense to manufacture as pre-Rec2020 4k TVs being made now).
- listic 12y ago
  How does Prime game S&H?
  - brixon 12y ago
    If you are a Prime user then logout of Amazon and go look for that same item again. If the item is sold/shipped by Amazon then you might not find a big difference, but if the item is sold/shipped by a different company then you will see that the price is lower, but you have to pay shipping. Resellers in the Amazon site have to up their prices to account for the free shipping, but I find that the upped price is still a bit cheaper than paying for the shipping separate.
GabrielF00 12y ago
They mention HDMI cables specifically. I just went into a Best Buy and asked for their cheapest HDMI cable. The salesman showed me one for $15. The Amazon basics cable is $5.49. If you've got Prime and you factor in the shipping costs of using another website, it's hard to beat Amazon's price.
- sparkman55 12y ago
  For cables, Monoprice is also a good alternative (and, generally, price-competitive with Amazon). Another commenter mentioned that Monoprice's HDMI quality has declined; I haven't noticed any problem with their Ethernet and USB cables. For HDMI, Monoprice goes all the way down to $2: http://www.monoprice.com/Search/Index?keyword=hdmi http://www.monoprice.com/Search/Index?keyword=hdmi Best Buy preys on the 'I need this cable in 30 minutes for the big presentation' customer, and prices accordingly. Try buying coaxial cable - it's obscene!
  - eropple 12y ago
    The main reason I buy cables from Amazon instead of Monoprice is Prime. Monoprice's shipping is always slow for me. (Last gig I was at, we bought a truckload of their monitors, though, on my recommendation. Love those guys, just wish they could ship faster without ruining my wallet.)
    - driverdan 12y ago
      You can buy a lot of Monoprice cables through Amazon at the same price but with Prime shipping.
- branchless 12y ago
  HDMI cables are IMHO the worst example. These are add-on to core purchases and when they break or are required you just want to get one. Physical stores like BestBuy know this and price accordingly. This just makes me dislike these stores even more!
  - 12y ago
peteretep 12y ago
I am willing to pay a significant premium to Amazin for the no-bullshit customer support. If my transaction doesn't delight me, I know they will make good on it.
- ZenoArrow 12y ago
  I have a similar mindset. I don't know anyone who thinks Amazon has the best prices, I'm happy to pay a little extra for the convenience and quality of service. Case in point, I bought a new router from Amazon last week. When I got it I realised I'd made a mistake (I'd chosen one without an ADSL modem). I fill in a simple online form to get the return label, return it via Collect+ (it's a service in the UK for collecting parcels from local stores) and Amazon process my refund whilst the item was in transit (before the item got back to their warehouses). This is typical of their customer service, it's really second to none (in my experience).
  - DanBC 12y ago
    Have you tried similar returns with other products? Your description just sounds (to me) like Amazon are compliant with English distance selling law, and not that they were particularly good.
    - ZenoArrow 12y ago
      Yes, I've tried other online retailers in the past (including returns IIRC), and I'm sure I will in the future too. It's not about just following the letter of the law, it's about the small details that add up to a better experience, that's what I was trying to get across.
  - dazc 12y ago
    Similar experience, with a full refund before the item was returned. I don't know about the US but you don't get anywhere near this kind of service with any other UK retailer.
  - thirdsun 12y ago
    Apart from the refund before the item was returned, this is pretty much standard procedure in europe, as in a consumer right by law - you always have 14 day return period at any online store. Sure, amazon extends their grace period (30 days, right?) - other than that it's really nothing special.
kenjackson 12y ago
Lego pricing on Amazon is generally bad. Often much worse than what Lego sells the sets for. That is one area I'd love to see Amazon change.
- mynameisvlad 12y ago
  Amazon doesn't sell every product themselves. Most are Amazon Marketplace sales, which are entirely 3rd party (some are Fulfilled by Amazon, which gives you the Prime shipping but is still 3rd party). In these cases, Amazon can't control the prices at all; it's all up to the 3rd parties to set the prices.
- smackfu 12y ago
  Disagree. I've never seen Amazon itself sell LEGO above retail price. They just tend to run out of stock, so they don't actually sell many sets. Third party sellers often do up charge, but that's basicaly like buying on eBay. OTOH Toys R Us will definitely sell above retail. Set 60057 is $17 at Amazon, $20 from Lego, and $25 at TRU.
- kirse 12y ago
  LEGO pricing in general has been inflated recently. Flippers and 3rd-party Amazon sellers know this, so they buy up all the stock to resell via Amazon FBA. It's a LEGO bubble right now with a lot of artificial demand. Some of these flippers will coordinate massive regional buyouts of a given LEGO set from retail stores by using people from Fiverr, etc. and then hoard the bulk lots or sell to collectors. Stores are even being robbed of LEGO merchandise: http://www.dailytelegraph.com.au/news/nsw/story-fni0cx12-1226951237939 http://www.dailytelegraph.com.au/news/nsw/story-fni0cx12-122...
