Amazon’s algorithm is hiding the best deal from many customers
propublica.org
propublica.org
In the ProPublica article, the example of Loctite Liquid glue is used:
https://www.amazon.com/gp/offer-listing/B004Y960MU/ref=dp_ol...
The first listing is indeed from Amazon.com as the seller. It has the cheapest price at $5.97 with "FREE Shipping" if you have Prime. So I assume that without Prime, there is a cost for shipping.
The next listing is as the ProPublica article claims, from "TheHardwareCityCo", with a price of $6.75 with free shipping.
Assuming that that free shipping, unlike Prime, is unconditional, it is worth pointing out that TheHardwareCityCo offers a shipping date from "October 3-12". I'm assuming that you also don't get the return guarantees that you do from Amazon.com.
Furthermore, the massive markup cited in Quartz/ProPublica -- $1,400 extra for buying a basket of the 250 most popular products -- only applies if you decided to buy each item individually, as Amazon automatically gives you free shipping (Prime member or not) if you buy $50+ worth of items.
Not seeing the big problem here, to be honest. Frankly, I get annoyed when the default seller for an item is not Amazon, and I have to dig to find the listing that has Amazon as the seller. I have Prime, so that makes a big difference, but I prefer Amazon's reliability over spending time trying to figure out which third-party seller is the least shadiest.
I was disappointed in the propublica article since they usually do very good work.
Amazon always shows the option to see other sellers and even prompts you when there is a lower price that might not have prime shipping.
Most of the time I pay the more expensive price for the following reasons:
1) It is sold by amazon. I know I don't have to worry about the possible issues dealing with third party sellers. 2) The product arrives faster. As a prime member, most items are shipped 2 day. If I look at the other options they are usually 1 week or more out. 3) I trust amazon. This one is the irrational reason due to the fact I could probably save money by looking at a meta shopping engine or ebay. I have a long history as a prime member and trust their pricing and their customer service.
I do think you hit upon something with batching of orders. We rarely buy one off items and typically put things in our cart for an order a couple of times a month. Even then, Amazon offers full transparency. When you revisit your cart, Amazon shows you the price changes and offers to show you lower prices without prime.
Worth noting that Amazon has been regulated (in the UK) over their adverts and use of the term "free shipping".
https://www.asa.org.uk/Rulings/Adjudications/2016/8/Amazon-E...
When I'm not logged in, it shows it has free Prime shipping. When I do log in to my account without Prime, it shows it has free shipping with an order of $49 or more. The only way I can find to see the shipping cost is to add it to my cart and proceed to checkout, which makes it a bit difficult to comparison shop.
> Assuming that that free shipping, unlike Prime, is unconditional, it is worth pointing out that TheHardwareCityCo offers a shipping date from "October 3-12". I'm assuming that you also don't get the return guarantees that you do from Amazon.com.
Amazon also seems to overstate these shipping dates to make Prime shipping look better. Almost every time I have ordered something via a 3rd party like that, it arrives before the earliest date Amazon says it could.
They do that for themselves as well. Their shipping estimates for super saver shipping is always exaggerated, with packages arriving in 2-3 business days rather than 5-7 estimate
I expect Amazon to recommend me products that it itself is selling or it itself has in its own warehouse, the sellers are secondary, if I wanted to buy from another seller I would use eBay.
The fact that there is even an option to then price compare with other sellers and purchase direct from the seller while on the Amazon website is a pretty cool bonus, not Amazon trying to scam me.
It's not a price comparison site searching for the best price and giving it to me (if I wanted that I would use a price comparison website) and it's not eBay or a marketplace, it's Amazon, a direct retailer with an added bonus of allowing you to search a separate marketplace but it's main business is selling directly!
The marketplace is mainly clever marketing by Amazon, people use Amazon because they don't need to look else where because it has everything, since even direct order companies sell on there, hence once some people discover this they just use Amazon for everything (I know lots of people that do this)
Is the key bit. They aren't trying to be coherent, they are advocating for anti-democratic law, aka regulation.
In general, when a person or company proclaims something like this, it should be viewed with robust skepticism.
If it were undeniably true and obvious from evidence, they wouldn't need to say it.
If they need to say it, it could be because no one else is saying it.
