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The Almighty Buck

Amazon Charging Different Prices for Same Items? 343

Posted by CmdrTaco from the ok-thats-pretty-wild dept.
Rambo writes "Amazon is apparently researching consumer's buying habits by arbitrarily changing the prices on DVDs and other products. Computerworld has a story here about it. Amazon refused to say when they would halt the practice, or what criterion they used to set the different prices." Of course I haven't spent a nickel at Amazon since that whole one-click shopping thing, but I can imagine ways that this could be good or bad. Imagine I buy a lot of Anime DVDs. They could note this, and raise the prices by a buck or something. I tend not to do real-time price shopping on items like this: I looked at a dozen online stores when I started purchasing, and I settled on the one that had the features & prices I want. But 2 months later they could jack the prices and it would be months before I noticed. Alternatively they could lower the prices, or lower prices on similiar items as an incentive to buy other things. Very odd possibilities and I'm not at all sure about how I feel about it.
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Amazon Charging Different Prices for Same Items? More

Amazon Charging Different Prices for Same Items?

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  • While your non-marketeer logic sounds good, effective, and frequent-customer friendly, the opposite is actually the case. Print catalogs have had a long practice of raising prices for regular customers because their market research proves that people still think they are getting the best deal because of that first purchase. J. Crew and L.L.Bean are probably the best catalogs to test this with since regular customers get a new catalog every two months or so, and cold mailings go out to mailing listed potential customers at least twice a year

    The company assumes (and their research proves this), that customers are driven to them because of past experience and future expectations of value. Therefore, a regular customer is less likely to shop around for a better deal, because they got great deals the first few times they shopped using that catalog.

    Furthermore, catalog companies often have two or more catalogs per season. These will look the same, and many of the prices are the same, but the 'regular' customers mysteriously get the catalog with the higher prices. The logic is that they are already hooked, as I said before, because of prior experience and prices.

    If you are a packrat like me, you can check catalog prices. I bought a bunch of stuff from J Crew, the next mailing the prices on many things were slightly-to-considerably higher than the original catalog I had ordered from (same season), my wife (different last name) recieved the same seasons catalog (cold mailing) whose prices were the same as the original catalog I had ordered from.
  • Actually, every grocery store membership I've seen does indeed change the price at the register. I know here in Texas, for instance, Randall's (now part of the giant Safeway) Remarkable Ripoff-protection-racket card is required to avoid paying *way* too much at the register (fortunately, thier main competitor here, HEB, doesn't play such games, so they get our grocery $$.)

    It's not even the profiling I object to (since there's really no way to avoid it anymore anyway, unless you always pay with actual green cash) so much as the attitude that "you must play our game or we'll make you pay through the nose".

    This is really the whole point of affinity-group marketing: the price one customer pays for a given product may be different from the price paid by the next customer. The big products companies are using these sorts of systems to target products at particular demographic segments that may be eligible for a discount negotiated though professional organization (say, doctors) or to influence the buying habits of first-time moms with a new baby.

  • Re:More /. Amazon-bashing (Score:5)

    by StoryMan ( 130421 ) on Wednesday September 06, 2000 @07:15AM (#801067)
    I can go into Border's and receive 10% off any book because I'm a teacher. I have a card that identifies me as such.

    A woman in line in front of me bought Elmore Leonard's "Pagan Babies" for the sale price. I bought "Pagan Babies" for sale price less 10 %. We got different prices on the same day for the same book purely based on some arbritrary criteria.

    Another example: I go into Seattle's Best Coffee. A man in front of me gets a latte for list price. I go in, plunk down my frequent buyer's card, get the latte for free because I've bought ten lattes.

    Same day, same item, same clerk, different prices.

    Since we don't know Amazon's criteria, I'm not sure we can accuse them of discriminating against certian *people*, right? I mean, I've bought a lot of stuff at Amazon, and over the past few days as I've been following this story, I've noticed that I'm received the lowest prices for all the DVDs that they're listing.

    They're not lowering the prices because my hair is brown, my eyes are blue, and I write left-handed, right?

    They're not lowering it because I'm a democrat and I think the Shrub (Bush) is a dumb, loud-mouthed boor.

    They're lowering the price based on whatever information I've given them, my ordered habits over the years, and the books (and DVDs) that I've ordered in the past.

    Obviously, they've got some sort of criteria that they've established -- repeat customers, money spent over the past year, orders over the last month, whatever -- and they're applying it to me.

    Or maybe they're setting random prices and seeing if it's enough to "catch" me based on my demographic.

    Whatever.

    But I know that I take one look at the list price, one look at the sale price, and make my decision there. If the sale price is too close to the list price, I won't buy it, period.

    If the sale price is 30, 40% of the list price, I'll probably buy it.

    I think the issue here isn't that they're doing it -- charging less for some customers, more for others -- but that we don't *know* the criteria.

    And of course because we're all good little paranoid Pynchonians (see 'The Crying of Lot 49' or 'Gravity's Rainbow' to see what I mean) we suspect the worst -- that not only are they screwing us and fucking with our privacy -- they're also fucking with our heads.

    Bad Amazon! Bad! Bad! Bad!
  • Simply point out to the NCAA that some student atheletes are getting special discounts because they are coming from an EDU or some such silliness and Amazon will be taken through the ringer. Look what's happening to the guy who gives discounts to everyone at a shoe store in Wisconsin. Gave the same discounts to atheletes and now WI is in prohbation. Think about it.
  • And then the store that just give you their lowest price will get the sales because it's easier to just shop there?
    --
  • Imagine I buy a lot of Anime DVDs. They could note this, and raise the prices by a buck or something.

    Or, they could notice that you buy a lot of Anime DVDs and *gasp* lower the price by a buck or two to get your valuable business. Why must we always assume the worst about everything?

    I tend not to do real-time price shopping on items like this: I looked at a dozen online stores when I started purchasing, and I settled on the one that had the features & prices I want. But 2 months later they could jack the prices and it would be months before I noticed.

    That's one of the worst ways to shop online I've ever heard of. First, decide on what you want. Then, find the lowest price from a reputable dealer and buy it there. Try this: pricewatch.com [pricewatch.com]
    --

  • If you read anything regarding this situation, you'd see that Amazon is not a monopoly. While it is true that under a monopoly, consumer prices are higher, that's not the reason behind this case. What they're doing is determining to what extent someone who has a strong preference for a particular product is insensitive to price increases.

  • There are two fundamentally differences between one-to-many marketing (and pricing) and one-to-one marketing (and pricing).

    The first is that one-to-many marketing uses statistical data (think insurance) for determining appropriate price or discount. While one-to-one may use individual buying patterns, browsing patterns, neighborhood or regional criteria, and survey data such as household income. I have taken at least one survey at Amazon.com. Although the information is only as accurate as I want it to be.

    The second difference is that collusion can now occur at the individual level. Just last week there was an article [slashdot.org] on slashdot about Amazon.com planning on selling their customer data. When other retailers discover that you are price-insensitive at Amazon.com you may discover you are paying list price regardless of where you shop! Of course, the government will not allow Amazon.com to sell their data directly to their competitors but other channels (i.e. information resellers) will emerge.


  • On a related note, Amazon apparently lied to users when they said that users could be removed from the customer database.

