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Monday, July 09, 2012

Amazon marketplace pricing wars?

Pricing on Amazon (particular pricing involving Amazon partners) sometimes seems very odd. Here's an example:

There's some thought that it's the Wild West out there, with some vendors behaving badly.  The Marginal Revolution blog [ http://marginalrevolution.com/marginalrevolution/2012/07/higher-frequency-book-trading-walras-collusion-or-both.html#comment-157609490 ] links to this Financial Times article [ http://www.ft.com/cms/s/0/26c5bb7a-c12f-11e1-8179-00144feabdc0.html#axzz203OKi0Gf ] suggesting that vendors are using sophisticated bots to change their prices often and get an advantage over competition.

…Amazon sellers – using third-party software – can set rules to ensure that their prices are always, for example, $1 lower than their main rival’s.
…Some sellers have even created dummy accounts with ultra-low prices to deliberately pull down those of rivals so they can corner a market by buying their goods, say pricing experts. That practice violates Amazon’s rules of conduct.
Some commenters at MR have contended that lowball prices will usually not be honored by the merchant.  I don't know how often that's true, but I ordered the above item at approximately the $2.11 price last week and received it Friday (with $3.99 shipping, still under $6.50).

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