When I started working on 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-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?
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.
In running PricePlow (https://www.priceplow.com), I can say that our products (vitamins / supplements / protein) are complete and total chaos on Amazon. They clearly don't care about this corner of the market and let the marketplace stores run wild.
Despite some of the monumental volume that some of these products have, their listings are nothing short of unorganized disaster. There are definitely places where Amazon could (and should) have better pricing, but is actively neglecting it - and so are the marketplace stores for various reasons.
But that said, over the past half dozen plus years of doing this, there's been a huge, distinct shift towards deeper trust in Amazon.
In some of our smaller PricePlow-driven sites, when in doubt with where to send traffic (like if a product is out of stock or the price is a tie), I used to send them to Bodybuilding. Now, that's no more - the demographic is still cautious, but far more friendly to buying on Amazon... mostly for the reasons stated here in this discussion.
A lot of the industry hasn't figured that out yet, so it's been an interesting transition.
End of the day, from what I've seen, Amazon is a mess and could be doing a lot better with certain segments, but still does well despite their worst efforts. They're heading towards unstoppable status.
Interested if you get more profit from demanding sign-in before you'll let people follow your Amazon links. Have you tried just using referrer links - presumably you do it this way on the basis that long term association gains enough to let one-time users abandon and skip direct to the site for purchase??
Interesting site, would definitely try it if there were a localised version for UK, anyone know of something similar for UK sites??
(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.)
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:
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.
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.
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.
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).
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.
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!
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!
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
> 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.
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.
I also like the simple but effective Keepa 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)
[+] [-] ecaron|11 years ago|reply
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-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|11 years ago|reply
* 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.
[+] [-] MicroBerto|11 years ago|reply
In running PricePlow (https://www.priceplow.com), I can say that our products (vitamins / supplements / protein) are complete and total chaos on Amazon. They clearly don't care about this corner of the market and let the marketplace stores run wild.
Despite some of the monumental volume that some of these products have, their listings are nothing short of unorganized disaster. There are definitely places where Amazon could (and should) have better pricing, but is actively neglecting it - and so are the marketplace stores for various reasons.
But that said, over the past half dozen plus years of doing this, there's been a huge, distinct shift towards deeper trust in Amazon.
In some of our smaller PricePlow-driven sites, when in doubt with where to send traffic (like if a product is out of stock or the price is a tie), I used to send them to Bodybuilding. Now, that's no more - the demographic is still cautious, but far more friendly to buying on Amazon... mostly for the reasons stated here in this discussion.
A lot of the industry hasn't figured that out yet, so it's been an interesting transition.
End of the day, from what I've seen, Amazon is a mess and could be doing a lot better with certain segments, but still does well despite their worst efforts. They're heading towards unstoppable status.
[+] [-] DiabloD3|11 years ago|reply
Also, when are you going to add an Android app that does barcode scanning?
[+] [-] pbhjpbhj|11 years ago|reply
Interested if you get more profit from demanding sign-in before you'll let people follow your Amazon links. Have you tried just using referrer links - presumably you do it this way on the basis that long term association gains enough to let one-time users abandon and skip direct to the site for purchase??
Interesting site, would definitely try it if there were a localised version for UK, anyone know of something similar for UK sites??
Presumably though Amazon do per-user pricing too?
[+] [-] stretchwithme|11 years ago|reply
They try to get the most money out of you while you try to spend as little as you can.
Yes, its all very shocking.
[+] [-] TheLoneWolfling|11 years ago|reply
(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!)
[+] [-] exhilaration|11 years ago|reply
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.
[+] [-] canvia|11 years ago|reply
[+] [-] denzil_correa|11 years ago|reply
[+] [-] dominotw|11 years ago|reply
[+] [-] notatoad|11 years ago|reply
[+] [-] thirdsun|11 years ago|reply
[+] [-] chaostheory|11 years ago|reply
[+] [-] ctdonath|11 years ago|reply
[+] [-] GabrielF00|11 years ago|reply
[+] [-] sparkman55|11 years ago|reply
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
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!
[+] [-] branchless|11 years ago|reply
[+] [-] peteretep|11 years ago|reply
[+] [-] ZenoArrow|11 years ago|reply
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).
[+] [-] cdcarter|11 years ago|reply
[+] [-] Tarang|11 years ago|reply
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.
[+] [-] DougWebb|11 years ago|reply
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.
[+] [-] WalterBright|11 years ago|reply
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.
[+] [-] JoachimSchipper|11 years ago|reply
[+] [-] WalterBright|11 years ago|reply
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.
[+] [-] WizzleKake|11 years ago|reply
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.
[+] [-] driverdan|11 years ago|reply
[+] [-] rasz_pl|11 years ago|reply
They posted about $10 device, and almost immediately Amazon pumped up the price to $30.
[+] [-] steven2012|11 years ago|reply
[+] [-] gdulli|11 years ago|reply
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.
[+] [-] kmfrk|11 years ago|reply
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.
[+] [-] zeeshanm|11 years ago|reply
[+] [-] bronson|11 years ago|reply
http://www.npr.org/blogs/money/2014/11/10/363103753/textbook...
(best imo was talking about the whole mess around writing textbooks)
[+] [-] xenadu02|11 years ago|reply
[+] [-] returnofthejedi|11 years ago|reply
[+] [-] tmalsburg2|11 years ago|reply
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.
[+] [-] DiabloD3|11 years ago|reply
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|11 years ago|reply
[+] [-] listic|11 years ago|reply
[+] [-] kenjackson|11 years ago|reply
[+] [-] eurusd|11 years ago|reply