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Amazon Says It Puts Customers First - But Its Pricing Algorithm Doesn't (propublica.org) 110

Posted by msmash from the unfair-algorithms dept.
ProPublica has a report today in which it warns Amazon shoppers about the results that they see on the shopping portal. It notes that people often hope that the results that come up first after a search are the best deals, and that's what Amazon will have you believe, but its algorithm doesn't work that way. In what may surprise many, in more than 80 percent of cases, Amazon ranks its own products, or those of its affiliate partners higher. From the report: Amazon does give customers a chance to comparison shop, with a listing that ranks all vendors of the same item by "price + shipping." It appears to be the epitome of Amazon's customer-centric approach. But there, too, the company gives itself an oft-decisive advantage. Its rankings omit shipping costs only for its own products and those sold by companies that pay Amazon for its services. Erik Fairleigh, a spokesman for Amazon, said the algorithm that selects which product goes into the "buy box" accounts for a range of factors beyond price. "Customers trust Amazon to have great prices, but that's not all -- vast selection, world-class customer service and fast, free delivery are critically important," he said in an e-mailed statement. "These components, and more, determine our product listings."
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Amazon Says It Puts Customers First - But Its Pricing Algorithm Doesn't More

Amazon Says It Puts Customers First - But Its Pricing Algorithm Doesn't

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  • Price isn't everything (Score:5, Insightful)

    by Anonymous Coward on Tuesday September 20, 2016 @03:43PM (#52926677)
    When I buy an item, I will pay more to get it directly from Amazon or from a seller that ships through Prime. That way I don't get screwed if there is something wrong.

    • Re: (Score:2)

      by sims 2 ( 994794 )

      I do the same but I do it for the guaranteed delivery dates.

      Problems are very few and far between. And everything has been taken care of very promptly..with the one exception of that one package they lost and I had to reorder all of the items. I did get a refund but it made everything I ordered about a week late.

      • Like everyone else, I've seen the odd newspaper photo of a Fedex or UPS truck dangling from an overpass, but surprisingly, very few packages are evr misplaced.

        There is, however, a cottage industry associated with following delivery trucks around to steal packages off of the stoop.

        Going with a large retailer, especially if you can afford their membership fees, is a bulletproof option. Primarily, if there's any discrepancy, they bend ovr backwards for you.

        • Re: (Score:2)

          by sims 2 ( 994794 )

          The package was lost somewhere between amazon and UPS it showed that it was sent to UPS but it never arrived at UPS to be shipped.

          There only company that is both large and has stuff I actually buy is amazon the only other I can think of that I might even consider is walmarts shipping pass.

    • When I buy an item, I will pay more to get it directly from Amazon or from a seller that ships through Prime. That way I don't get screwed if there is something wrong.

      Totally agree. Amazon's satisfaction policy is reasonable and uniform, so no surprises or hassles trying to save a dollar.

      Here's something that puzzles me about their search algorithm. The first search will pull up "most, relevant" items. And you quickly scan the first pag or two for the cheapest version and find something you like. Then you switch to "lowest price first" sort order. And when you do this something really odd happens. That item you found using the relevancy search is often not there

    • ProPublica is an unethical tabloid. Read it in that light and you'll get it.

      I've previously commented about ProPublica's continuous attack on the American Red Cross, a publicity stunt that goes, "Find something people trust; tell people that something is violating their trust; gain lots of eyeballs". Sound familiar? Do we all trust Amazon here? I mean, I know the corporate bullshit line is coming, but be honest: you use Amazon every fucking day, and you don't feel like you're getting royally assraped

  • That guy's given the Scottish musician a load of money, and he never plays my favourites. Jings, and also crivens!

