Slashdot Mirror
Online Shoppers Naive About Online Prices
smooth wombat writes "Have you ever been shopping online and noticed the difference in prices for the same item at different stores? Do you realize that not only are the prices different from store to store but they could be different for you compared to someone else who shops at the same store? Nearly 2/3 of adult internet shoppers thought that practice was illegal according to a study (pdf format) conducted by the Annenberg Public Policy Center of the University of Pennsylvania. First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site. From the article: 'The Annenberg study was based on results from a telephone survey from Feb. 8 to March 14 of 1,500 adults who said they had used the Internet within the past 30 days. The margin of sampling error was reported to be plus or minus 2.51 percentage points.'"
data mining that is...I'm surprised it took humanity as a whole to realize this.
When in danger or in doubt, run in circles, scream and shout.
How prevalent is this practice? It would be pretty silly to say I've never noticed it (it's hard for one person to check this by themselves), but I was certainly not aware that it happened.
"But for you, my friend - half price!"
(Hides price tag)
You can't talk about Wikipedia's flaws on Wikipedia
What, if Google is so famous then people should be aware of Froogle. It is on home page.
BTW here is the URL for poor souls (who pay higher price to e-retailers)http://froogle.google.com/
in traditional retailing outlets. For example, between my parents and myself, we have bought our last eleven cars from the same dealer. Recently a friend of mine bought the exact same car as mine (save the color) and paid almost $900 dollars more than I did.
CNN ran this yesterday as well. Kinda sleazy, but hey, it's business, and hey have to make a profit as well. Also, I admit I'm one of those who doesnt really check out prices that well before I purchase online. I usually make sure that I cant get it cheaper in town, and if that's the case, the first lowest price online that I see (including shipping) is mine!
What an awesome scheme. If the shopper doesn't demand a bargain, why offer one? The saavy shoppers find the good deals, and the unsaavy ones help the economy a bit more ;)
------- "From bored to fanboy in 3.8 asian girls" ----------
I don't have an issue with this. It's up to the customer to find the best price, not the retailer to offer the lowest price. Different customers will pay different amounts for the same product. I see no problem with retailers taking advantage of this.
(Just think about all the idiots who pay more for used goods on ebay than they would if they bought the same thing new. It's not the seller's responsibility to police this.)
Get fleeced. Well, Doh!
Let that be a lesson to all the brand junkies.
Deleted
This is why you should use deal sites such as -
m
Rage3d.com/deals
Slickdeals.net
Pricewatch.co
Pricegrabber.com
Froogle.google.com
They keep you informed about the latest and greatest deals as well as allowing you to comparison shop the item you are looking for.
Also don't be afraid to look at popular sites like ebay.com, half.com and amazon.com. A lot of times you can find a private retailer through amazon that will sell you a used copy of the book / movie / cd / DVD that you are looking for at 50% or better off the new price.
It's not hard to make informed decisions online if you refrain from impulse buying and do a little bit of research.
It never ceases to amaze me the apparent downturn of the average IQ of the consumer over the past twenty years.
The "different price for different people" thing has been happening with airline tickets now for at least a decade and I'm not surprised that other industries have also started doing this. What people need to do is take some extra time, shop around a bit more (even go to a real "brick and mortar" store), and see what similar items are priced at and make an INFORMED DECISION.
Nobody is forcing you to buy.
is as old as time. why are people suprised? it amazes me the lack of education people have when it comes to worldly knowledge.
the nice thing about the internet is it does not discriminate to whom it gives the discounts to, as long as you fit the "revisit" criteria
I try to avoid this by searching for what I want on pricegrabber.com, which gives me a list of online retailers who have what I want, and even what it will cost with tax or shipping. You have to put in your zip code before that, so I guess I may still be victim to it somewhat, but at least I can pick the cheapest of the retailers (assuming they have a decent rating)
Somebody please provide a sample site that does this.
Meh.
This is an outrage! I'm pissed off! I'm writing congress... but it will have to wait until after lunch... I'm going to see my favorite waitress Lisa down at the local burger shop.. she never charges me for my milkshakes cause I'm there every week...
ohh.. shit!
Don't anthropomorphize computers: they hate that.
I would argue most online shoppers don't know pricing period, I can't count how many eBay auctions I have seen where the items go for more then retail. Not to mention how many online stores are selling for more then retail.
This seems like the problem of knowing the length of the emperor of China's nose. No one has seen the emperor, but if you ask a large number of people "how long do you think his nose is?" you can do statistics, with a nice mean and standard deviation. The only problem is that all your data is crap, so the results are meaningless.
2/3rd's of people don't think it's legal for online retailers to charge different prices to different people? So what? What's interesting is what percentage of retailers ACTUALLY price this way. This tells us nothing about the landscape, just peoples perceptions of it.