DougWebb 12y ago
I'm sure Amazon is constantly adjusting their prices in order to maximize their sales and revenue; they even have some price automation tools as part of their inventory management system for people who sell their stuff through Amazon. However I'm not sure these adjustments are meant to make people perceive that Amazon has the lowest prices. Instead it seems like they're meant to ensure that Amazon actually has the lowest prices on the most popular and high volume items. On those items they are pricing for high volume, while on the lower volume items they need a higher price to get an equivalent margin. That's what this looks like to me: maximizing margins across products with different sales volumes.
gdulli 12y ago
When I decided I didn't feel great about supporting Amazon any longer due to its reported treatment of its business partners, corporate employees, and warehouse employees, I started shopping around and was surprised to find it wasn't so hard to find deals just as good or better elsewhere. Sometimes prices are just lower elsewhere, sometimes free shipping comes without a requirement to make a $35 order. (Or pay a high annual fee for free shipping that wouldn't amortize well for me.) And sometimes Amazon still is the cheapest, but not by so much that it feels imperative to shop there if I have reasons not to.
zeeshanm 12y ago
I read on NPR a while ago some guys found an arbitrage opportunity in book prices. So - he would track the most sought after books, buy them when price were low, usually around July/August, and then sell them back on Amazon when prices were high, around the time of September and January. Makes sense.
- bronson 12y ago
  Planet Money, probably their second best textbook story: http://www.npr.org/blogs/money/2014/11/10/363103753/textbook-arbitrage-making-money-off-used-books http://www.npr.org/blogs/money/2014/11/10/363103753/textbook... (best imo was talking about the whole mess around writing textbooks)
WalterBright 12y ago
This is all old, old news. Back in the 1970's, a friend of mine was shopping for a nice SLR camera. He knew which camera he wanted, and diligently researched ad after ad, finally settling on one with the cheapest price. We all piled into his car to go get it. Sure enough, he bought the camera body dirt cheap. But he walked out of the store with a lense, filter, case, flash, film, and a few other accessories. When back home, he ruefully discovered that the total price he shelled out was higher! He didn't realize that the accessories were priced higher than the competition. People simply are not price sensitive to add-ons, and salesmen have known that for centuries. Gillette is famous for pretty much giving away the razor and making money on the blades. There's even a word for it: "loss leader". All Amazon has done is automate it. Pretty much all retailers do it.
- tobinfricke 12y ago
  > Gillette is famous for pretty much giving away the razor and making money on the blades. Admittedly... if you're not including the blades, the "razor" is just a plastic stick.
  - WalterBright 12y ago
    Not so before BIC - the Gillette razor was a nicely crafted metal tool.
WalterBright 12y ago
Another common sales technique is to have 3 models in a line - the stripper, the standard, and the deluxe. The stripper was barely functional, and its sole purpose was to have a cheap price to attract customers to the showroom. The deluxe had every silly feature the manufacturer could think of, like pinstriping on a dishwasher. It had a very high price. It's sole purpose was to 'frame' the price of the standard model and make it look like a bargain. The standard model was the one the manufacturer expected to sell. Of course, the rare price-insensitive customer would buy the deluxe, and the salesman was happy to sell that and collect the large commission.
milesf 12y ago
I use http://camelcamelcamel.com http://camelcamelcamel.com to track stuff I'm looking to buy. Here's a screenshot from my price tracking last year on a WD 6TB drive: http://i.imgur.com/evOBCVN.png http://i.imgur.com/evOBCVN.png
steven2012 12y ago
Surprisingly most home improvement things are cheaper at Home Depot rather than Amazon. I learned this one the hard way. Also Amazon routinely displays "original" prices that are much higher than other places and with the "discount" falls in the same price range.
known 12y ago
You'll buy anything you think Amazon is losing money on.
known 12y ago
I think Amazon is emulating http://en.wikipedia.org/wiki/S%26P_500 http://en.wikipedia.org/wiki/S%26P_500
eurusd 12y ago
I also like the simple but effective Keepa http://keepa.com http://keepa.com to compare amazon prices in different countries at the same time. In Europe for example, Hometheater amps are 50% cheaper in Germany than france, while france is cheaper on something else and UK is cheaper on tools and sometimes projectors (depending of FX rates)
AnonJ 12y ago
"Rising the price of the cables by 33%" feels really sinister and underhanded. Is this guy totally sure that it was done intentionally.

