Sounds like a solution looking for a problem to me.
For all of this complexity, Amazon rarely has a significant price advantage versus most retail stores.
From a customer point of view, competitive categories have a flea market quality to them. For a company that is usually optimized for customer experience, this is a weird science experiment.
IMO, they should make price adjustments less fluid. Require merchants to get to the lowest price as soon as possible, and punish stupid resellers that throw up divergent high/low prices by forcing them to live with it.
I suspect (here as with the earlier story about imposter goods on Amazon) that the explanation for Amazon's behavior is that it doesn't have the resources to moderate the system its created. Disallowing price adjustments altogether wouldn't work for many categories- sometimes the price of milk just does go up, and retailers can't always just eat the difference. Disallowing only manipulative price adjustments would require either a sophisticated AI (which would be liable to fail in perverse-looking ways) or an expensive team of human analysts (which would at least only fail in plausible-looking ways.) But until these sorts of issues really start effecting Amazon's bottom line, its not going to touch them.
It's hard to know how it affects them because Amazon is held to a special standard where making money isn't really a thing.
I know anecdotally that non-techie people whom I associate with increasingly are wary about Amazon after getting scammed by fake phone accessories or gouged by Christmas toy prices.
When you consider that Amazon is moving into new categories where trust is critical, like food, this is going to hurt them. Every grocer peddles trust, "we're good neighbors", etc.
The issue is that there is no such thing as "the lowest price", it depends on supply and demand, and either can fluctuate drastically in short periods of time (i.e. surge pricing for uber). The manipulations the article mentions, that exist in all markets, are very rare.
Once upon a time I worked at an ebook company. We were naively trying to compete with Amazon (i.e. we sold every book we could get our hands on).
Sometimes we'd negotiate a deal with a publisher, and slash the price of a book to a point where no one involved in the transaction was making money, sometimes we and the publisher would be losing money... Without fail within an hour the list price of the content on Amazon would be exactly what we set.
Amazon were/are prepared to eat the loss: I suspect this is the case for all products that are sold by Amazon. It was a very effective strategy for them. My company went into administration after just 9 months.
I once read the account of a student who gamed the bots sellers use to competitively price their products in order to get cheap textbooks.
The person made a dummy seller account, setup a bot, and listed the books they needed. As they lowered their listing prices, the real sellers' bots auto-price matched.
The student then bought all their books at ~1/10th the original price, canceled any orders they may have received, and deleted their store.
A friend of mine once claimed that Amazon could sell at cost and still profit - they'd charge the customer for an item immediately, but have 30 or 60 days until they had to pay the supplier, so the interest on the payment in the meantime was profit. Not a lot on a $15 collection of toilet paper (for example), but multiple by the number of Amazon customers...
Of course, that skips the costs of Amazon staffing and infrastructure, and I'm sure Amazon sells most items above cost (and potentially some below), but I took it as a good example of how the scale involved meant that few can compete with Amazon.
I've used several repricers, it's a must when selling competitive products with a large numbers of skus.
One thing I'll note is that there's up to a 15 minute delay before a price change takes effect.
Also, Amazon will often "suppress" the buy box if no sellers have a good price. You can still buy, but there's an extra step needed. "Other sellers", then add to cart.
I don't see what's so special about continuously updating your price as a seller. This happens in pretty much every grocery market in the Middle East or Eastern Europe.
I also don't understand how the supposedly fierce competition between sellers ends up yielding prices that are higher than offline stores. Seems the reporter missed the true story.
What places do you have in mind talking about Eastern Europe? "Grocery market" for 99 % of people (from Eastern Europe) is a "shop"/supermarket/mall (think of Lidl, Tesco or Carrefour as examples) and even outdoor markets, if they exist at all, usually have set prices (which may change during the day, of course).
No but that's also not what happens on Amazon. Prices may double but that's also pretty standard for fruits & vegetables when supply doesn't match demand.
It's quite likely that many sellers don't actually have the stock they claim to have and relies on getting them elsewhere in case a large order comes through, which incurs an overhead. My experience in online retail is limited to electronics but this kind of inventory inflation is extremely common.
It's interesting to know that products on Amazon might not be the lowest price, or always close. I thought there was more manual price research and setting, like Walmart.
Walmart can't change their prices as fast; humans have to re-label things. For now.
Brick and mortar retailers can use radio-controlled e-ink shelf price tags for minute by minute price changes.[1] This hasn't really caught on yet, but the technology is ready.
My mother used to be a scan coordinator at a grocery store. We have been talking about this eventually happening for over a decade. Although based on her experience, the infrastructure for even letting her know what pricing should be requires a major IT overhaul as well.
The cost and wiring to power eink displays is too much, due to the USD being fairly stable, prices don't change daily/hourly, which would help eink signage for shelving make sense.