Sounds like an extra feature, eh?
"Price Customization! Just for you!"
They ran this story on our local TV news last night. If I understood the reporter, it sounded like vendors were "customizing" the price based on all kinds of things, inlcuding whether or not you came to the site directly or had done a price search (aka Froogle) beforehand.
There's always a point/counterpoint to these things: virus vs. antivirus, spyware vs. antispyware, etc.
So it sounds like this is a ripe area for the next generation of home software -- setting up cookies and such on your machine in order to get the lowest price when online shopping (you heard it here first, folks)
Antone Gonsalves from InternetWeek gives some advice to avoid this:
Internet shoppers who want the best prices should delete cookies as often as possible. That's because the less online merchants know about you, the less likely they'll be able to figure out how much you're willing to pay.
Anyway, I'm not against companies taking advantage of technology to boost revenues. Heck, it would be naive to expect businesses to do anything else. But I do have a problem with failing to disclose the information you gather and the reasons for gathering it.
I agree with the study's recommendation that retailers be required by law to disclose their data-gathering practices. Companies that don't have full disclosure, while continuing to take what they can from customers, are the real "bottom feeders."
IGB: More fun than eating oatmeal!
" First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site" So...give people who repeatedly shop at your store a discount, but only if they change what brand they buy all the time, rather than having a favorite brand because.... oh I don't know....maybe it lasts longer?
FTA: They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty.
The arrogance it takes for an industry to come up with this phrase is just amazing. I think I'm generally more pro-business than most Slashdot readers, and I don't even fall into that category - I'll go with a brand/merchant I've used before even if they are priced a bit higher, if I feel I got good service, because I'd rather deal with a known quantity. But the "bottom feeders" term makes me want to slap some people around.
Perhaps what's really annoying me is that companies don't want to compete and so are doing everything they can to attract their "ideal" customer while saying "screw you" to the other guys. As someone who has been ignored at car dealers on several occasions (usually because of my apparent age or because of the borrowed car I was driving that day), I find the practice of turning customers away arrogant and annoying. Changing prices only makes it worse.
...a list of websites that do this? :-)
There was a story a few years ago about Amazon charging people different prices on the same items based on the customer's geographical location.
..etc across site, with the cheapest price on top. The information includes shipping costs:
You can use this site to compare prices on books, cds, dvds
http://www.bestbookbuys.com/
You can also blow your cookies and see what the prices are before you sign into your account.
If you don't like the price that something's being offered at, then you just don't have to buy it.
There's no legal obligation that car dealers have to give everybody the same lowest price that they ever sold a car for.
I'm not sure about the idea mentioned in the article that regular customers will get lower prices though - surely it should work the other way around. You get the customers landed with cheap prices and as they keep coming back you gradually tap them up until their visits start to drop off and then you start to lower them back down.
You shop around, haggle, diligently apply for all possible rebates, never settle for anything else than the minimum price == Demon
Guess which of the two businesses prefer?
For example some movies and mp'3 are FREE from some places while others seem to charge more money. I guess it pays to shop around :)
But all of those computers are (at the least) in the same IP subnet, if not the same exact IP address; so they can determine (at least roughly) where you're at. So you might not see different prices.
....are stupid. period.
Know what I like about atheists? I've yet to meet one that believes God is on their side.
Hmmm.... me thinks someone is posting to the completely wrong thread.
Meh.
You might want to try http://pcindex.co.uk/ for your PC needs.
From the site:
Currently indexed:
13 major UK retailers, and over 4500 prices.
Prices and stock levels are updated daily!
Enjoy.
I'm just here to regulate Funkyness
Customer: "How much is it."
Vendor: "How much you got?"
It's just a different store front, I don't know why people are so surprised.
For many, many years, particularly in areas of the service industry where prices may be negotiable, people have been quoted a price based on something as simple as their clothes or their car. If they look like they'd be willing to pay more, is it wrong to ask for more?
"No fair, you changed the outcome by measuring it!" - Professor Hubert J. Farnsworth
You mean they are tracking my buying history!!! They are giving me a different price than someone else!!! Why that is shocking and outrageous!!! How dare they use age old methods of prefered customer discounts and high-tech haggling. I thought the web was supposed to be the final frontier where all were equal and eveyone got the best price!!! *chuckles ironically*
Madre de Dios! Es El Pollo Diablo! -- Captain Blondebeard
First-time buyers at a retailer could see higher prices than a firm's repeat customers
That seems like an odd strategy to me. A potential first-time buyer may simply be lost to another retailer with a lower starting price.
I know the Slashdot crowd has a reputation of living in their parents' basement, but come on. Have any of you expressing surprise and outrage ever shopped in a grocery store? Let's see...