288 points by xmpir 12y ago

dominotw 12y ago

I buy from amazon for their predictable shipping and insanely awesome customer service.

ctdonath 12y ago
I find that mitigates the not always lowest prices. Come for the savings, stay for the service.
- marincounty 12y ago
  I used to feel that way about Costco, until they changed their "Customer satisfaction warranty"! Change return policy on electronics--fine I get it. Change the return policy on a $2500 grey market watch--underhanded. I was promised verbally if it ever broke, because it's not sold by "an authorized seller"; just bring it back. No so anymore.
thirdsun 12y ago
Same here, of course amazon doesn't always have the lowest price, but I'd be insane to always buy from (and register at) the store that currently does. For me there's much more value in knowing that the item will arrive tomorrow.
- freehunter 12y ago
  And the money you save by buying from randomstore247.com is offset by how much you stand to lose (in either money or time) when randomstore247.com has a breech and your card number had been stored in the clear. It's easier to trust Amazon than to trust 100 other stores.
  - jrockway 12y ago
    That's not my main worry. I had my credit card compromised in the Home Depot thing. The bank sent me a new card and auto-canceled my old one. Someone used the number, but they automatically reverted the charge. It cost me approximately zero seconds of time (but seems to have cost the bank quite a bit of money). Credit card fraud is the bank's problem, not the consumer's problem, at least in the US. (God help you if you use a debit card, though.) My main worry is time wasted from ordering something and having it not show up. You have to email them. You have to listen to how sorry they are. Then they send it again. Maybe it shows up. At some point you cut your losses and just order it from Amazon for $2.13 more. Admittedly I've gone through the order anti-loop with Amazon and got four bicycle tires for free (never getting the ones I actually ordered), but that was one case out of hundreds, and it didn't cost me much money or time. Amazon is predictable: that's why I buy from them.
chaostheory 12y ago
Agreed. Maybe if this article was written 5 years ago I can understand, but unless you're live somewhere where you don't have access to Amazon; everyone knows it's not just the prices that Amazon has that keeps customers coming back. People trust it. Amazon has the best customer service I've ever experienced. It is amazing. imo it's because unlike most stores, Amazon keeps your full shopping history so they know your worth to the company (as well as your habits and so on).
- _delirium 12y ago
  As a counterpoint: Most people I know go to Amazon 100% for the prices. Often they will actually visit a brick-and-mortar store first to browse in person (page through a book at a bookstore, even try on shoes at a shoe store), and only then order on Amazon, once they've decided what they want. Amazon adds nothing here in convenience or service. The most convenient option would be to just buy the item you already physically have in your hands, which means you'd get it today, and not have to deal with UPS missed-delivery bullshit. But Amazon gets the sale because they win on price. Or at least used to!
  - tacotime 12y ago
    counter-counterpoint: I bet a large portion of the people you're talking about are genuinely price conscious consumers trying to make the most educated purchases they possibly can. I doubt these people would be the same type that blindly buy an hdmi cable at a 20% markup... how simple is it to compare prices these days online? If you're traveling to a book store then buying through amazon I would bet money that you're probably going to price check that Amazon branded hdmi cable.
- sukilot 12y ago
  5 years ago amazon launched an explicit software-backed system to stop "leaving money on the table", by raising prices in non-competitive products. Sire it's what HFTs do all the time, but it was a bream from amazon's tradition of being the lowest price for everything and making money in volume (or deferring profitability)
notatoad 12y ago
I buy from amazon for their low prices - sure, they aren't always the lowest, but they're the lowest often enough that I can safely shop at amazon without shopping around. I don't want to price check five different stores before I buy something, the convenience of knowing that amazon almost always is selling something for reasonably close to the lowest price is valuable to me.
- ObviousScience 12y ago
  I'm curious how often the lowest price is > 90% of Amazon's price. (And for that matter, > 80%, 65%, and 50%.) There's a certain premium I'm willing to pay to have it all handled by one reliable company, as long as they're not charging too much.
  - philsnow 12y ago
    A part of me would pay a certain premium to keep records of all the things I've purchased online in as many different places as possible, rather than providing one company with a fairly good profile of what my interests are.