  • Only its "Prime" customers come first... (Score:5, Interesting)

    by kbonin ( 58917 ) on Tuesday September 20, 2016 @03:56PM (#52926761)

    My own data points as a non-prime customer...
    - Not that long ago items purchased using "free shipping" arrived at my door 2-4 days after order; now its 2 weeks.
    - Free shipping orders seem to sit in a queue for up to 10 calendar days before being shipped now.
    - I've seen items in shopping cart suddenly get flagged as 'we're sorry, this product is now only available for Prime customers' and moved to the second cart.
    - With paid 2-day shipping, my items hang around 2-4 days before being shipped.

    For me, this all happened RIGHT as I was about to finally purchase Prime. Since I noticed this, I will never purchase Prime. And I've started shopping around for all my large purchases again, which are now made mostly elsewhere.

    • My own data points as a non-prime customer...
      - Not that long ago items purchased using "free shipping" arrived at my door 2-4 days after order; now its 2 weeks.
      - Free shipping orders seem to sit in a queue for up to 10 calendar days before being shipped now.
      - I've seen items in shopping cart suddenly get flagged as 'we're sorry, this product is now only available for Prime customers' and moved to the second cart.
      - With paid 2-day shipping, my items hang around 2-4 days before being shipped.

      For me, this all happened RIGHT as I was about to finally purchase Prime. Since I noticed this, I will never purchase Prime. And I've started shopping around for all my large purchases again, which are now made mostly elsewhere.

      Weird.... I'm a long time Amazon Prime subscriber and I always get my items by the designated date when I order. The only time that I see any delay is over the weekend but the shipping dates reflect this as well. I live near Boston, so perhaps the service isn't as good in other areas of the country.

    • Re: (Score:2)

      by Leuf ( 918654 )
      I've heard that the sitting around is mostly them using their own trucks to bring the items from your order to a nearby fulfillment center. I notice this more when I order a bunch of unrelated small things. When I order a single large item it still ships fairly soon but spends longer with the shipping company. Either way it gets to me within the shipping estimate time. You just have to be aware that the shipping estimate range is not the same as what you get from a normal shipper where it's usually goin

      • Re: (Score:2)

        by Raenex ( 947668 )

        From Amazon with free shipping it's always going to get to you at the end of the range.

        Years ago I used to get items within a week. That's a big part of what initially turned me on to Amazon, its fast shipping.

    • Ah I remember those days. Now you pretty much get the middle finger if you don't have prime. I try to do buy my stuff elsewhere now because I don't feel like waiting a month to get stuff.

    • - Not that long ago items purchased using "free shipping" arrived at my door 2-4 days after order; now its 2 weeks.
      - Free shipping orders seem to sit in a queue for up to 10 calendar days before being shipped now.

      Amazon has always given extended projections on their free shipping. So, you can look at it as:
      1) They baited/conditioned you with faster than advertised shipping and switched to slower shipping (now that they've destroyed the competitors/developed a competing service), or
      2) They've been giving you better service than stated, and now they're scaling back on it to cut costs.

      I do agree that the whole thing stinks of "offer exceptional service, drive out competitors, drop quality of service, offer the o

    • As a Prime customer myself, I won't even consider products from vendors on Amazon that aren't eligible for Prime.

  • Says who? Where does Amazon make the promise, or even implication, that it's search results will show the best bargains at the top?

  • Wow - What Complete Bullshit (Score:3)

    by rudy_wayne ( 414635 ) on Tuesday September 20, 2016 @04:10PM (#52926859)

    a spokesman for Amazon said the algorithm that selects which product goes into the "buy box" accounts for a range of factors beyond price. "Customers trust Amazon to have great prices, but that's not all -- vast selection, world-class customer service and fast, free delivery are critically important,"

    If I want to buy a widget and I'm looking for the one rated best or cheapest or whatever, why would that rating be affected by (a) how big Amazon's selection of products is (b) how good Amazon's customer service is (c) Amazon offering free delivery. Those things may be important in deciding whether or not to buy from Amazon, but how is any of that even remotely relevant to which widget is best or cheapest?

    What a load of fuck.