Almost every item is listed as a "regular price" and a "club price". If I possess one of their club cards (i.e. approximation of a frequent shopper), I pay the club price. If I don't possess such a card, I pay far more.
Oh, and then there's the whole coupon thing. Based on my shopping habits, sometimes a coupon prints out, making me further pay less than another consumer for the same item in the same store. Sometimes they even mail me a coupon to encourage me to buy a particular thing!
You can express your opinion on the fairness of this, but expressing surprise or doubt that this occurs only shows you haven't been paying attention in the online OR the offline world.
I'm a big tall mofo.
This is simple one-to-one marketing. The basic theory goes that it is more profitable to keep a current (reliable) customer than try to find new customers that may or may not be reliable. That is why you are seeing more "loyalty" and fewer "first time buyer" incentives.
What does this button do...
you mean there are naive people on the internet?
That could be true. Although, I do a lot of comparison price shopping before I order online and tend to stick with the better known sites, so maybe I just don't come across this practice.
Meh.
Don't be surprised if no online vendor takes you up on your tempting offer to disclose their trade secrets in exchange for satisfying the curiosity of "ylikone" on Slashdot.
I'm a big tall mofo.
To summarize the "study":
Idiots shop offline, idiots shop online.
Merchants rip them off offline, Amazon rips them off online.
In economic terms, this is called the reserve price, or the price someone is not willing to exceed in order to purchase something. In a perfect economy everyone has their own unique reserve price that they feel is fair for what they are buying. It's been accepted in the airline industry for years, but I guess when it's applied to other items people feel like they were ripped off if they find that they could have gotten it cheaper.
This just in: there is a difference between what you think is illegal, and what is illegal.
twitter.com/gravitronic
Just because it happens on the 'net doesn't mean it's a totally new practise. Hell, brick and mortar retailers have been doing this for years. Normal customers get the retail price, but when you're a preferred customer, or on some marketing scheme you get discounts.
Doesn't bother me at all.
The shopping world has always been divided between suckers and price hunters....Move along, nothing to see here.
plus or minus 2.51 percentage points
That's odd -- my screen reads "5.21 percentage points."
"How do you expect me to see the forest with all these damn trees in the way?!"
... is here
One of the ultimate grails of maximizing profits is to segment the market to such a point that sellers get out of each individual buyer as much as he or she is willing to pay for any item.
In the case of online shops, technology allows sellers to get a good approach to maximizing acceptable price per individual buyer.
Smart buyers can also use technology to maximize the ammount of satisfaction they get per-buck spent - try comparisson sites, online user reviews and such.
Dumb buyers will continue to passivelly get reamed by smart shops. Call it natural selection.
They would send out the same catalog to the same address but would have different prices for the same items depending on how much you had previously bought or were male or female. People began to figure this out and complained.
Link 1 about this issue and another link from a 1998 Forbes article on the issue of price discrimination.
For a more in-depth look at price discrimination, see this link which is a muli-page essay from the Virginia Journal of Law and Technology from 2001.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
How can it be illegal to change prices based on what type of customer you are? Are people that stupid? What would we have done? Government intervention to force fixed pricing, sounds great, if your not into capitalism? It would seem that many Americans now want to be spoon fed the cheapest prices. its called research, your not supposed to just buy from the first place you find an item you want, your supposed to look for it, its a capitalistic society, competition of prices is what drives the market to change, if one company wants to charge less for a product because they have repeat customers...that would make sense to me...keeps them coming back, if your a one time pass through then yeah, why wouldn't' they just post the generic price? They don't know if you're coming back, you offer no real potential value outside of that one purchase. It just pisses me off to see some one bitch and say its "against the law" to have price variation based on customer usage. Don't like the store policies, don't shop there.
Induhvidual
Customers are naive about prices period. Discriminatory pricing (what this article talks about) is prevalent in retail: coupons, special codes, AAA rates, frequent flyer miles, all are ways of charging some people less for the same product or service that others are paying more for. In the end it's all psychology: if Amazon or Dell gives customer A an "instant rebate" on the TV she just purchased, that's perceived as being a good retailer, but if they charge customer B more than customer A w/o any coupons or gimmicks, that's perceived as unfair.
Discriminatory pricing is here to stay, shops just have to get smarter about practicing it...
Anyone with half a brain ought to have recognized this happens by now. Someone mentioned that it should be inverse, that initial sales are cheaper and loyal customers get higher prices. What crack were they smoking? Say a customer buys a pack of DVD-R's from Site X and pays $29.99 for a spindle of 50 and the store gets a $10 profit from it. He likes the store, selection, etc. so he decides to buy them from there exclusively. So now he keeps buying them but Site X only charges him $24.99 cutting their profit in half in hopes of enticing more purchases from him either in DVD-R's and/or in other products. Now the model has shifted from one of maximizing profit through mark-up to maximizing profit on volume as it is better to get $5 from 100 loyal customers each because in order to get the same profit, you would have to lure in 50 new customers.