Similarly, if your boss or a co-worker says "I'm all about X," it may be that they just read a book that mentions X, or heard it in a meeting and just now decided that it would be good to be seen in that light. If they really were all about X, you'd already know it.
In my very limited experience: Advertising/PR groups are given the negative stereotypes for a company, and are told to combat that image. It's because that is cheaper/easier than fixing the actual problem.
The result for me has been: Advertisements like that generally tell me what everyone else hates about that company.
It also takes into account length of time as a seller, feedback, valid tracking, and other things that customers want.
If you want the lowest price, you can easily choose that one. But most people do not, and it's silly to expect Amazon to cater to the minority at the expense of the majority.
If I buy directly from Amazon I mostly now that if it's broken I can easily send it back and that they are actually using most german laws (except financials), so as a Customer I know I have protection and the company won't die in the lifetime of the product.
Many Amazon customers prefer sold or fulfilled by Amazon even if the final price paid is higher than the best price. Sometimes the best deal is not the best price - one has to factor in the hassle of deciding whether a given 3rd party is worth dealing with.
Lastly, I'm also not sure how many customers use Amazon in a way where this supposed hiding of the best prices would be detrimental to them. Speaking as a non-Prime customer of over 15 years, I have never once paid for shipping for an Amazon.com/FBA item. I tend to accumulate items that I'll order eventually in my cart's "Saved for later" and use them to pad out orders I want shipped now up to the free shipping threshold.
You have the influx of Chinese sellers that "bribe" top reviewers into writing "unbiased" reviews (lol!). I am a Top Reviewer, and I get about 3-5 emails a day asking for reviews in exchange for free items.
Not only that, sorting by Best Rating no longer sorts by a weighting of the number of reviews and the average rating, so items with 3 reviews all 5-stars beat items with 1000 reviews average 4.9 in the search results.
No wonder people play this game now.
1. "Amazon doesn’t count shipping costs for its own products, or those it fulfills for others, when customers rank a product by “price + shipping.”"
2. "Amazon said: [..]The sorting algorithms [..] are designed for that 90% of items ordered, where shipping costs do not apply.”"
This is not just misleading, this is a step beyond. It's a big company, it should take care of its customers and if it does not, customer protection agencies should go after it.
http://personalization.ccs.neu.edu/papers/price_discriminati...
This may not refute the main point of the article, but if you are a prime customer it seems Amazon is still doing the right thing for you. (Unless I missed something).
Maybe, as some have argued in this thread, the algorithm is agnostically detecting Amazon's popularity. So I don't want to pick on just Amazon.
I have the same problem if I drive to a new state. I'll have no idea how much things really cost, because I made the mistake of not memorizing all local sales tax schedules along my route before getting in the car.
We should make all merchants play on the same playing field, one with the lowest possible incentives to confuse customers by showing them any price they won't actually pay.
I disagree specifically with the taxes not being added on a sale separately. I live in Mexico, a country that does mark any sale price as the sale price + taxes. Your taxes are already included in the final price. I will attempt to explain why I believe this is a bad thing below.
It's hard to appreciate it as someone on your side who grew up always seeing the taxed amount in receipts and the like, but here in Mexico people are largely uneducated about how much they are paying for purchase taxes. We are currently paying 16%[1] on purchase taxes aside from frontier states.
Every time this comes out in conversation people tend to be shocked, usually thinking the amount paid would be less. The sad part of this is that it's common not to know, if I had to guess around 95% of the community likely doesn't know how much purchase tax is, with a big part of the other 5% being business owners that have to deal with it in a daily basis.
What I believe is that constantly seeing how much you are being charged when it comes to your taxes makes you politically aware of how much your state is charging you. Having this number hidden for you is certainly convenient, I won't lie about that. Having the number you see on a shelf be the exact same number you are going to pay certainly is easier, however, I believe this knowledge by the population helps towards keeping politicians honest.
Since all of your citizens are painfully aware of exactly how much you are paying on every purchase, raising that number becomes substantially harder, since it would be met with much bigger backlash.
This is a theory that I have bouncing around in my head, and I don't have any hard evidence to back it up, but in conclusion I think that having visible taxes helps educate the population, and keep the government honest. Which would be my argument against hiding that number in a "purchase total" figure.
I think there's a risk though, I don't think people here realize how much the state is charging either, they just slide a card and never look at a receipt.