    • Um, because with third party vendors you don't know what you might get and when. If a third party vendor is out of stock you might need to wait a long time for your item. Amazons website doesn't know if the third party actually has the item in stock. If you buy from Amazon you know it is in stock. Free delivery is kind of important too. Basically I only order from Amazon itself, and you should always choose Amazon over a third party vendor.

      • Re: (Score:2)

        by chihowa ( 366380 )

        Yeah, I completely prefer Amazon listing itself first because whatever I'm buying will (most likely) be what was shown/described and will ship quickly.

        Amazon is quickly turning into the huckster's bazaar that eBay was (is?), with the third party sellers doing things like sending used batteries in ziplock baggies instead of the retail packaged items described.

    • Re: (Score:2)

      by Pascoea ( 968200 )

      If I want to buy a widget and I'm looking for the one rated best or cheapest or whatever

      Not sure what the problem is. There are a number of different sorts and filters. Sorting by price, lowest to highest, highest to lowest, and rating all appear to do what you'd think they should. The only one I question is the "relevance", I'm assuming that's the "magic" one that shows you what amazon wants you to see. (and it's the default)

      Nothing here discusses their ratings being manipulated. I assume what's being discussed is how the magic sort works. And as long as you understand that what they a

    • If I want to buy a widget and I'm looking for the one rated best or cheapest or whatever, why would that rating be affected by (a) how big Amazon's selection of products is (b) how good Amazon's customer service is (c) Amazon offering free delivery.

      If you SORT your search results by "Price: Low to High", you will still see the lowest-priced sellers first, and when you click-through to the item, will be offered the lowest-priced seller. Of course Amazon's site is still crap after all these years, and shippi

    • Personally, I'll outright not buy things from third-party vendors. I like my $80 of items and free shipping by the end of the week, versus $73 of items and $39 of shipping that'll get here 2-3 weeks later. I buy third-party when I'm getting 1-cent books, in which case I pay $3.99 for shipping and 1 cent for the book--that is, $4 instead of the advertised $0.01.

  • I do this... (Score:5, Informative)

    by wbr1 ( 2538558 ) on Tuesday September 20, 2016 @04:11PM (#52926863)
    I sell on amazon on the side. About 60-70k a year so small potatoes to amazon but a cool side biz. However, competing for the buy box is crucial to sales. One reason that amazon favors themselves and those that pay for services is that the items are in an amazon fulfillment center. This means amazon has control over inventory and shipping. If a 3rd party seller is fulfilling their own items, amazon has no view into inventory levels or shipping times other than past performance metrics (which do play a smaller role).

    Amazon closely guards the exact algorithm that chooses who has the buy box. It is known that they strongly favor themselves (of course.. they want the sales). So much so that I often avoid items that Amazon fulfills themselves unless the ROI and/or rank are very good, or my research indicates that amazon regularly runs out of an item and I can exploit the inevitable price jump during those restocking gaps.

    If you want more info on how the buy box works, there is a company called feedvisor that does repricing and other services for amazon vendors. I do not use their services (I use others), but they give away a yearly buy box bible. This uses information culled from their clients amazon seller accounts to see how competition and pricing and other changes affect buy box percentage and sales.

    http://feedvisor.com/r/resourc... [feedvisor.com] - warning it does require email registration, but it is an interesting read.

  • So Amazon lists items with zero shipping ahead of similarly-priced items that have shipping charges? So what? They are cheaper! Are they listing their house/preferred seller items before indentically-priced (including shipping costs) items? So what? Somebody has to go first! Dear lord, are we heading towards a 'retailer neutrality' movement where all items offered up get precisely equal ranking? How stupid. Did you know that supermarkets get paid for their premium shelf space (end cap, eye level)? Are we

    • Re: (Score:2)

      by godrik ( 1287354 )

      If these items were really at free shipping, then there would be no issue.
      The issue is that they rank it for free shipping. But if you add to cart less than $x (I think it is $35) or if you are not a prime customer, then you are charged shipping.
      So essentially, amazon is not representing fairly shipping cost across sellers. (Which is a hard problem to be honest.)