    Several months ago I opted to take part in the boycott against Amazon because of their patent stances. I had been a long-time and frequent customer to that point, so I sent a note to their customer service address explaining my position and asking to be deleted. One of their people responded very politely with an explanation of their position on the patent issue. We traded several emails discussing the point. Obviously my position did not change, and the customer service representative agreed to delete my records.

    I recently received an email notification from them regarding their change in policy making customer data a saleable asset. This makes it obvious that I was not, in fact, deleted from their database. While they may have "closed" my account to make it inaccessible, they retain my data as an asset.

    Bad Bezos, no donut.

  • One of the ultimate mecas of retail is to charge every customer a different price, and that price is - whatever the maximum they are willing to pay. You can see stores doing this with "customer loyality" cards too. They'll charge outrageous prices, that is, unless you use their card which will bring you down to normal levels. At that point, they carefully record all the purchases and buying habbits you make and will price and discount stuff that they figure you wouldn't have bought otherwise. They also target you heavially to fufill their dream of the ultimate marketing mecca - to be able to target every individual customer with a custom made pitch designed to lure the max in purchases out of them that they are willing to pay. It's sorta cute, but you're rather stupid if you play their game, information technology put's the power in your court - not theirs. If you're always jumping through their hoops you're never going to realize that it is they who should be jumping through your hoops. You should realize that the same technology that allows them to pigeon hole you so well, also allows you to bypass them totally and leave them out of the loop. Orginisations like "Mercata" are one example "Priceline" another, ebay another, and there are a lot of barter and exchange sites on the web where if you do it right you could get a $1000 worth of furniture, someone else could get $1000 worth of computer programming from you - so both of you got $1000 of worth that each of you didn't have before and the IRS is none the wiser. This is what the internet's all about.
  • Now I don't even have to leave Amazon to do my price comparison
    shopping! Just view the site with different browsers and cookies, [computerworld.com]
    and see what kind of deals you can get!

    Does this mean we can figure out Amazon's 'pricing scheme' to rip them off?
  • I disagree. Most people who use comparison sites already know that Amazon will not likely have the best price.

    Also, its important to understand that there are two significantly different methods comparison sites use to obtain prices. Sites such as BestBookBuys [bestbookbuys.com] perform a real-time search, and are therefore going to be the most accurate. Other comparison sites, like shopping.com, or mysimon.com compile records daily, and are not real-time searches. Their data is more likely to be incorrect, however since it is all in their own database, you get a faster comparison.

    Real time searches should not be affected too much. Amazon is likely to be taken off of these if the real time search doesn't match their price. It won't matter a whole lot if that happens because people who comparison shop for prices already know the best price is not going to be from amazon.com.

    If amazon.com doesn't work well with comparison sites its their loss. Amazon's biggest mistake is that their business plan calls for them to dominate selling on the web. That part of their plan is backfiring as more and more businesses are figuring out how to play the web game. We will end up with a great variety of stores to choose from, and consenquently, sites that analyse the great variety of choices will be popular.

    Comparison sites are here to stay. If Amazon refuses to cooperate with them, oh well. There are always the 100 or so other stores in any given category that a comparison shopper can choose from.

  • Okay, who here actually likes what the airlines do - gouging customers they think have some additional willingness to pay? They get away with it because they have monopoly or oligopoly control of their routes. They also play very carefully with fare rules and so on to avoid antitrust prosecution for price discrimination.

    The good news is that Amazon doesn't have this kind of market power, and it probably won't, because the barriers to entry to this business are fairly low. But if they do get sufficient market power, then they may need to get scrutinized, unfortunate as that may be.

    It's really too bad, if you think about it, that vendors keep pushing the limits of fair play. It's just like privacy practices - it's as if they want the heavy hand of the Feds cracking down on them.

    sulli

  • News.com link (Score:4)

    by davidu ( 18 ) on Wednesday September 06, 2000 @06:13AM (#801096) Homepage Journal


    News.Com has a story on it -- a little more depth. [cnet.com]


    -Davidu
  • Back in the old days (1998), it was considered easy to manually, personally go to different websites. Man, look how we have progressed.

    I wonder if my wooden shoes still fit?
  • I'm not saying that we should go back to the days of the Civil Aeronautics Board handing out routes - far from it. But I AM saying that a lack of competition causes gouging - when was the last time you were gouged on a route flown by Southwest? - and this is a Bad Thing.

    As for pricing, try flying last-minute on a non-competitive route (e.g. to a funeral in Charlotte or MSP) and then think again about airline pricing policies. They'll take every chance they can to screw you.

    Back to Amazon: there's lots of competition, so we can just take our business elsewhere. [thinkgeek.com]

    sulli

  • As for pricing, try flying last-minute on a non-competitive route (e.g. to a funeral in Charlotte or MSP) and then think again about airline pricing policies. They'll take every chance they can to screw you.

    Prices are higher at the last minute since most last minute travellers are business people who have little sensitivity to prices in these cases. I don't really know if you call that screwing someone or not.

    BTW... most airlines will offer you a berevement fare if you are flying to a funeral on short notice... you usually just have to provide a copy of the funeral notice or something similar... you can get a last minute ticket for the 21 day advance price.
  • In the article they mention that the price difference they saw was evident when they made the first request with Netscape (cheaper) and the second with Internet Explorer. Is it possible that one of the criteria Amazon are using in their pricing decisions is what browser you are using?

    Like Netscape users are cheap-skates? 'I bought this browser in 1996 and it still works, I'm not gonna buy another one dammit!' etc. Or maybe they assume that if you use Netscape you probably run Linux (yeah I know that its available from the User-Agent header, but if you had to dual boot, you might use Netscape when you were in Windows too for consistency), and maybe they think that if don't pay for software, you're not likely to buy a DVD if it costs a lot?
  • Brick-and-mortar stores don't usually do it on a customer-by-customer basis though (because it would damn near impossible, esp. with posted prices on the products on the shelves).
  • Sigh. Look, I'll make it easy. This post [slashdot.org] describes an example of what I'm talking about. Same company, same state, different prices "for research". Happens all the time.
  • They're lowering the price based on whatever information I've given them, my ordered habits over the years, and the books (and DVDs) that I've ordered in the past.

    You would hope so, but the point, as you mentioned, is that we don't know what criteria they're using. Maybe they are charging you higher prices because of your political views, or your taste in music. Both of these, and other attributes, can be guessed with varying degrees of accuracy from your past purchases. Now it probably isn't happening because it doesn't make commercial sense to do so (although it's possible -- here in the UK at least, those leaning to the politic right tend to have a higher disposable income than other, and so would probably worry less about paying slightly more). The point is, we just don't know.

  • Counter-strategy? (Score:3)

    by mOdQuArK! ( 87332 ) on Wednesday September 06, 2000 @08:50AM (#801118)
    Would it be possible for an auto-shopper agent looking for a particular item to log onto a company like Amazon.com's as many different individuals, pick the best price offered & buy that?
  • I work for an independent online bookstore, Page One [page1book.com]. We have a profitable internet business, and the majority of our customers have found us through comparison sites that we partner with. We have never spent money on internet advertising, so partner sites are very important to us.

    Personally, I welcome Amazon not working with comparison sites. It will be their loss. There are already over 50 other bookstores that are set up to sell books online. If one single company decides it doesn't want to be compared with the rest, it wont have a great effect on comparison searches.

    Folks, there are a great variety of stores out there to choose from. The internet lends itself to variety, not monopolies that dominate an entire area of business. If one company decides to go against the nature of the internet(which lends itself perfectly to lots of businesses and comparison shopping) they are only going to be hurting themselves.