Tarang 12y ago

It's not only amazon that does this with loss leader pricing, it its also my local grocery store with milk and bread. For me what gives me the impression amazon has the lowest prices are their nearly nonexistent profits. Whatever's up may not the the cheapest but it's always difficult to find something cheaper elsewhere, even if it does exist.

tmalsburg2 12y ago

> The startup wants to help Amazon competitors think about pricing in as sophisticated a way as Amazon does. The catch is that if several big retailers apply the Amazon strategy, a self-reinforcing feedback loop will drive the prices for popular products to zero and the prices for less popular products to +inf. This will make popular products even more popular, which further strengthens the effect. The question that this startup has to answer is thus how they are going to keep the market from exploding and how they can benefit several clients at the same time.

xenadu02 12y ago

This has been WalMart's strategy for decades so it shouldn't surprise anyone.

returnofthejedi 12y ago
What is Walmart's digital stratergy?
- GabrielF00 12y ago
  I think WalMart is pretty focused on free ship-to-store. This doesn't appeal to me at all since I live in a big city and going to a suburban Walmart would be a big production. It makes a certain amount of sense for my parents since there's a Walmart neighborhood market five minutes from their house. It eliminates one risk of online purchases (package sitting on your doorstep) but introduces the inconvenience of parking and getting your product from the store's customer service department.
  - logfromblammo 12y ago
    Every time that I have used Ship-to-Store from WalMart, I have had to spend at minimum 30 minutes between entering and exiting the store parking lot. Most of the time, I have to hunt down a store employee myself, because unlike the customer service desk, the Ship-to-Store/Layaway desk is not continuously staffed. WalMart is great when the value of your own time is not very high, but at some point, it is glaringly obvious that they keep prices lower by making all their customers spend just a little bit more time in the store than absolutely necessary. So the inconvenience is very inconvenient. It is only made worse by the fact that I didn't shop for the items, and didn't buy them, but I'm simply the one who drives past a Wal*Mart every day. For the shopper, it really is free at-home delivery. For me, it is, "Hey, guess what? You get to flush half an hour of your life down the toilet today--what a deal!" Ship-to-Store is precisely the reason why I fear Amazon Locker and other "ship it the last mile yourself" services.
- cowsandmilk 12y ago
  in my experience, they want you to just buy high price items online. (a) Free shipping at $50. (b) limit on quantity of item purchased (e.g. only 4 bags of flour at time) So, you cannot purchase large quantities of a single low priced staple, you have to buy 4 of a lot of items. Or buy high priced items.

WizzleKake 12y ago

Amazon jacks the price around on a lot of the household items that I buy. There one item that I last purchased for $11.94. I have seen it as high as $29 and some change. Right now it is $23.94. I've wised up to this tactic and will buy extra when the price is low enough to make it a better deal than buying at the grocery store.

rasz_pl 12y ago
I remember boingboing posting about WikiReader. http://boingboing.net/2013/05/07/20-gadget-contains-the-enti.html http://boingboing.net/2013/05/07/20-gadget-contains-the-enti... They posted about $10 device, and almost immediately Amazon pumped up the price to $30.
driverdan 12y ago
Their pricing of household items is not very good. Almost everything I'd buy is cheaper at retail stores and I don't need to buy a pallet load.

JoachimSchipper 12y ago

Pricing the most-seen items lower is not quite as nefarious as "trick" would suggest, IMHO - and part of it is probably just driven by various advantages of selling a lot of some particular product.

ecaron 12y ago

When I started working on https://trackif.com https://trackif.com, I thought the premise was thin because prices couldn't fluctuate that much. I assumed everything gradually declined in price, and that it'd primarily be driven by store-A vs store-B price dropping. Nope. Retailers are just gaming us 24/7. I've become very aware of all the different timeframes retailers offer post-purchase price-matches (published at http://blog.trackif.com/trackif-smart-shopping-guide-store-price-matching-correction-return-policies/ http://blog.trackif.com/trackif-smart-shopping-guide-store-p... since I felt like I was hoarding knowledge.) Have retailers always played games like this? Or it just a side-effect of sales moving online?