  • I guess the few people that still don't know that "business ethics" is an oxymoron don't know what an oxymoron is. But that won't stop them from pissing editos faster than silicon valley interns can piss code.

    Amazon need customers, not sellers. So guess which ones are getting screwed.

  • Amazon invents criteria for "best buy" which coincidentally match their own products. Surprise surprise surprise.

  • I hate the term "Free Shipping." If there were free shipping UPS, USPS, FedEx wouldn't be paid to move Amazon purchases to your door. The term should be "Price includes shipping." And of course the value of this shipping depends on the distance from the shipping point to your door. Maybe the price depends on that, but I don't know. If the included shipping price is the same then those farthest from the shipping point to their door are being subsidized by those close to the shipping points. I'm surprised tha

    • what.

      I think everyone knows that free shipping means you won't be charged for shipping, rather than the vendor mysteriously doesn't pay the shipping company. Given how free is commonly used, you're making a meaningless dysfunction.

      And shipping charges very often don't vary by distance within a country. If you're complaining that the shipping companies don't make exactly the same profit on every product they sell, then ok... But I don't really see why you care.

      • Within the US shipping costs do vary by distance the package will travel. For UPS check this link for shipping from one zone to another: https://www.ups.com/content/us... [ups.com]

        It's possible that the price of an item on Amazon's web site varies with shipping cost when "free shipping" is part of the deal. For Prime subscribers Amazon knows the Zip code of the recipient of a package and its point of origin as well as its weight. One way Amazon may be evening out shipping charges it pays is by building shipping wa

  • As long as they aren't increasing prices... (Score:4, Interesting)

    by swb ( 14022 ) on Tuesday September 20, 2016 @04:21PM (#52926955)

    ...to repeat customers.

    Maybe I'm misremembering this, but wasn't there a similar but more scandalous Amazon pricing technique where they were actually tracking customers and jacking up prices to repeat buyers?

    Maybe they gave that up due to bad press or maybe they weren't doing it all.

    I'm pretty sure airlines have done this -- I've looked at flights a couple of times and when I was ready to book, bam, price had gone up. Checked from another device where I hadn't looked at flights (using a different browser) and I had the original price.

    I know Dell did something like this years ago, too -- logged into their site with some corporate credentials and priced a server, did the same thing from another computer/browser which had never used them and the price was a lot lower.

    • ...to repeat customers.

      Maybe I'm misremembering this, but wasn't there a similar but more scandalous Amazon pricing technique where they were actually tracking customers and jacking up prices to repeat buyers?

      Maybe they gave that up due to bad press or maybe they weren't doing it all.

      I'm pretty sure airlines have done this -- I've looked at flights a couple of times and when I was ready to book, bam, price had gone up. Checked from another device where I hadn't looked at flights (using a different browser) and I had the original price.

      I know Dell did something like this years ago, too -- logged into their site with some corporate credentials and priced a server, did the same thing from another computer/browser which had never used them and the price was a lot lower.

      Oh they do. I got one of those push button devices to reorder as it made my first purchase like half price. Normal priced item was around $10, send time around $10, third time it was like $13. Canceled the order and threw the buy now device away. They are getting more and more cheaky about raising prices.

    • Comment removed based on user account deletion

  • Amazon Says It Puts Customers First - But Its Pricing Algorithm Doesn't

    I think most people understand that the phrase "putting customers first" means "We strive to serve our customers well, with the expectation that we are going to be well-paid for it." So this complaint doesn't make a whole lot of sense. Amazon isn't necessarily going to offer me the lowest prices in the world. They aren't giving away stuff for free, after all. And I want them to profit so they will be around to serve me tomorrow, because I do feel like they serve me well.

    the company gives itself an oft-decisive advantage

    Decisive advantage over what? Th

  • I purchased something years ago, living in Washington state as does Amazon; I was told I was being taxed as there's a chance they will be taxed. Now if they aren't taxed well they would keep the extra monies.

    Newegg.com has been my shopping area for years now and right after my Amazon purchase.