  • That's an interesting issue. It's not clear that a customer can raise this issue, although a competitor could. See a summary of the Robinson-Pattman act. [businesslaws.com]

    California has state law in this area, but I haven't looked it up.

    The next step, I suppose, is a browser plug-in that generates a range of different situations involving cookies, browser type, and previous page viewed to see what prices come back.

  • Don't be a sucker. (Score:5)

    by Malcontent ( 40834 ) on Wednesday September 06, 2000 @10:34AM (#801127)
    You missed the most important point. If Amazon tags you as a sucker (person willing to pay more then they have to) then they will most likely sell sucker lists to other e-tailers. You will then start paying more for everything on the internet and not even know it! Mail order companies already do this. They compile lists of people who buy stupid useless stuff (nose hair clippers for one) and sell it to each other. In fact they have "indicator items" (the aformentioned clippers) that they use to flag people as suckers.

    It's kind of a stupidity tax really. Browse with cookies on, pledge loyalty to a corporation or a brand and pay more.

    A Dick and a Bush .. You know somebody's gonna get screwed.

  • Your example quote shows exactly why this is a Good Idea for companies. Most companies are in business to make money. This sounds like the perfect tool for companies.

    If you don't like it, then shop elsewhere.

  • This is absolutely not normal business practice in retail stores. The issue here is not that Amazon is analyzing the buying patterns of consumers in the aggregate and changing prices based on this information. The problem is that they are using some secret criteria to charge people different prices as individuals.

    So you are saying this is exactly like buying a car from a car dealership?


    (-1 Troll)
  • I got a unique browser cookie from the Neiman-Marcus e-com server, which is supposed to automatically fool online retailers into giving me their best price.

    Well, actually I just got the recipe from them. Only cost me $200, haven't tried it yet.

    Don't spread this around.

  • Re:it's revenue management - think airlines (Score:5)

    by TheNightOwl ( 206911 ) on Wednesday September 06, 2000 @07:44AM (#801142)
    The airlines and hotels alter their pricing because they have a "perishable" product. An unsold airline seat becomes worthless as soon as the plane takes off. They call it yield management. They alter the price as it gets closer to the expiration date, in order to maximize their revenue.

    The technique being used by Amazon is actually quite different, since books and CDs are not perishable. Amazon is altering the price based on who is doing the buying. If they know you are a loyal Amazon customer, they may charge you more because they think they can get away with it. If they know you are a price shopper, they may charge you less, because they think it is the only way they will get your business.

    Auto dealers take a similar approach. If you are a loyal customer of XYZ dealership, you will pay more for a car, because that dealer knows you prefer to buy from them.. There is also research that shows women and minorities pay more for cars, apparently because the dealerships (on average) feel that women and minorities (on average) have less bargaining power. Essentially they are taking a profile of what they know about you (previous customer) or what they assume about you (male/female; white/black/brown/tan) and using that profile to adjust their pricing.

    What is happening with online shopping is even more insidious. Because online retailers have the ability to create detailed profiles and automatically adjust the prices accordingly, they can really take advantage of the situation. The unfortunate thing is that loyal customers will often get the worst deal.

    This is not that uncommon. For example, I think priceline.com does the same thing. The first time a new customer makes a "bid" on a plane ticket, they will usually "win" it. This creates goodwill (loyalty?) on the part of the customer. After that, Priceline will alter their acceptance/rejection of that customer's bids, to determine how price sensitive the customer is. Their subsequent pricing will take advantage of that information. This is not traditional yield management (Priceline does not own the commodity, so from their perspective the commodity is not perishable), rather it is profile-based price management.

    So how can consumers protect themselves? The most important thing is to minimize the amount of information a retailer has about you. The less a seller knows about you the better. This is because companies that use profile-based pricing will almost always offer a "new" customer the best deal in the hopes of gaining your trust (so you will hopefully become a "loyal" customer and they increase their pricing and profit later).

    Other things consumers can do:
    (1) Do not patronize companies that practice this approach.
    (2) Publicly condemn companies that take this approach
    (3) Utilize price comparison services
    (4) Be ruthless about price shopping
    (5) Do not become loyal to a single retailer
    (6) Shop as anonymously as possible
    (6) Just say no

  • Plus, how do they identify you to give you that different price? With a cookie on your hard drive! So, delete it. Hell, save a backup copy if you want.

    Now go back to amazon as a new user. Are the newbie prices on your favorite items higher, or lower? My guess is your personalized prices will always be lower, because you're a good customer and they want you to come back.

    If not, if they've been gouging you, sign up as a new user, get the good price, and send the evidence of rip-off to slashdot as a tell-all expose :)

  • Most major airlines will guarantee you that, when you call or go to their website, they are offering you the best price available for a given travel date, destination, class of service, restrictions, etc... It sounds like Amazon is simultaneously offering different prices to different people based on aspects of their "electronic persona" that have nothing to do with the level or type of "service" received or volume of business they are doing. This seems inherently unfair, and seems like a stupid move to me, based on the amount of negative publicity it will generate.

    Online retailers do have the capability to "personalize" pricing, and doing things like offering additional discounts to regular purchasers based on a structured, frequent flyer-like programs would be a great way to enhance customer loyalty. But there really needs to be a comparable "best price first" guarantee that you're not paying more for an item based on inconsequential factors.
  • You know you're so angry in both those posts I'm not sure if we agree or not. `;^)
  • I've seen this with Dell as well. We're a Dell major account customer, but up to this time I've never bought anything from Dell. I was planning on buying a 2U server and was browsing Dell's site looking at the 2450. I spec'd one out and printed the specs on Friday. On Monday I got the company's corporate login for Dell and repriced the same server and LO AND BEHOLD the price went up nearly $1000!

    I expect computer stuff to fluctuate (RAM, disks, and CPUs seem to be subject to production constraints and high demand lately) a little, but $1000 over a weekend just seemed wrong. I checked on Dell's consumer site (same machine, natch, I didn't think of them tracking me with a cookie) and the price was the same.

    I thought it was really odd, but pity for Dell, they lost the sale to HP after jacking their price on me. After reading this, I'm sure I was the victim of "selective selling". By seeing me as a corporate customer they'd been making money off of they were plenty willing to try to steal from me. I'm glad they didn't.

    In retrospect, I kind of wish I would have called the Dell rep to ask WTF was going on with a $1k price jump in 72 hours, but I liked the HP guy better and just blew it off. I suspect that I would have gotten a different, third price from a real person with some room for bargaining.

  • Do you think that means they'll start making a profit?
    --
  • I looked high and low on their site, trying to determine how to erase my (long unused) account. Finally, I had to e-mail them, and they got back to me yesterday. To remove your account, simply e-mail:

    account-close@amazon.com [mailto]

    There were no further instructions, so I assume that the removal is done manually by an Amazonling. I used this:

    To Whom It May Concern,

    Please remove my account from your system. I haven't purchased anything
    from you since your 1-click & referral patents, but now that you've modified
    your privacy statement to permit the sale of my private information, it's
    time to remove my account. Please remove any data that you have under
    waldo@waldo.net and waldo@munkandphyber.com, and notify me when you have
    done so. Thank you.

    Sincerely,
    Waldo L. Jaquith


    I guess that's sufficient. I encourage all of you to close your accounts, though you'd do well to cite today's news in addition to the modification of their privacy statement.

