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Comment by lsc | Hacker News Reader

oh man. reminds me of the days when I sold books on amazon and half.com. I wrote a script that took the 'nickel less than the other guy' approach.

These things are /wonderful/ when it comes to making the market more efficient. Really, though, the shipping costs eat up most of the efficiency. Amazon needs an easy way to say "I want these 10 books, used. Find me the lowest price (including shipping)" - the idea is that the more books you could buy from one seller, the less shipping friction would be involved, but amazon isn't really set up that way, which makes it much less efficient for the low end used books.

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Nice example of the Knapsack Problem: http://en.wikipedia.org/wiki/Knapsack_problem

Everyone always mentions that buying more items from a single Amazon store would make shipping cheaper? Is that ever true? Of all the online stores I've made purchases from, I believe monoprice is the only one that appears to base shipping on tiers based on item size/mass. All the rest simply charge a set rate for each item, and it doesn't matter how you divide your shipments up into different orders.

well, the post office would take less of a cut. shipping one one-pound box is usually a lot cheaper than shipping two half-pound boxes. In theory, amazon could either give that surplus to the seller, to the buyer, or they could split it between the two. (I guess they could also keep it for themselves, but that might have negative PR consequences.)

They'd also price it "above equilibrium" leading to a loss of potential profits.

Amazon gives you the option to group things to reduce shipping. And if you do this you do get a discount and you will revive a single box with several items in it. If you are ordering small and cheap items like USB cables the discount can be significant.

Another very common system is to base the shipping cost on the total order price. Not very accurate, really, but mainly used because it's simpler for people to handle when filling out the order form that comes with a paper catalog.

Interestingly I was reading a paper about this the other day:

http://faculty.cs.tamu.edu/ioerger/ICAI04-linli1.pdf

It uses textbooks as its example too :)

There seems to be a reasonable amount of literature on algorithms for this kind of combinatorial optimisation, including reasonably fast but well-performing heuristics like the above. Maybe amazon should pull their finger out.

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