Amazon Sellers Engaging In Price Wars, Shift Prices Multiple Times Each Day

While some people who shop on Amazon are only looking for items sold — or at least fulfilled — by Amazon, lots of you are also buying things from the many, many third-party sellers who use the site as an online storefront. And these sellers are getting increasingly savvy about having a price that will position their item in a space ideal for bargain-hunting shoppers.

The Wall Street Journal and Decide.com teamed up to look at pricing variations on items available at a variety of online retailers. Perhaps not surprisingly, Amazon showed the widest range of prices — and highest number of price changes — in a single day.

For instance, the price on one GE microwave changed nine times during the course of a single day, with the lowest available price ranging anywhere from $744 to $871 in that time.

Of interest is that when the Amazon high price spiked, the same item on BestBuy.com suddenly jumped from $809 to $899, where it remained until after the Amazon sellers’ prices dropped back to around $750. At that point, Best Buy’s returned to its earlier level.

Meanwhile, the price on Sears.com remained fixed the entire day at $899. Hey, at least Sears has a website.

More from the Journal story:

Last month, retailers on Amazon.com changed prices on a Samsung 43-inch plasma television four times over the course of a day, between $398 and $424, according to Decide.com. Around midday, Best Buy boosted the price to $500 from $400 before dropping it back down, while electronics retailer Newegg in the morning raised its price to $600 from $500.

These sort of rapid, follow-the-leader price changes are something that frequent travelers have long been accustomed to. And some online sellers are turning to similar algorithms used by the travel industry to figure out when they should raise or lower prices.

Brooklyn-based kids’ clothing retailer Cookie’s sells through Amazon and tells the Journal that its software checks competitors’ prices every 15 minutes to insure that its items maintain the coveted position either directly under the product’s name or under the “add to cart” button.

Mercent, the company behind this software claims that, between all of its clients, two million prices are changed every hour based on its algorithm, which factors in everything from competitors’ prices, to competitors’ shipping prices, to seasonal sales.

“The long-term implication is that a price is no longer a price,” said Mercent’s CEO.

This could be good or bad for consumers, if online retailers choose to compete against each other by keeping their prices low. However, only a small number of sellers will be willing to go the bottom-dollar route. So once that low-price stock is gone, buyers could be left at the mercy of higher-priced retailers.

Decide.com says it found that price changes appear to be split evenly between increases and decreases, so it’s up to buyers to pay attention to fluctuations and buy when they feel the price is right.

If anyone out there has developed your own personal system for tracking price changes at online retailers, share your story with us at tips@consumerist.com.

Comments

Edit Your Comment

  1. Murph1908 says:

    And the online shopping world turns into the FFXI auction house.

  2. bnceo says:

    Don’t really have a problem with this. However, my one concern is what happened with the software goes haywire and lets someone pay $600 for a Macbook Pro. I can see a third party seller being hesistant on mailing it out considering they are likely to lose money on the deal. And then as a customer, we lose.

    • momosgarage says:

      Actually this happens to me at least twice a year. I see something for sale with an obviously wrong price, buy it and then the seller either never ships, flat out refuses to ship it or claims an “error”. I think Amazon has a 30+ day shipping period, if its not mailed out they cancel the order, even those sold by third parties. I think the constantly variable shipping is dumb. For every properly executed transaction there are a few like mine that never get fulfilled. I would think if it happens often enough the small gains made by succesful “variable cost” tactics would be lost on the many times it backfires, either in man hours lost or simply selling things at a loss.

      • bnceo says:

        I’m at this point now. Saw a great deal on a Macbook Pro late Saturday night. Then on Sunday, I get an email from the seller saying they will ship it via USPS on Tuesday (Monday was labor day). No tracking number yet. But the order is labeled as shipped. Used my Amazon Store Card as I wouldn’t trust it on my regular CC for such a questionable purchase. Crossing fingers!

      • Cerne says:

        “For every properly executed transaction there are a few like mine that never get fulfilled” I highly doubt that the ratio looks anything like that.

  3. Loias supports harsher punishments against corporations says:

    I’m sory, a microwave for $700-800? Hell naw.

    • matlock expressway says:

      Haven’t you ever wanted your TV dinner ready in 2.5 seconds?

      I know I have.