    -Waldo

    -------------------

  • The catalogs are not postcode separated. I know this because we get a list of addresses, in a particular location. These span multiple postcodes, and the whole range of areas, right from really scummy parts up to veritable mansion houses.

    The catalogs were then collected from large pallets of catalogs stacked at one side, and one delivered per address.

    Each catalog did _not_ have a specifc address.

    There was no way of making certain catalogs targeted to certain area. [0]

    [0] There _were_ differnt catalogs target at different markets, but that's very different from the topic at hand.
  • Different prices for different people have existed forever. Frequent shopper cards, Buy x Get y free discounts, sales, special handshakes, etc.

    Amazon isn't doing anything new, in fact, they're not even the first to do dynamic pricing on the Internet. However, their investors are pissed that Amazon is _still_ losing money, and they haven't had any PR for a while.

    Thus, the new pricing schemes. How many people have already gone to Amazon.com to see if they qualify for a low price? How many of those people bought stuff because they felt 3l33t with their "lower" prices?

    This is simply another cheesy ploy by Amazon, pity the fools who fell for it :)
  • This has been done by many people before. Victorias Secret Catalog has done this for years. They ask for a catalog code when you call in. That lets them know which price they should charge. They do this for marketing purposes to see how much they can charge the consumer for.

    They are just trying to maximize revenue. If they find out they can sell it for 20% more and loose 1% of the sales, they will. They are searching for the most profitable price.
    --
    Mike Mangino
    Sr. Software Engineer, SubmitOrder.com

  • Re:Nothing new here (Score:3)

    by DarkMan ( 32280 ) on Wednesday September 06, 2000 @07:52AM (#801162) Journal
    Not in the UK

    In the UK the major home shopping catalouge firms are all part of the Littlewoods group (Though not all).

    A summer job as a delivery driver for that group demonstrates quite clearly that the catalouges are all the same.
  • Yeah, it could gather up all the cookies it gets, save the one with the best price, and post it to a web site.
    --
  • ...link to noamazon.com [noamazon.com] to find other places to buy your books, CDs, DVDs, etc.

    --

  • They also get the ability to change flight details *without penalty* as a bonus for that higher fare, so if something unexpected pops up, it can be dealt with.

    Try doing that on your $99 fare.

  • I would think that the number of people who *didn't* buy the product would be very important. You could make a graph showing "50% of the people shown price X bought the product, 35% of the people shown price Y bought it, and 75% of the people shown price Z bought it." If an unknown number of people visit the site with no intention of buying anything, it throws those numbers off. If you don't record the non-buyers, all you can say is "30% of the people who bought the product paid price X, 25% paid price Y, and 45% paid price Z." I havn't taken econ since high school, but the first one seems much more valuable to me.

    -B
  • You really think they're gonna raise the price if you buy a lot? Think again... Think 'bulk purchase'.

    The logical and commercially viable solution here is to lower the price when you buy a lot, because they want to maintain that customer loyalty if it means you're a good buyer. Same way it works with everything else... Buy 1, it's a given price; buy 100, it's a lot cheaper per unit.

    I suspect you guys will whine a lot less if this kind of data collection means you'll save on your little anime DVDs, huh?

  • If you have your cookies turned off and never "log in" until you go to checkout, how can they possibly track you? It would be pretty stupid to let the customer see one price and then have it change when they go to pay. Just visit Amazon with cookies disabled, and keep your eyes open.

    ---------///----------
    All generalizations are false.

  • Great response! I'm amazed by all the whiny hand-wringing here that "someone out there may have gotten a better deal than I did, and it's not faaaaair!" - just like a three year old.

    We each strike our own bargains and have no right to complain later just because someone may have gotten a slightly better deal.

    That last verse (15) should really be taken to heart by the crowd here.
  • Ever heard of Deja.com? Well, the other thing we do besides Usenet is comparison shopping for all sorts of products. It's fairly objective and useful. Most of the merchants did NOT pay to be listed on our site. The ones that did are clearly marked as 'preferred merchants' in yellow.

    For instance, here are 14+ different choices for buying The Matrix on DVD [deja.com] sorted by price.

    We're continually adding new merchants and product categories all the time. That's my job actually. In fact, if you know of any good DVD merchants (or any other good web merchants actually) feel free to send suggestions to me in email (see above) and I will look at putting them on our site. (Note that not every web merchant will be able to be listed -- if they have really crappy inconsistent HTML and/or don't list enough identifying information on their pages, it won't work. Perl regexp's are neat but not magical ;-))

  • Maybe it's annoying that one has to write a perl script to harvest cookies when they could have given us their minimum price in the first place. In general, it makes shopping more time consuming, that's all.
    --
  • I have .. "friends" .. that are loyal customers of such retailers. They work the same way MS does for its software. They make the entrance easy (cheap upgrades, easy file import, etc) but make leaving extremely hard (incompatibility with standards, shitty file export, etc.)

    The first hit is free, after that, the price jacks up. What they do with quantity or more likely cutting the stuff is probably as constant as the price hike. First high-quality free hit to get you hooked, perhaps a few more good quality ones at a given price $n, and then quality-- and n++.

    But at some point quality and n become constant as they've hit market values. Drug dealers don't have a monopoly over you, just usually the drug.

    Don't you love capitalism? It even keeps the drug dealers honest!! :-)

    --

  • I recently spent $ 191 at amazon.com and they gave me the lower price on the Men in Black DVD.

    However, they messed up my $191 order - they sent it late and one of the items they sent was the wrong one. I don't really want to complain since it's not worth the trouble of shipping it back, but I doubt I'll buy from them again.

    D

    ----
  • I do not get it. This is normal practice for normal non-online stores. They analyse customer demand all the time. Some of them have evn gone as far as analyzing customer in store movement using IR cameras. Why do you expect Amazon to behave differently. Just because it is online?
    Gimme a break ;-) They are just doing business the way everyone else does. A bit more efficiently though as they do not need IR cameras to track customer movements.
  • amazon doens't have your credit card number of type or name while you're filling your shopping cart, only afterwards when you sign in your info or use a previously entered profile. or rather, the only way amazon can have a clue who you are is with cookies from previous sessions. so rename your cookie file and try again; if you get a better deal, great; if you get a worse one, you can always put your cookies back.
  • I don't know if I can full-heartedly agree with your assessment, especially with your recommendations.

    A business is not doing anyone a favor if it does not maximize it's profits. It cannot continue to offer you a service, it cannot continue to survive and feed/pay itself, it cannot gain prestive, position, rank, or brand, if it cannot stay in business.

    What is *wrong* with different prices for different buyers? I'm not saying more or less, but under what premise is equality of prices a guarantee? If you don't want to pay *more*, then go buy somewhere else. If you don't want to pay *less*, then there must be something wrong with you, I think.

    As per the price fluctiations, there are several 'arguments' for. There is no real value assigned to, say, a book. It's value is only whatever a person is willing to pay for it. If that's 25, 26, 28, or 30, that's the 'price'. If you find it for 30, but want to pay 25, then you aren't going to buy it, and they won't sell it. If, however, they will sell it for 25, but you're willing to pay 30, they would be *stupid* for charging less.

    Amazon, with this practice, can maximize profits. That's not wrong.