indymike 12y ago
I can speak to 25 years ago: the answer is yes. Here are some of the things I saw: * Marking items up 30-45 days ahead of a big sale. This allowed our price to be 25% off instead of 10%. Or sometimes, our sale price probably should have been the regular price. This happened all the time, and people fell for it hard. Usually this would happen before a 10% off everything sale. * Price adjustments from competitive shops. All of a sudden on some non-advertised sale day the laser printer would spit out a new low every day price if a strategic product was priced above the competition. * Some price adjustments occurred to game the competition. We did this a lot with appliances where we'd mark up a model we knew the manufacturer had a ton of inventory. The competition would buy a few truckloads and then we'd run $200 off when they ran their $100 off add. The only thing the internet has changed is the speed price changes occur and has enabled some other kinds of buy this get that deals.
- ecaron 12y ago
  You need to comment more on HN. Everytime I see your username I think "Why doesn't he have more karma - he typically responds with gems."
  - droopyEyelids 12y ago
    Probably sticking to what he knows rather than turning into another Internet know it all is what keeps his comments at a high level of quality.

TheLoneWolfling 12y ago

http://camelcamelcamel.com/ http://camelcamelcamel.com/ (Amazon price tracking.) Very useful if/when you want to buy something and want to check historical prices. (You can also set email alerts when something drops to below a certain price.) Edit: linkified. (Thanks, canvia!)

canvia 12y ago
I second this recommendation. Linkified: http://camelcamelcamel.com/ http://camelcamelcamel.com/
denzil_correa 12y ago
I would concur. This is the best price tracking plugin I have seen.
exhilaration 12y ago
If anyone is curious about whether's it's worth checking CamelCamelCamel before making an Amazon purchase, look at the price history for this tea in the past year: http://camelcamelcamel.com/Stash-Tea-Green-Chai-Count/product/B000CQE42M http://camelcamelcamel.com/Stash-Tea-Green-Chai-Count/produc... The price rapidly fluctuates between $18.99 and $14.24 on a nearly monthly basis. In this case it's worth it to create an alert and wait a week or two for the price to drop again.
- talmand 12y ago
  But wouldn't something like tea fluctuate in pricing anyway because of the type of product it is and not necessarily because of price gaming?
  - exhilaration 12y ago
    You're suggesting that the worldwide price of tea or market conditions are causing these nearly monthly fluctuations, between two set prices? I'm skeptical, the graph doesn't suggest that to my untrained eye.

kmfrk 12y ago

As has been said, this should be no surprise at all - especially if you've followed phenomenons like the Harry Potter books that got the same treatment. Amazon underbid competitors on the short tail and make it up on the long tail. Amazon also stand the benefit that nothing is technically "upsale", since it's all horizontally in the same basket, so they can't get accused of selling you extra stuff the way other vendors might.

deleted 12y ago

[deleted]

otterley 12y ago
The technical term is "loss leader." It's a venerable technique.

DiabloD3 12y ago

I dont get why they use HDMI cables as their first example: we keep buying HDMI cables because they get busted, not because we need more. AmazonBasics is currently the best cheap cable (replacing Monoprice's now that they aren't nearly as good as they used to be). Also, why does the article call them HD cables. Whats an HD cable? None of my ports say HD, they say HDMI. And it doesn't even get into how Prime games S&H over the long term.

wingerlang 12y ago
Is it possible that there are different types of cables that offers HD transfer to the TV? I've never really heard "HD" cable either, but in the article I read it as HDMI, had to go back to check if it actually said HD.
- DiabloD3 12y ago
  You can do 1080i over YCbCr analog, but no one has done this for like a decade, and it only made sense for pre-HDMI HD sets (which made as little sense to manufacture as pre-Rec2020 4k TVs being made now).
listic 12y ago
How does Prime game S&H?
- brixon 12y ago
  If you are a Prime user then logout of Amazon and go look for that same item again. If the item is sold/shipped by Amazon then you might not find a big difference, but if the item is sold/shipped by a different company then you will see that the price is lower, but you have to pay shipping. Resellers in the Amazon site have to up their prices to account for the free shipping, but I find that the upped price is still a bit cheaper than paying for the shipping separate.