    • HoJu says:

      It’s got to be an Advantium. FAR more than a microwave. It uses halogen and convection along with microwave. We put one in 5 years ago and use it way more than our oven. Nothing comes out looking or tasting like it’s been microwaved. It’s the closest thing that exists to the Jetsons Foodarackacycle, in my opinion. Totally worth the money.

  4. HogwartsProfessor says:

    Hey sellers, your prices are too damn high. Keep them on the lower side and you’ll sell more. I get chased away by ridiculous amounts for stuff I see on Amazon. Give me something reasonable and I will buy it.

    • matlock expressway says:

      An odd thing I’ve noticed is that sellers don’t check other Amazon sites.

      Many times I’ve looked for an out-of-print book on Amazon.com and found sellers wanting 100-200 dollars for it. Meanwhile, the sellers on Amazon.ca have a bunch for 40 bucks (or vice versa).

  5. The Brad says:

    For Amazon and Best Buy, I use http://www.camelcamelcamel.com. It doesn’t check the price on small things every 15 minutes but it does a decent job of telling you when the item you want goes for less than you want ot pay.

    For PC parts, there’s http://www.pcpartpicker.com. This site checks most of the major computer part sites every day at least once a day.

  6. QuantumCat says:

    camelcamelcamel.com is pretty useful for tracking prices of items on sites like Amazon.com, BestBuy.com, and Newegg.com. They show you a graph of the price of the item of interest over time, so you can get an idea of how much the price fluctuates.

    They have Chrome and Firefox plugins, so you can check the price on the spot while shopping (instead of going to their site each time), and you can have them notify you by email or twitter if you want them to tell you when the price on an item drops below a threshold.

  7. RandomHookup says:

    <————————-

    At Consumerist, you are now just a number.

  8. CalicoGal says:

    I put stuff in my Amazon “save for later” cart, and it tells me when the price changes. I have never tried camelcamelcamel though… as a frequent Amazon shopper, I will have to try it!

    Thanks for the tip, ya’ll!

  9. TastyBeverage says:

    When I went to buy a GTX 670 video card the price changed 3 times in one day competing with newegg who was having some giftcard type sale. Amazon then decided to have gift cards. Newegg lowered prices, amazon lowered price, etc.

  10. deathbecomesme says:

    I bought a waterproof dive flashlight about a month ago. It was sold for $42 at the time I bought it from Amazon. The day after I bought it the price dropped to $30. I asked amazon for a good faith credit of the price difference. Now I was only asking nicely and was hoping I would get it. I wasn’t demanding or anything. When the chat rep said she couldnt help me I thanked her nicely and went on with my day. But when the item came in late after I paid for next day shipping I raised hell and got my credit.

    • SpammersAreScum2 says:

      Wow. I assumed Amazon was like some other vendors and credited you (upon request) if the price dropped within some period after it shipped. Nope. According to their Payments FAQ page: “With the exception of TVs, we do not offer post-order price matching when an item’s price drops after you buy it. Our prices regularly change, and the price you paid when your order shipped was the lowest price we were able to offer at the time. We consistently offer competitive prices on everything we carry because we know low prices are very important to our customers.”

      • The Brad says:

        Typically if you call them and ask they’ll give you credit for the difference. Espcially if you’re a prime member.

        • deathbecomesme says:

          I’ve been a Prime member for 3 years. They still refused. They only conceded because I had the late shipment to back me up.

    • Kaonashi says:

      If you don’t mind waiting you could have just returned it and rebought it at the lower price. Most items have a 30 day return and I’m pretty sure they base the credit for a return on the price you paid not the current price.

      • deathbecomesme says:

        I asked that and the rep stated they would refund me the $40 minus shipping since there was nothing wrong with the flashlight. So I would be out $7 if I did return it.

  11. aleck says:

    Knight Capital
    That’s all I have to say.

    • ScandalMgr says:

      You think? After all, con – sumer products are just commodities.

      What’s wrong with a little optimization for the seller, a zillionth of which is siphoned off by royalties to Knight Capital and their likes?

  12. wildcardjack says:

    These “price wars” are sometime an artifact of automated pricing tools available to sellers from third parties.

    As an Amazon Marketplace dealer I’m not fond of that sort of shenanigans. It’s like when you see a flash crash on the stock exchange, two computers duke it out to see who can offer a product for one penny less than anyone else. Sometimes it’s the same computer working for different sellers in a clear conflict of interest. I’d be happy if Amazon cut off access for all pricing and listing tools outside their site, mostly because they’re used by inferior dealers and create inferior listings.