    Another issue I can think of is the 'perishability' of their goods. Anything that sits in their warehouse over a certain amount of time is, essentially, a loss. Books that get printed every quarter, year, or even week; the circulation of books, like the circulation of money, is how they make a profit. If they sell 2000 books a month, and get 2000 books in every month, they have 0 inventory, and profit on 2000 books. If they sell 200 books a month, and get 200 books a month, they still have 0 inventory, but only profit on 200 books. It's to their advantage to maintain 0 inventory, before the next shipment comes in, and if that means lowering prices, well, then, it's certainly in their advantage.

    As to raising prices, one can *always* go somewhere else. But the assumption is that you're paying money to Amazon to keep them alive. Brand loyalty means you like them, for whatever reason, and if you want them to suceed, you buy from them over, say B&N. If you have no loyalty, then it doesn't matter anyway. Which means you pay a brand tax; and, if they are smart, they use that profit to do something good, to ensure current and new buyers *prefer* Amazon over B&N. If they do something stupid or pointless, or irritating, customers can always leave.

    The nick is a joke! Really!

  • it's revenue management - think airlines (Score:4)

    by evan1l38 ( 73680 ) on Wednesday September 06, 2000 @06:17AM (#801200)
    This sounds like what airlines and hotels do constantly to maximize revenue. You don't even expect to pay what anyone else on your flight or in your hotel paid anymore. It's the same idea applied to a new area. I would expect to see a lot more of this kind of thing in the future, actually. Setting your prices to your target audience is really a good idea for the companies doing the selling - and as a buyer, if you don't like it, remember how easy it is to comparison shop on the web!

    Evan Reynolds evanthx@hotmail.com

  • As others have noted, there is nothing particularly newsworthy about this. It has been done in all forms of retail forever. In some extremes it is pernicious and illegal. In other cases it is smart retailing. And .com retailers are getting more and more sophisticated about doing this as the industry matures and as tools are developed to support it.

    It's sometimes called beha vioural marketing [ey.com]. It's also called knowing your customer. Supporting this kind of marketing is a burgeoning business for a lot of web companies. The idea is that you track what happens on your site via web, db, phone logs. You segment your visitors according to criteria you make up or you discern from your logs. Aand you devise promotions and marketing programs to attract and retain the customers you really want, and help them get beyond shopping to buying. Duh.

    Amazon is not alone in pursuing this strategy. And the article offers almost devoid of factual data on the particulars of Amazon's program. If you want to boycott Amazon, go ahead. They won't care - unless you spend lots of time browsing but never buying. But doing it as a result of this non-information is pretty foolish.

  • This is absolutely not normal business practice in retail stores ...The problem is that they are using some secret criteria to charge people different prices as individuals.

    Ummmm ... that's pretty standard practice in most areas of the world, actually. Hell, even here it is. For any large expense at a retail store, I'll find whoever has authority to cut a deal and I'll cut a deal with them. As long as you can convince them it won't get out, pretty much anybody prefers cash in hand to inventory on the shelf, lowered profit or not.

    If I can size up the store and try to chew them down, what on earth is wrong with vice versa?

    The way you phrase this, it sounds like you pay label price on everything you buy. You're kidding, right? Are there REALLY people that dumb in the world? :)
  • In the old days, the main way that Barnes and Noble sold books was by the B+N catalog (and if you ever bought from them...you would likely still have a couple dozen hidden in your house somewhere.) The B+N catalog had differential pricing in it, in order to purchase an item from them, you had to give them your catalog number. I noticed that the catalogs I would get would have different prices in them from the catalogs my father got, although they did look the same.

    Several years ago I was watching...uhh...think it was Montel, as I was flipping through the channels. They had some consumer expert come on and talk about differential pricing in Victoria's Secret catalogs. It wasn't making a big difference unless you spent a huge sum of money. They had this weird example of how one person would save $100 if she bought $500 worth of clothing from one catalog instead of another.

    What's deeply funny to me is the way that they scandalized such a good, family, American institution like Victoria's Secret. And I don't care how much lingerie someone owns, they likely do not buy that much of it.
  • Ever wonder why your friend gets a lot more calls from credit card companies then you do? (Obviously I don't know you I'm just making an example)

    Phew, I was worried for a moment there - I thought you were monitoring me!

  • The name of the game seems to be comparison shopping. Why hasn't anyone started a service on the web that, for a small fee (or advertising revenue) will find you the best possible price on the web (given your profile, which would be independently tracked by this service)? I know services like pricescan and streetprices are available, but they are limited and don't take advantage of any customization, the use by retailers of which people are freaking out about.

    I think this "two-click" approach would work - one click for the best price, another to buy. It would hopefully end up being a web middleman that would be worth using if it consistently got you lower prices.
  • Bricks and mortar stores do this all the time, from store to store, week to week or region to region. The only reason you notice is on Amazon is that it's easy to compare, what with price-finding bots and discussion boards. It's not unethical, or even unusual. Indeed, it's optimal, because it finds the pricing sweet-spot that both encourages consumer purchasing and keeps Amazon in business. This is called efficient capitalism, and that's what e-commerce was supposed to be all about.

  • If you buy a bunch of anime, you might look for the best price to start with. You show up and buy 2 at that price. You show up 2 weeks later and buy 3 more. They think "Hey, he's an anime junkie, and he's a creature of habit. We'll raise the prices $0.50 each visit, and see how long it takes him to notice!"

    Sure, it would be possible to offer discounts for bulk purchases... but that's not guarantee that Amazon will do it. It's all about psycology, I guess. :)

    ---

  • I shop at Amazon alot. I buy several books and the odd dvd or piece of consumer electronics. In my experience, Amazon's prices have been quite reasonable; rarely the cheapest, usually in the middle of the pack. The reason I shop at Amazon is that I recieve consistent prompt and correct shipping and good customer service when something goes wrong. Amazon's expert systems also tend to suggest items that I actually want; it is like having access to a dedicated account rep without all the bs. I have also recieved almost $100 in gift certificates and coupons from Amazon in the last three months, which keeps me coming back as well. I am a busy person, and try to fit some sort of life into my hectic schedule. I do not have the time to visit pricewatch or fifty web sites to save $5 on a book which may not arrive promptly or be subject to stiff restocking fees. As far as your car dealership analogy goes, all I can say is that you get what you deserve. If twenty people are looking at 10 PT Crusiers, nobody is going to pay less than invoice. Simple supply and demand. If you want a good deal on a car, leave your conspiracy theories at home and buy a one or two year old car, where the original owner (aka sucker) took the 40% depreciation hit or buy a car that isn't the 'hottest' model in the showroom. Women and minorities are ripped off in stores and car dealerships because (for the most part)they want the 'peace of mind' of a new car or fall for the extended warranty ripoff. That is how companies like Kia and Hyundai sell cars; suckers get their 'new' car, dealers make big profits on overpriced spare parts and labor.

  • An omen of things to come? (Score:5)

    by Stan Chesnutt ( 2253 ) on Wednesday September 06, 2000 @06:17AM (#801219) Homepage
    With services such as Priceline and EBay, we've seen the ability for buyers and sellers to come to a private agreement about pricing.

    Perhaps fixed prices are a thing of the past, a relic of the old ways of doing business. Fixed prices are certainly needed at old-style bricks-and-mortar retail establishments (so the customer can quickly view the price while examining an item) but really aren't required online, where the webserver software can issue a different pricetag for each viewer.

    In the future Retail Online Hell, massive server databases will track our every choice, become aware of our every weakness, and know what "must-have" preferences each of us has.

