When I started working on <a href="https://trackif.com" rel="nofollow">https://trackif.com</a>, 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.<p>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 <a href="http://blog.trackif.com/trackif-smart-shopping-guide-store-price-matching-correction-return-policies/" rel="nofollow">http://blog.trackif.com/trackif-smart-shopping-guide-store-p...</a> since I felt like I was hoarding knowledge.)<p>Have retailers always played games like this? Or it just a side-effect of sales moving online?
<a href="http://camelcamelcamel.com/" rel="nofollow">http://camelcamelcamel.com/</a><p>(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.)<p>Edit: linkified. (Thanks, canvia!)
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.
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.
It's not only amazon that does this with loss leader pricing, it its also my local grocery store with milk and bread.<p>For me what gives me the impression amazon has the lowest prices are their nearly nonexistent profits. Whatever's up may not the the <i>cheapest</i> 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.<p>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 <i>has</i> 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.<p>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.<p>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.<p>Gillette is famous for pretty much giving away the razor and making money on the blades.<p>There's even a word for it: "loss leader".<p>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.<p>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.<p>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.)<p>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.<p>Amazon underbid competitors on the short tail and make it up on the long tail.<p>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.<p>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.
I dont get why they use HDMI cables as their first example: we keep buying HDMI cables because they get busted, not because we need more.<p>AmazonBasics is currently the best cheap cable (replacing Monoprice's now that they aren't nearly as good as they used to be).<p>Also, why does the article call them HD cables. Whats an HD cable? None of my ports say HD, they say HDMI.<p>And it doesn't even get into how Prime games S&H over the long term.
I also like the simple but effective Keepa <a href="http://keepa.com" rel="nofollow">http://keepa.com</a> 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)
I think Amazon is emulating <a href="http://en.wikipedia.org/wiki/S%26P_500" rel="nofollow">http://en.wikipedia.org/wiki/S%26P_500</a>
I use <a href="http://camelcamelcamel.com" rel="nofollow">http://camelcamelcamel.com</a> to track stuff I'm looking to buy. Here's a screenshot from my price tracking last year on a WD 6TB drive:<p><a href="http://i.imgur.com/evOBCVN.png" rel="nofollow">http://i.imgur.com/evOBCVN.png</a>