Amazon certainly did not become the world’s largest online retailer by accident. Everything that they do is very carefully calculated to ensure maximum profits. That’s why the homepage, newsletters and just about every other form of communication is customized to suit your browsing and purchase history. Amazon also utilizes some very complex pricing algorithms to help them stay ahead of the competition.
This makes perfect sense. If the exact same product is being sold somewhere else for less money, you’re far more likely to buy from that competitor than you are to buy the product from Amazon. As a result, pricing on individual products is known to fluctuate wildly on a daily basis as those algorithms keep getting fed with new information. For instance, my new book Beyond the Margins may have a current “list price” of $12.97, but Amazon sells the paperback version for $11.10. That’s if you buy it directly from Amazon, but things get even more interesting when you start looking at third-party retailers who also list and sell products through the site.
When I went to check the product page for Beyond the Margins, I noticed something quite strange: someone was selling a used copy of the book for an astounding $999.10.
Considering that there are some third-party sellers on Amazon who are selling my book for less than $10 (hoping to steal some sales away from Amazon directly), I thought this was a completely strange and backwards strategy on the part of not one, but two third-party sellers. One of them has a used copy of Beyond the Margins listed for $999.10, while the other has it listed for a penny more. In both cases, you get a book that’s in “good” or “perfect” condition for about 100 times the price of a new one.
They hope, I’m assuming, that some unwitting surfer on Amazon will click on that “Add to Cart” button and “accidentally” buy the book for nearly $1,000. That’s quite the sizable profit, I’d say. Of course, if you’re reading this blog, you’re probably smarter than that. You could pay the legitimate price on Amazon for a new copy or you could pick up a signed copy from me for $10 (plus shipping) instead. That’s a better deal, don’t you think?
Actually Michael, that is bug in the Amazon algorithms. The two sellers have rules on their copies that are in effect tracking each others cost. They have no limit and they aren’t tracking others so they say go 1 cent above the other and the algorithm changes their prices based on that.
There was a big tech write up about it last year. I will have to go and search for it for another comment when I get a chance.
Found it:
Amazon algorithm leads to $23 price war
I figured the automatic algorithms played a role. Good read. Thanks for that. 🙂