And in general, while I want people to know the price of taxes, if that comes at the cost of not knowing the price of goods, then I worry that cost is very steep. Government transparency is a priority for me, but price transparency a slightly higher one.
Maybe an ideal compromise here would be a bolded final price, with a breakdown of how much in tax and fees beside that, or broken out on any receipt.
Additionally, we impose various surreptitious tax-like requirements on companies: health insurance can't charge your actuarial price (equivalent to taxing the healthy and paying the sick), rural and city customers must pay similar prices for various resources, etc.
But I agree with you - we should replace all these taxes with a single transparent consumption tax.
Highest theoretical rates, the effective tax rate is another story.
"The top statutory tax rate of 35% in the U.S. is somewhat higher than that of 30 other OECD countries, but the average effective tax rate — the actual rate paid after deductions and credits — is slightly lower than our competitors" [0]
[0]http://www.americansfortaxfairness.org/tax-fairness-briefing...
Additionally, the PwC study the CRS uses [1] provides a full list and ranking. The only OECD countries with higher effective rates are Japan, Germany, and Italy. So, the US effective rate is lower than that of only 3 of "our competitors" and higher than that of the other 26.
[1] http://businessroundtable.org/sites/default/files/Effective_...
I understand that including the US would raise the average, but it shouldn't take it from below the US average to above the US average.
I guess that would be difficult when there are several shipping methods being utilized. If I buy an item stocked by amazon I'll usually get it the next day via amazon logistics, DPD, or royal mail (when I'm in the UK).
If it's a marketplace seller it could be royal mail first class, royal mail signed for, royal mail 'wish upon a star' class or, if I'm really unlucky, some random 'gig economy' courier.
That's an awful lot of options to weigh up and most of the time I get no choice in which will be used.
Like someone else has commented, I'll buy items stocked and fulfilled by amazon, whenever it is an option, and I don't care if that means I pay a bit more.
Buying cheapest usually costs you more in one way or another.
Yes there are options, but if sites can store billing information, they can store shipping preferences. They can pick a reasonable default.
In fact, they already have all the necessary information, you can tell by the way some online merchants will have a single price in bold, then below that in fine print +$x shipping + $x tax, like so: http://imgur.com/krReEkz
They just don't have any interest in advertising more accurate (and thus higher) prices than their competitors.
They know the numbers, there's no reason to hide the final price here, except that the competitive market is forcing anti-consumer behavior.
On one hand I just wish they wouldn't list marketplace sellers when they already stock something themselves. But, doesn't having all those other options (as imperfect as they are) sway things a little in the consumer's interest?
Your reply: "I'll buy items stocked and fulfilled by amazon"
My next post: (Me too, my point wasn't really about Amazon.)
Your reply: "this isn't a problem unique to amazon" (and your evidence isn't even from amazon, so that's a strange way to make a point about amazon!)
Me: ಠ_ಠ
I get it, you're trolling me. Very funny.
Really now? Can you be that obtuse? It's to sell directly and make more profit than having a 3rd party sell an item.
Tl;Dr. Amazon prefers to return Amazon's stuff on top of searches. News at 11.
For instance, if you search for mouse pad in the US you'll see the Amazon Choice is a third party product as is the Best Seller.
The Amazon Choice has this right under the price:
Note: Available at a lower price from other sellers, potentially without free Prime shipping.
When you click on it you see you can save $1.30 if you're willing to wait 3 weeks. To me, this is handled properly.
UK suppliers tend to ship same day or next day, with delivery within one to three working days.
If a supplier isn't overwhelmed with orders, the rational choice is to ship ASAP, because it increases positive feedback and the prospect of reorders.
Not all suppliers understand this, but most do.
You only have to wait weeks on orders shipped from abroad. But the product source country is usually obvious from the listing, so you can allow for that - if you want to.
Because idealy the manufacturer just sends stuff to FBA, pays FBA it's 15% percent, and becomes the lowest cost supplier, right ?
A little time with your favorite search engine should find plenty of horror stories, especially from merchants selling used CDs, DVDs and Blu-rays, there's been suspicion in the past that false claims of piracy were being used to suppress the supply of these items.
And don't they charge for holding your inventory? They'd be insane not to, and that charge might be higher than you can arrange.