It’s all a popularity contest: Because Amazon knows that the most popular items will often be the ones customers are searching for, it’ll identify the belles of the ball on its site and price those specific product models lower than its competitors. But those items that aren’t so much in the limelight will get priced higher, according to analysis of Amazon’s pricing habits in a new report from Boomerang Commerce, reported by Re/code.
In one example, Amazon tested price reductions on one of its most popular TVs over the six months leading up to Black Friday, when it dropped the price by $100, below competitors’ prices. However, the price of HD cables that customers often shop with along with a new TV went up 33% ahead of the holidays, Boomerang says.
Those particular cables weren’t among the most popular in their category, which means people aren’t going to see those prices and have it affect their overall perception of Amazon. And since they’re not as expensive as say, a huge TV, customers might not be doing as much comparison shopping.
“Amazon may not actually be the lowest-priced seller of a particular product in any given season,” the report reads, “but its consistently low prices on the highest-viewed and best-selling items drive a perception among consumers that Amazon has the best prices overall — even better than Walmart.”
How Amazon Tricks You Into Thinking It Always Has the Lowest Prices [Re/code]
I don’t get what’s all that tricky here. Of course Amazon doesn’t have the lowest price on every item it sells — no retailer does or ever could. And HDMI and other cables are typically where most retailers selling TVs make their real profits, along with hawking ridiculous, high-profit extended warranties. So it’s not surprising that Amazon, like Best Buy, would try to make a few bucks off the cables from consumers who’ve never heard of places like Monoprice, which sells them for far less. I’d bet Amazon’s prices on these accessories are still lower than Best Buy’s.
I read the Re/code article, which mainly states the obvious: in retailing everybody wants to be perceived as having low prices, and plans their marketing strategy accordingly. The article points out that there is “a perception among consumers that Amazon has the best prices overall — even better than Walmart.” But strangely, it doesn’t address the more important question: is that perception nonetheless accurate? Who’s got the lowest prices, overall?
I like making use of a number of browser extensions (Invisible Hand, CamelCamelCamel, etc.) to make certain I’m buying from the cheapest source. Amazon is regularly the cheapest (for the things I buy online) especially when you factor in Prime. I also use RedLaser on my phone to make sure I’m buying from the place that has a given grocery item at the best price, all moderated by the cost of time to get certain places. Another fun thing to do: report lower prices to Amazon and then wait a day or so with the item in your cart. I saved $12 on a blender that way, still free 2-day shipping.
I will agree with the statement that Amazon is not always the lowest price. However, often when comparing shipping costs in addition to the item cost they are the lowest. If I am buying $55 worth of items, but one of those items is $10 on Amazon and $8 elsewhere, I’ll still get it from Amazon since shipping is free but could be up to $10 on the other site. I have often done this comparison with items I wanted and found that my total cost of ownership is less by buying at Amazon. I also know their support is great if there is any problems with shipping or receiving a broken/damaged item.
Amazon changes prices all the time. I have seen the ASUS Chromebox M004U range from a low of $139 to a high of $169. Typically for this product the highest prices are on the weekend and Tues or Wed is the lowest price.
Interesting when Amazon changes the price, NewEgg changes their price within the hour.