    The result: I'll be charged top dollar for things like DVDs, and offered astonishingly cheap prices for, say, scented candles.

  • You need to pull your head out of the sand here, and realize, that, *any* company, that performs "testing" of this nature, without being forthcoming, either upfront, or when confronted, needs to be taken to task. Period.


    Why?

    The equation is very simple. Is product X worth Y? If yes, buy it, if not, don't. The rest of this is much ado about nothing.
  • We all know that the seller maximises profit at the intersection of supply/demand vs price curves (elasticity is the slope of the curve). However, for any given price, there are people who are paying "too little". They would gladly pay more for the same product.

    But there are also people who will "walk away". And the company would probably rather may a 50c profit than not make the $1 they were originally hoping for.

    Of course, this brings us nicely back to the RIAA where people who are walking away are walking away to Napster. If the record companies lowered their prices, they would probably get a lot of these people to come back to purchasing but they may actually end up making less money because the hoards of Brittney fans would be paying slightly less each.

    What they can't seem to understand though is that even if they could shut Napster and friends down, those "walk aways" still won't walk back.

    Anyway, I digress...

    Rich

  • buy your DVDs from people who don't buy very many themselves.

    Cept by the the MPAA will have DVD playback conditionally linked to the consumer identifier chip implanted in your head.

    Rich

  • You don't know what to think of it? I do--it stinks.

    Can they do this? Sure. Is this common? Absolutely--it's been done for decades in the real world. Fast food chains are particularly bad for setting prices differently in different areas of a city. We call this "DEMOGRAPHIC PRICING," and the only think that Amazon has done differently is increasing the level of detail/granularity on which they can apply it. Instead of getting people based on their home or work district (and hence, their approximate income, job type, general lifestyle, etc.) they can do it by specific individual attributes.

    It could be used for good purposes, but in this case as in most, there's no profit in good behaviour. It's sleazy and wrong, and should encourage us customers to research _every_ purchase we make over some 'throwaway' threshold.

    Eventually this will jump up and bite the companies back. Continual comparison shopping and distrust of retailers means no brand/store loyalty, no sense of responsibility, and no loss when the companies die.

  • So what is acceptable discrimination?

    According to US federal law, (Civil rights act of 1964) you may not discriminte based on Race, Sex, Marital Status, Age, Religion, or National Origin. The ADA prohibits some forms of discrimination against discrimination against the disabled. And some act, the name of which escapes me at the moment, prohibits descrimination against military status / service.

    Other than that, you may discriminate for any reason your heart desires.
  • Prices are higher at the last minute since most last minute travellers are business people who have little sensitivity to prices in these cases. I don't really know if you call that screwing someone or not.

    Well, I do. It's screwing the business people, and their purchasing departments, as well as the casual last-minute travelers - not because the price reflects higher costs but because they can. Sure, costs are a little higher because there's a higher risk of unsold seats, but certainly not by a factor of 4 as is common on some transcon routes.

    Amazon is clearly trying to do the same thing, and for that reason alone I'm less willing to buy from them.

    sulli

  • Okay, who here actually likes what the airlines do - gouging customers they think have some additional willingness to pay?

    Airfares today are tons, tons, tons cheaper than they were before de-regulation of the airline industry.
  • If you read the DVD board, somebody said that while he was not logged in, with cookies disabled, and a netscape cache of maximum 0 size, Amazon fluctuated the prices up and then dropped them. There doesn't seem to be any reasonable criteria dependent on the person. Either random, or raising the price each time to "scare" people into buying it early before it goes higher.

    That's just plain dishonest. While you may have special discounts because you are a teacher or have some frequent customer program which has a written out set of rules, it is completely dishonest for a store, for instance, to randomly change prices on people who didn't even want to opt-in.
  • Nonono. The NM cookie is two-fifty.

    Rich

  • The practice of charging arbitrary prices based on how gullible a person seems has been around for ages -- just think of the last time (at least in the US) that you went looking for a car at a dealership. The only difference here is that it's impossible to haggle (unless you're willing to use different browsers, play with the cookies cached, and so on... average "Joe User" isn't going to do those things or even know that he should). While giving certain good customers discounts is good business practice, in this case these customers need to know that they've been selected for discounts, or else the entire effect is lost.

    ---
  • > So according to [Shotgun's] analogy with car sales and women, Amazon.com will charge more for something that an AOL user wants to buy as opposed to a Linux slut?

    No, spamazon.com will charge someone coming from aol.com more for "The Internet For Dummies" and less for "TCP/IP Network Administration", unless the User-Agent: says they're running a non-Microsoft box, in which case the price breaks will be inverted.

    In a conventional bookstore, you can't fine-tune the price in response to your customer's profile, because the customer is anonymous. On Spamazon, the customer profile can be used to gauge the likelihood that a customer will pay a premium for a product, and prices can be hiked accordingly.

    The goal is to maximize revenue from each market segment without telling any market segment what's going on.

    Think Al Gore "talkin' tha ebonics to tha homiez" when speaking to NAACP, and "taking the initiative in inventing the Internet" when speaking to whites.

    Spamazon.com speak with forked tongue. Tackhead no do business with.

  • Hmm. Perhaps in your country...
    in mine (canada) the price on the shelf is what they charge you at the register. If the computer says otherwise, you still get it for the price on the shelf.
  • I've never heard the expression "chew them down" for bargaining. Is it possible this is a cleaned-up "Jew them down"

    "chew" is a fairly common replacement for "talk" in rural BC where I grew up. As in "Whacha doin? Chewin' wit porges," y'know, eh? I'm quite sure it's just from that and has no anti-Semitic connotations whatsoever. It quite certainly wasn't used like that there ... there ARE no Jews in rural BC so there's nothing to be anti about -- local racism is reserved for Indians, er, First Nations people :)
  • Exactly, but since Amazon is an "evil patent company" people decide to get up in arms about it. And, lowering the price of an item to entice you into buying other things? Hello?!?! Blue light specials anyone? How about "Extra Value Meals"? Or "Buy one get one free"? This doesn't even warrant a news story.

  • Its the next logical step... (Score:3)

    by pq ( 42856 ) <rfc2324&yahoo,com> on Wednesday September 06, 2000 @06:21AM (#801266) Homepage
    Its always an information race, if you will, between buyers and sellers.

    The internet makes it a lot easier for the buyer to browse different prices, without having to pull out of the parking lot, drive to the next store, and find another parking spot. OTOH, it also makes it easier for the store to know what items you looked at and what you lingered over and what you put in your shopping cart before changing your mind - and they'd be fools not to use the information!

    Brings to mind the proverb, "Be careful what you wish for -- it might just be granted..."

  • From an economic standpoint, amazon are trying to get a handle on the price elasticity of their various goods, perhaps correctly reasoning that tried and true items like Planet of the Apes will be more elastic than hot-off-the-press X-Men (if it's even out yet).

    BUT! The normal supply/demand relationships implicitly assume an anonymous purchaser, so the elasticity is some aggregate measure. Of course, that isn't the case when you mix cookies into it (cue ominous strings)

    We all know that the seller maximises profit at the intersection of supply/demand vs price curves (elasticity is the slope of the curve). However, for any given price, there are people who are paying "too little". They would gladly pay more for the same product.