GabrielF00 12y ago

They mention HDMI cables specifically. I just went into a Best Buy and asked for their cheapest HDMI cable. The salesman showed me one for $15. The Amazon basics cable is $5.49. If you've got Prime and you factor in the shipping costs of using another website, it's hard to beat Amazon's price.

sparkman55 12y ago
For cables, Monoprice is also a good alternative (and, generally, price-competitive with Amazon). Another commenter mentioned that Monoprice's HDMI quality has declined; I haven't noticed any problem with their Ethernet and USB cables. For HDMI, Monoprice goes all the way down to $2: http://www.monoprice.com/Search/Index?keyword=hdmi http://www.monoprice.com/Search/Index?keyword=hdmi Best Buy preys on the 'I need this cable in 30 minutes for the big presentation' customer, and prices accordingly. Try buying coaxial cable - it's obscene!
- eropple 12y ago
  The main reason I buy cables from Amazon instead of Monoprice is Prime. Monoprice's shipping is always slow for me. (Last gig I was at, we bought a truckload of their monitors, though, on my recommendation. Love those guys, just wish they could ship faster without ruining my wallet.)
  - driverdan 12y ago
    You can buy a lot of Monoprice cables through Amazon at the same price but with Prime shipping.
branchless 12y ago
HDMI cables are IMHO the worst example. These are add-on to core purchases and when they break or are required you just want to get one. Physical stores like BestBuy know this and price accordingly. This just makes me dislike these stores even more!
- 12y ago

peteretep 12y ago

I am willing to pay a significant premium to Amazin for the no-bullshit customer support. If my transaction doesn't delight me, I know they will make good on it.

ZenoArrow 12y ago
I have a similar mindset. I don't know anyone who thinks Amazon has the best prices, I'm happy to pay a little extra for the convenience and quality of service. Case in point, I bought a new router from Amazon last week. When I got it I realised I'd made a mistake (I'd chosen one without an ADSL modem). I fill in a simple online form to get the return label, return it via Collect+ (it's a service in the UK for collecting parcels from local stores) and Amazon process my refund whilst the item was in transit (before the item got back to their warehouses). This is typical of their customer service, it's really second to none (in my experience).
- DanBC 12y ago
  Have you tried similar returns with other products? Your description just sounds (to me) like Amazon are compliant with English distance selling law, and not that they were particularly good.
  - ZenoArrow 12y ago
    Yes, I've tried other online retailers in the past (including returns IIRC), and I'm sure I will in the future too. It's not about just following the letter of the law, it's about the small details that add up to a better experience, that's what I was trying to get across.
- dazc 12y ago
  Similar experience, with a full refund before the item was returned. I don't know about the US but you don't get anywhere near this kind of service with any other UK retailer.
- thirdsun 12y ago
  Apart from the refund before the item was returned, this is pretty much standard procedure in europe, as in a consumer right by law - you always have 14 day return period at any online store. Sure, amazon extends their grace period (30 days, right?) - other than that it's really nothing special.

kenjackson 12y ago

Lego pricing on Amazon is generally bad. Often much worse than what Lego sells the sets for. That is one area I'd love to see Amazon change.

mynameisvlad 12y ago
Amazon doesn't sell every product themselves. Most are Amazon Marketplace sales, which are entirely 3rd party (some are Fulfilled by Amazon, which gives you the Prime shipping but is still 3rd party). In these cases, Amazon can't control the prices at all; it's all up to the 3rd parties to set the prices.
smackfu 12y ago
Disagree. I've never seen Amazon itself sell LEGO above retail price. They just tend to run out of stock, so they don't actually sell many sets. Third party sellers often do up charge, but that's basicaly like buying on eBay. OTOH Toys R Us will definitely sell above retail. Set 60057 is $17 at Amazon, $20 from Lego, and $25 at TRU.
kirse 12y ago
LEGO pricing in general has been inflated recently. Flippers and 3rd-party Amazon sellers know this, so they buy up all the stock to resell via Amazon FBA. It's a LEGO bubble right now with a lot of artificial demand. Some of these flippers will coordinate massive regional buyouts of a given LEGO set from retail stores by using people from Fiverr, etc. and then hoard the bulk lots or sell to collectors. Stores are even being robbed of LEGO merchandise: http://www.dailytelegraph.com.au/news/nsw/story-fni0cx12-1226951237939 http://www.dailytelegraph.com.au/news/nsw/story-fni0cx12-122...