  • I gave up on Amazon after minimum purchases and refusal to sell star wars to non-prime members.

    When companies start spending that much time and money on ways to maximize profits like this seems better to cut your losses and take your business elsewhere.

    Bad enough the "search" function has always been worthless. No matter what you type into the search box even smashing the keys randomly brings up search results. I don't want to wade thru crap in the off chance intentionally not having a rational relevancy

  • the really don't like this sort of thing and will quite happily take the likes of Google on for what it sees as unfair/anti-competitive behaviour. The only trouble is that it takes them an age to act.

  • From the summary it looks like it says: "If Amazon is selling it for $6 + free shipping, and someone else is selling it for $4 + $3 shipping, then prefer Amazon for the buy box". Damn right I'd rather pay $6 than $4+3, I don't care which dollars go to which part of it.

  • Duh.

    Do you think that ANY amount of profit would satisfy Amazon's unsolvable and fake problem. Greed is NOT a real problem and NO amount of money would satisfy them.

    Thought experiment for clarification: Imagine you did 100% of your shopping via Amazon. Would Bezos be happy? No. To increase Amazon's profits of course he will try to redirect your shopping to the merchandise that gives him higher percentages. Once 100% of your money is going there, he'll just have to boost the prices some more.

    Hey, what else c

  • This just in "stupid people too stupid to shop on Amazon".

    A couple of clicks and a little bit of math and it's pretty easy to figure out what the best deal is.

    Price and shipping are but two items on my mental list to go through when I'm looking around. The time and cost of buying it local. Tax. Speed of delivery. Hassle factor if it is broken/wrong item/size etc.

    If you can't do the mental arithmetic then you probably shouldn't be allowed on the internet unsupervised.

    • Amazon always shows me the lowest price+shipping first.

      This is a ProPublica "investigative journalism" piece. You may as well read Drudge or ZeroHedge. ProPublica has no journalistic ethic and is invested in smear campaigns and moral panic over invented problems. I'm still surprised ARC hasn't sued them out of existence for libel, and can only surmise that they don't want people to take such legal action as validation; targeting Amazon is a switch for them, but not surprising.

      • You do realize Drudge is nothing more than links to everything else, including the so called "real" media.

        • Yes, and it's curated links. Real media says "man with gun stopped by armed restaurant patron," Drudge links to it; media says, "Armed patron was actually undercover cop; another patron opened fire and hit someone with a stray bullet," Drudge doesn't link that follow-up.

          You can do a lot by filtering information.

  • the search and display of items on the site is poor. the way I shop, I like things broken down into

    brands first-particular class of item-all the models with feature comparisons from particular manufacture side by side.

    generally what I have found is every item I buy comes in multiple models with stripped down versions, and multiple upgrades to choose from.

    w/ the current site design, it's actually impossible to locate all the specific different models in an easy fashion. you will literally be going in and out

  • Amazon is becoming more and more like a sketchy third-world bazaar. Last month, I bought some hair product my GF liked thru Amazon. What we received were two jars, unsealed and only partially filled with... something other than the actual product. It finally occurred to me that the weird smell of it was akin to linseed oil.

    Amazon quickly refunded the purchase, but even after posting a blistering review of this counterfeit and possibly dangerous product, I do believe that vendor is still a valued partner

  • I've been a Prime member since shortly after it started. Laley though, most packages arrive late. And they're no longer as competitive on price for small ticket (cheap) items. They still seem to be competitive on big ticket itmes, and even ship them on time, but I buy those seldom enough that Prime doesn't pay for itself.

  • In my experience, the "price plus shipping" rankings are accurate and even include the effect of tax. In other words, the first offer listed has the lowest total delivered cost, and so on. Shipping charges are omitted for most shipments from Amazon because I'm a Prime member and thus shipping is free - the listings even say "free shipping with Amazon Prime" and how long the shipment will take. There are some things that are not eligible for two day delivery - those are either especially large and heavy item

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