    If amazon could work demographics into the elasticity estimate -- and this is why they (and double-click) have been collecting info, not for advertising -- they can make better estimate on the maximum price that an individual would pay for the product.

    So what they are doing is trying to determine the price sensitivity to various products for various demographic clusters.

    I am absolutely amazed. If this is done on a cross industry basis (so instead of just books, also cars, airfare) this is consumer data that companies will kill for.

    Or buy amazon for, now that it is a sellable asset

    I'm actually really excited about this. It is soo neat. This is a great hack! Evil, despicable and all that too, but neat!

  • What Amazon (and other retailers) are really trying to achieve is to raise the cost of making an informed buying decision so much that you'll give in and pay a higher price or become part of some "discount program".

    And, yes, you are right: this isn't new to Internet-based sales. Phone companies and others have been doing it for years. That doesn't make it right.

    Efficient markets rely on orderly transactions. That's true in the stock market as well as in the consumer market. The more these kinds of practices take hold, the less transparent pricing becomes, the less efficient the market gets. And that's ultimately bad for the economy.

  • If they know you are price sensitive, presumedly they will not gouge you. I fail to see how a merchant having more information about your preferences can possibly hurt you in the long run.

    You know what price points you are willing to buy at, if the merchant steps out of those bounds don't buy. They'll figure out they messed up.

    And really this is just good old supply and demand at the microscopic level. Instead of gauging demand at the macroscopic level (orders are up 50% over last month) they are attempting to gauge demand on an individual basic. Very smart, and possibly very lucrative.

    Think about it this way. This allows the merchant to be much more flexible with pricing, not just to gouge you. In fact the opposite might be the case. You might be able to get a very good deal on a certain item because there are others who are willing to pay more for that same item, and you have already demonstrated your price sensitivity in this market segment (in the same way business travelers subsidize the discount airline seats).

    -josh

  • Re:it's revenue management - think airlines (Score:4)

    by Skim123 ( 3322 ) on Wednesday September 06, 2000 @01:24PM (#801280) Homepage
    It's nice to see a little sanity here, in your post. Most people act as if Amazon.com was forcing them to make purchases for insane amounts of money more than what others were paying. Folks, that's what capitalism is, an exchange of a good or service for money. The amount of the exchange is based upon two factors:

    • What the seller is willing to sell it for
    • What the buyer is willing to pay

    You have a very conscious effort in deciding if you will pay what Amazon.com asks! If you are not willing to buy it, don't, it's that simple. (See #6 above, Just Say No.)

  • Come on guys, they have a hard enough time actually making money, they have to try whatever it may take to hopefully eventually reach a break-even point. If you feel sorry for them, put up with their slight price fluctuations or send donations to Bezos. If you don't feel sorry for them, then just don't shop with them and let nature take its course, they'll be gone in a year or so if enough people refuse to shop there...
  • no, in the future, they'll take you're credit card number, look you up, see how much you spend total, figure out where your paycheck comes from, and what you're yearly income is, your mortgage value, and calculate how much you can afford to pay for a product.

    Then, possibly, they'll look up your name on internet chat-boards and newsgroups to see if you've ever been outspokenly critical of Amazon.com or any of it's affiliate businesses or suppliers, and tack on an "asshole-fee".

    Will it matter that you're making twice as much as your neighbor, Mr. Jones? How about when you pay $70 for the same DVD he pays $30 for?

    Welcome to the future.

    if it ain't broke, then fix it 'till it is!
  • Sellers traditionally give discounts to volume buyers because the transaction costs per unit are lower. That shouldn't make a big difference on the web.

  • Re:Fundamentally different (Score:3)

    by jafac ( 1449 ) on Wednesday September 06, 2000 @09:58AM (#801294) Homepage
    How about:

    Why do women get paid less for doing the same job as a man?

    Why do a pair of women's jeans (typically less raw material) cost 1.5-3 times as much as men's jeans?

    Why does an Acura Integra cost 1.5 times as much as the Honda Accord, a fairly identical car, the only meaningful difference being the sheet metal and name badge? (never mind the Cadillac Catera and the Chevy Cavalier!)

    Why does an audio cassette of an album cost $10, while the CD costs $18, even though the cassette costs about $2 to reproduce, and the CD about 5 cents?

    Why does a VW fan belt for an old beetle cost about 1/10 of what the SAME EXACT PART for a Porsche 356 cost?

    Things cost what stupid sheeple will pay for them.

    if it ain't broke, then fix it 'till it is!
  • They get profiling information based on archetypes and stereotypes, but they use profiling none-the-less. It may be based on gender, race, type of dress, accents, any other other perception that has taken hold over the years, and been reinforced in salesperson training.

    If they COULD get individual information on each person (and that day may be approaching, even if it a company that sells user info globally, and that can recognize faces using a hidden camera; or perhaps home in on the ubiquitous cell phone IDs everyone has, etc.) they would be even happier.

    But sales profiling is not new, and is well understood by those who employ it.
  • Don't even get me started on banking.

    Based on the money I have now (stock options) that I didn't have 5 years ago, the banks treat me like royalty now, they know me by name, etc. But it didn't use to be like this - I can bounce checks now, and they give me the benefit of the doubt for a day or two, but man, a few years ago, I could deposit money in the morning, write a check in the evening, bounce it, and rack up a buttload of fees.

    I'm tellin ya man, they FUCK you at the drive thru!

    if it ain't broke, then fix it 'till it is!

  • Jakob Nielsen says -- "Bad Idea" (Score:4)

    by watanabe ( 27967 ) on Wednesday September 06, 2000 @06:27AM (#801306)
    Jakob Nielsen has an essay [useit.com] on why differential pricing is a bad idea. Although this particular essay of his is fairly low on content, it's a good introduction to some user-centric ways to think about the web.

    example quote:

    It is also very easy to plot a product's price elasticity curve on the Web: randomly serve up pages with different prices to the first thousand users or so who visit a given product page and measure how many buy at each of the price points. With this information, profits can be maximized by multiplying the profit margins and their corresponding conversion rates and picking the price that comes out best.

  • Re:It's the other way around... (Score:3)

    by supernaut ( 35513 ) on Wednesday September 06, 2000 @06:29AM (#801314)
    You really think they're gonna raise the price if you buy a lot? Think again... Think 'bulk purchase'.

    The logical and commercially viable solution here is to lower the price when you buy a lot, because they want to maintain that customer loyalty if it means you're a good buyer. Same way it works with everything else... Buy 1, it's a given price; buy 100, it's a lot cheaper per unit.

    I suspect you guys will whine a lot less if this kind of data collection means you'll save on your little anime DVDs, huh?

    Sorry pal, your simplistic argument falls flat.

    Problem: Amazon has made no mention of this to their users. I doubt they would have mentioned it had it not been discovered.

    Problem: Amazon has been very ambigious in their answers to queries. This alone warrants suspicion.

    Problem: First time users are getting charged varibly. Both high and low. We know this based on the clean cookie tests which have been performed.

    Problem: It seems long time users may be getting charged more than even first time users.

    Problem: Logic dosent always apply to those who hold the purse strings. And, what may seem logical to you, may not be the case. Indeed, there are many cases where, it would be logical for a retailer to do something, yet does the exact opposite.

    You need to pull your head out of the sand here, and realize, that, *any* company, that performs "testing" of this nature, without being forthcoming, either upfront, or when confronted, needs to be taken to task. Period.