DougWebb 12y ago

I'm sure Amazon is constantly adjusting their prices in order to maximize their sales and revenue; they even have some price automation tools as part of their inventory management system for people who sell their stuff through Amazon. However I'm not sure these adjustments are meant to make people perceive that Amazon has the lowest prices. Instead it seems like they're meant to ensure that Amazon actually has the lowest prices on the most popular and high volume items. On those items they are pricing for high volume, while on the lower volume items they need a higher price to get an equivalent margin. That's what this looks like to me: maximizing margins across products with different sales volumes.

gdulli 12y ago

When I decided I didn't feel great about supporting Amazon any longer due to its reported treatment of its business partners, corporate employees, and warehouse employees, I started shopping around and was surprised to find it wasn't so hard to find deals just as good or better elsewhere. Sometimes prices are just lower elsewhere, sometimes free shipping comes without a requirement to make a $35 order. (Or pay a high annual fee for free shipping that wouldn't amortize well for me.) And sometimes Amazon still is the cheapest, but not by so much that it feels imperative to shop there if I have reasons not to.

zeeshanm 12y ago

I read on NPR a while ago some guys found an arbitrage opportunity in book prices. So - he would track the most sought after books, buy them when price were low, usually around July/August, and then sell them back on Amazon when prices were high, around the time of September and January. Makes sense.

bronson 12y ago
Planet Money, probably their second best textbook story: http://www.npr.org/blogs/money/2014/11/10/363103753/textbook-arbitrage-making-money-off-used-books http://www.npr.org/blogs/money/2014/11/10/363103753/textbook... (best imo was talking about the whole mess around writing textbooks)

WalterBright 12y ago

This is all old, old news. Back in the 1970's, a friend of mine was shopping for a nice SLR camera. He knew which camera he wanted, and diligently researched ad after ad, finally settling on one with the cheapest price. We all piled into his car to go get it. Sure enough, he bought the camera body dirt cheap. But he walked out of the store with a lense, filter, case, flash, film, and a few other accessories. When back home, he ruefully discovered that the total price he shelled out was higher! He didn't realize that the accessories were priced higher than the competition. People simply are not price sensitive to add-ons, and salesmen have known that for centuries. Gillette is famous for pretty much giving away the razor and making money on the blades. There's even a word for it: "loss leader". All Amazon has done is automate it. Pretty much all retailers do it.

tobinfricke 12y ago
> Gillette is famous for pretty much giving away the razor and making money on the blades. Admittedly... if you're not including the blades, the "razor" is just a plastic stick.
- WalterBright 12y ago
  Not so before BIC - the Gillette razor was a nicely crafted metal tool.

WalterBright 12y ago

Another common sales technique is to have 3 models in a line - the stripper, the standard, and the deluxe. The stripper was barely functional, and its sole purpose was to have a cheap price to attract customers to the showroom. The deluxe had every silly feature the manufacturer could think of, like pinstriping on a dishwasher. It had a very high price. It's sole purpose was to 'frame' the price of the standard model and make it look like a bargain. The standard model was the one the manufacturer expected to sell. Of course, the rare price-insensitive customer would buy the deluxe, and the salesman was happy to sell that and collect the large commission.

milesf 12y ago

I use http://camelcamelcamel.com http://camelcamelcamel.com to track stuff I'm looking to buy. Here's a screenshot from my price tracking last year on a WD 6TB drive: http://i.imgur.com/evOBCVN.png http://i.imgur.com/evOBCVN.png

steven2012 12y ago

Surprisingly most home improvement things are cheaper at Home Depot rather than Amazon. I learned this one the hard way. Also Amazon routinely displays "original" prices that are much higher than other places and with the "discount" falls in the same price range.

known 12y ago

You'll buy anything you think Amazon is losing money on.

known 12y ago

I think Amazon is emulating http://en.wikipedia.org/wiki/S%26P_500 http://en.wikipedia.org/wiki/S%26P_500

eurusd 12y ago

I also like the simple but effective Keepa http://keepa.com http://keepa.com to compare amazon prices in different countries at the same time. In Europe for example, Hometheater amps are 50% cheaper in Germany than france, while france is cheaper on something else and UK is cheaper on tools and sometimes projectors (depending of FX rates)

AnonJ 12y ago

"Rising the price of the cables by 33%" feels really sinister and underhanded. Is this guy totally sure that it was done intentionally.