Popular Amazon Sellers Don’t Always Have the Best Prices Ahead of Time
When you go to a product page on Amazon, you can expect to be shown the best price. But new research shows Amazon is more likely to prioritize algorithmic pricing merchants, and they tend to charge you a little more than other sellers.
Algorithmic pricing is a service that independent sellers can use to automate their pricing strategy. Basically, sellers decide whether they want to understate, exceed, or sit somewhere in the middle of the typical prices for the same product, and the service does the rest for them. This is convenient for sellers, but Cristo Wilson, lead researcher and assistant professor at Northeastern University, found that these so-called “algorithm sellers” in question had higher prices 60% of the time. In most cases, the price only goes up by $ 1, but in many cases, the price jump is between $ 20 and $ 60. Prices are also much more volatile among algorithm vendors; About 10 times that, Wilson says. His team found that a third of the 1,000 products they tracked changed prices once a day, and some of them changed more than eight times a day.
Wilson says Amazon has a relatively small number of algorithm sellers (anywhere from 2% to 10%), but those sellers cover nearly a third of the top-selling products offered by outside merchants. If you want to be sure you are getting the best price for a product, Wilson recommends that you always take the extra step and go through the list of all sellers. Chances are, you don’t see the best price ahead of time.