    I also fail to see how "We've learned that certain aspects of our site resonate with customers in different ways, and we are continually fine-tuning our site presentation to see how these variables affect customers' purchasing decisions," necissitates fluctuating prices. Unless they are testing a theory of "different looks may get someone to pay more", in which case, such a test should be contracted out, and done in a lab type of setting, and not with the general public.

    So, please, get a clue here. After their one-click BS, its fairly obvious that they seem to think they can control anything they want.

  • Compare Prices. (Score:3)

    by NetJunkie ( 56134 ) <jason.nashNO@SPAMgmail.com> on Wednesday September 06, 2000 @06:29AM (#801317)
    This is a non-issue. If you agree to a price when you buy something, the only person you can blame later is yourself. So what if they are doing price testing? Shop around. Show them you won't pay the higher price.

  • Fundamentally different (Score:3)

    by PhilHibbs ( 4537 ) <snarks@gmail.com> on Wednesday September 06, 2000 @06:31AM (#801322) Journal
    The basic difference is that in a regular shop, the same price is advertised to all. You know that they aren't preying on your buying habits. If you send your brother to get something, he'll be charged the same as you would have been. At a .com, it's like the shopkeeper takes a look at what kind of credit card you have and charges you more if it's a platinum. Which Amazon can do, 'cos they've seen your credit card.

  • sell your cookies! (Score:3)

    by Anonymous Coward on Wednesday September 06, 2000 @06:31AM (#801325)
    That could open up a new market on the net: cookie sales

    Be a 'good customer' at amazon, get them to lower their prices for you, and then sell your cookies. What is fun is that you can sell the same cookie many times. The only problem is that cookies will probably spoil with use. You can also have special DVD flavored cookies, computer-book-flavoured cookies, etc.

    Lets see amazon try to claim that their cookies are not yours to sell.

    Get them now! Get them while they last! Fresh cookies from Amazon.com!

  • Re:An omen of things to come? (Score:3)

    by costas ( 38724 ) on Wednesday September 06, 2000 @07:14PM (#801332) Homepage
    Fixed prices are a thing of the past already in the 'brick' world; you, us, can't tell as easily as with the 'click' world though, because comparison shopping isn't as easy. But, consider these tricks regular --offline-- retailers pull:

    By far the most similar to Amazon's flexible pricing: checkout coupons. You know the little coupons you get printed on a tape similar to your bill at a super market? that is a checkout coupon and the contents of those are directly linked to what you just bought (I forget the name of the company who backs these things up with databases).

    Membership cards and private credit cards: e.g. a Target card, or say a Macy's card can be used to track your purchases and then target spam (old fashioned direct mail) at you. That has been around for ages and most people are aware of those. Well, what happens when Macy's sends you a catalog with some coupons inside? that is variable pricing, directly aimed at getting you to the store.

    Daily discounts. Thin-margin retailers (i.e. grocery stores) will routinely heavily discount --and heavily advertise-- a popular item to get people in the store. Those prices may vary from store to store, and day to day. Again, that is used for promotion, and is an entire science.

    The list goes on really... and yes, retailers already use massive databases and cutting-edge data-mining (I should know; you can figure out why). You can't really blame them though; they are plagued by ever decreasing margins, competition by nimbler online stores, and more and more demanding customers (as evidenced by this very thread).

    To make you feel better though, let me tell you that I've never seen a retailer that will consciously raise a price to a loyal customer, something that I doubt even Amazon will dare pull. The reasoning is simple: a loyal (i.e. a repeat) customer is far too valuable to loose for a coupla percentage points of profit. Word of mouth and future sales volume is far, far more important.

  • Old News (Score:3)

    by Kagato ( 116051 ) on Wednesday September 06, 2000 @06:36AM (#801340)
    This is old news. They've been testing random price drops for over a year now. They simply test to see at what price sells the best. From there they can maximize volume to profit levels.

    They've done it with books, VHS movies, and now DVD's. It's not a big deal.

  • Re:Not necessarily. (Score:3)

    by codemonkey_uk ( 105775 ) on Wednesday September 06, 2000 @06:37AM (#801345) Homepage
    websensei [slashdot.org] wrote:
    Also drug dealers usually offer great deals for first-time buyers, then once they have a steady customer who's come to depend on them they start the gouging.
    Are you talking from experience? Or are you wheeling out old propoganda?

    I would imagine, that your average scag head is especially unhappy when prices go up. S/he'd be used to getting her 5$ bag, I'd say a dealers much more likly to stiff on quantity or quality than price, and then who's going to be the biggest sucker, the new kid who's "trying it out", or the old mess-head thats done more dope than Cypress Hill? - No your analogy is poor.

    Amazon (et al) on the other hand are in a much better possition to shuffle prices as the see fit. If someone shops there regular it would not be hard to write a learning algorythm (GA, NN, whatever) that fiddles the prices on the "recomended reading" list to maxamises its profit.

    I could do it in a weekend ... and, Amazon, if your listening, for, say - ten grand, UKP, I will. :)

    Thad

  • Re:More /. Amazon-bashing (Score:5)

    by testcase ( 95188 ) on Wednesday September 06, 2000 @06:54AM (#801355)

    This is completely normal practice in the brick and mortar retail business, whay bash Amazon for it?

    This is absolutely not normal business practice in retail stores. The issue here is not that Amazon is analyzing the buying patterns of consumers in the aggregate and changing prices based on this information. The problem is that they are using some secret criteria to charge people different prices as individuals.

    Imagining going into Borders and being charged a different price for the same book as the person in front of you in the check out line. That is analogous to what is happening here.

    Frankly, if this happened in a 'bricks and mortar' retail store and the store would not release the criteria it was using to make their individual pricing decision how long to you think it would take before someone filed a discrimination suit?

  • Higher prices for MS users (Score:5)

    by FattMattP ( 86246 ) on Wednesday September 06, 2000 @06:55AM (#801357) Homepage
    a search for the Planet of the Apes DVD on the Amazon site that Computerworld conducted using a
    Netscape Web browser turned up a quoted price of $64.99 -- 35% off the original price of $99.98, according to the online retailer. But several seconds later, a similar search performed with Microsoft Corp.'s Internet Explorer browser resulted in a price of $74.99 for the same product.
    See what happens when you use Microsoft software? You pay and pay and pay... :-)

  • Re:it's revenue management - think airlines (Score:3)

    by Shotgun ( 30919 ) on Wednesday September 06, 2000 @07:01AM (#801384)
    I would compare it more to car sales.

    If I walk on a lot and the prices aren't posted on the cars, I immediately leave. Their goal is to size you up and determine how much they can take you for. For instance, they'll take a woman and try to convince her that the rattling from under the hood is insignificant while ranting over the cool in-dash make-up kit, and try to convince her that this makes the car worth $3000 more than the bluebook value. Totally disgusting behavior, which tics my wife off so bad that I HAVE to go car shopping with her just to discourage the jerks. (Guess what I spent my labor day weekend doing.)

    This type of profiling is the same in my eyes. Amazon wants to figure out what you as an individual, rather than the market in general, are willing to pay for an item. It's just that in this case, there is a sticker price in the window so you can fill all secure inside that you are being treated fairly, but the sticker you get isn't the same one everyone else gets.

    As for comparison shopping, what happens when this profiling database gets distributed? Everyone knows that you like Anime, and you have to pay twice as much as I, no matter where you shop. Are we back to the situation where only the people who don't need credit can get it?

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