You essentially either need a power drop to each section of shelving, or you have to replace batteries on every sign through your store every X months or years.
France retailer Carrefour uses ESLs in all their stores, for every SKU. They use ESL's from Pricer who says Carrefour uses 12 million labels, deployed in 2004, and they are updated via in ceiling infrared transmitters. [1]
ESL's are also common in Germany. And in the USA some Whole Foods use them.
This random blog claims "The ESL market is estimated to grow from 186.5 million dollars to 399.6 million dollars by 2020" [2]
Ses-imagotag showcases some interesting applications of their tags including manufacturing [3] and office use.
This is pretty awesome. The system is smarter than I thought when I saw it in-store.
Since the tags are networked with infrared, they can flash on command. For example when store employees are trying to find a particular product for stocking, or retrieving it for a delivery order (example safeway.com delivery).
We have a grocery store in Krefeld, Germany, which uses e-ink price tags exclusively[1]. But I never noticed a real-time change when I was shopping there.
That's what you'd think. But with Best Price Just For You!™ technology, you don't actually get the price on the shelf. You get the lowest listed price in the last hour. If the price is raised you Keep Your Locked In Price™. If the price is lowered you get the new better price!
IIRC one of the US grocers (stop and shop or Kroger?) actually tried that as an ad for their store card: "you do not even know how much you will pay for many products, but it will be a lower price". Needless to say this didn't run for a long time.
> In case you're not being facetious: the price would change overnight not during business hours.
I'm not. Parent said "minute by minute", that's why I asked. Overnight is what I was assuming too, until I read that comment. Couldn't tell if it was a joke or serious.
Minute-by-minute seems unnecessarily precise. I doubt the efficiency gains would outweigh the infrastructure cost and maintenance of a real-time system. The psychological influence of .99 pricing is probably more effective.
I've actually started switching grocery buying to walmart - because they do have the best price, and they have free shipping.
With Amazon it's annoying - I have to keep items in the cart for a while to see how the price ends up. That's worth it for expensive electronics, but not groceries.
Watch out. Walmart gets different SKUs for the products they carry. I've seen snacks that were a couple of ounces smaller, for example. Also, their meat and produce is much lower quality than other places.
Sorry for the off-topic, but why is this available free on Morning Star, and paid-for on WSJ? Don't assume Morning Star is ripping WSJ, so is the pay wall a lie (for this (sort of) article)?
the author works for wsj.. both wsj and dow jones newswires are owned by news corp. The article was published on dow jones newswires, which morningstar has subscribed to and is paying for.
So the answer is, morningstar has paid for this article.. and they've decided they can make it up using ads or other sources of revenue.
It would be nice if HN would make a change to their link submission code so that it automatically changes WSJ URLs to use the Facebook redirect workaround, since they are the one major site that disabled the Google workaround.
But until then we have to do it this way.
Most people on HN are not WSJ subscribers. Given that the purpose of posting links on HN is to be able to discuss them, WSJ links should either a) not be posted here, or b) they should have a paywall workaround automatically built-in. The entire reason that the "web" link exists is because it was assumed that sites would not risk being deindexed by Google for cloaking, and would therefore disable their paywalls when Google was the referrer. WSJ is the only major site that has chosen to brazenly run afoul of Google's cloaking policy (sadly, they have not yet suffered the consequences). So they warrant special treatment here, and by implementation of the "web" link, HN has already shown that it is willing to assist in paywall bypass.
Off-topic: Am I the only who can never load the comments on WSJ articles? This is across browsers (Firefox/Chrome) and platforms (Windows/Mac/iOS), and even with adblockers turned off. This article says it has 36 comments, so it must be working for most, but I can't seem to figure out why it never works for me.
This is a very unfortunate trend where sellers are selling not based on the value of the item/service, but demand/need of the consumer. It has been a common practice in airline industry, and upto some extent in healthcare. But now this practice is creeping into online shopping too. This can soon fall into unethical territory. Imagine an item, that costs $1. Just because it could be life-saving for someone, or someone needs it badly, you sell it at much higher premium. You are not charging for your service, but exploiting other people need.
Also, most people don't really understand how airlines price their tickets, and so assume some sort of "we're watching and will raise the price on you" scheme when there are more mundane explanations available.
I believe OP was referring to price discrimination and not supply/demand. e.g., as if Amazon raised all wound care products instantly for you after you made a search for "band aids."
A grocery store with e-ink prices could raise the prices for bottled water instantly after a natural disaster.
For all of this complexity, Amazon rarely has a significant price advantage versus most retail stores.
From a customer point of view, competitive categories have a flea market quality to them. For a company that is usually optimized for customer experience, this is a weird science experiment.
IMO, they should make price adjustments less fluid. Require merchants to get to the lowest price as soon as possible, and punish stupid resellers that throw up divergent high/low prices by forcing them to live with it.