Brick-n-Mortar stores with an online presence will charge differently too. In fact, anyone who shops at Best Buy and 'pre-shops' on their website should easily have seen this because they offer better prices on the website than they do in the stores. I got caught by this when I bought some DVD-R's that were $19.99 on the site, but $39.99 in the store. I asked about the price discrepency and the cashier said that the website was no longer an online representation of the brick-n-mortar stores, but now competes with them. Of course Best Buy is not so dumb as to make you buy something from the site and have it shipped, you can get the price on the website by selecting Store Pickup as your shipping option.
Anonymous Cowards generally receive no replies because you're a coward and I'm a bitch
How prevalent is this practice?
I've experienced price changes within the span of five minutes, or less. I'll be surfing around to sites, comparing prices, and I'll return to a site I've just visited, and they'll increase the price on me [I've never seen a price decrease].
I think they program the software so that the more hits they get on a product page served to your [preset] "cookie", the more they edge the price up on you, figuring, I guess, that you're really interested in the product, and that maybe they can "scare" you into purchasing it [or maybe somehow bleed that extra $10 of profit out of you on account of your insatiable desire for the product]. And no, I don't think this is primarily a supply and demand thing - I think these price change engines are primarily driven by some [previously arcane] theory of marketing psychology. The airline/hotel reservation systems [Expedia, Travelocity, Orbitz] are particularly guilty of this [and, again, I do NOT believe that it is primarily attributable to a finite supply of airline tickets or a finite supply hotel rooms].
And of course, you also have the phenomenon of e.g. different Yahoo stores [different URLs] that have identical ownership [i.e. identical "whois" lookups], and identical inventory [and, typically, identical SKUs], but which offer slightly different prices on the very same items. Or merchants whose "normal" price on an item differs from their "advertised" price at e.g. pricewatch.com.
Generally speaking, these kinds of gimmicks really tick me off, and tend to push me towards a site's competitor [assuming they aren't playing the same damned game] - and it sure doesn't make a damned bit of difference to me whether I purchase that ticket from Expedia, Travelocity, or Orbitz.
In reality it costs a fair bit of money to acquire a new customer, and discounts just add to that cost. Therefore, a sales department might be reluctant to give new customers deep discounts, as that creates less profit and creates a customer that will just continously want more discounts, and perhaps generate no profit. OTOH, a steady customer is worth discounts, if those discounts are neccesary.
The brand shopper is the same thing, and most people are familiar with this. Each person may pay a different amount for the similair product due to coupons and sales and variation of pricing between brands. Some people will buy whatever brand for which a coupon is available, or whatever brand is on sale. Others will stick with a brand. The fact is one pays a different price for the essentially the same product. Even small geographic differences affeect price.
What i think is happening is computer logic allows the volume retail chain to apply the principles of lower volume sales chains.
I do however think these variations are going to be small because any online retailer who charges too much is going to risk losing customers in the extremely fluid internet market. A firm like Amazon, who goes through a great deal of trouble to make it easy for customers to stay, is not going be seen as the highest price retailer on the planet. Likewise, since it offers good service and selection, it is not neccesary for it to be lowest.
As always it is important to consider if the advertised product and service is a value. For instance, it is quite common that the bigger container of product is actually slightly more expensive. For example, 8 ounces of something might cost $.99 and 16 ounces might cost $1.99.,
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
That's why I don't ever just buy from one shop. Loyalty points, rebates and special offers do nothing to change my shopping habits. If they're reputable, cheaper than everyone else and have good customer service, I'll buy with them.
Thanks to pricematching sites, I never have to be stuck to one site ever again.
http://www.neobard.info - wacky world of me
The bottom line is that any service can charge basically whatever they think someone will pay. As long as there aren't fradulent claims (such as a "guarantee" that their price is the lowest", they can charge double the value if they think it will sell.
Normal stores off incentives to returning customers. I get money back at Macy's when I shop there. That is the same as Amazon offering me a better price on a DVD because I am a frequent customer. People get all riled up over things on the Internet that happen every day anyway. Same thing with credit cards online. People are terrified of typing in their credit card number over HTTPS, but will hand their credit card to a random 16 year old kid standing behind a counter.
/. ++
I know what you mean. The first time I used ebay was to buy a WinCE clamshell device. I also wanted to get the memory chip to upgrade it's install of Wince to 2.0 (It shipped with 1.0)
So I found an auction on ebay. Several as a matter of fact, all from the same company. The chips were selling for $90 to $125 a pop. I was a bit put off by this price, and decided to click the "Buy this item direct from our web site" link in the middle of the ebay ad.
This link was in large type, easily five times the size of the surrounding text, red and blinking. Kinda hard to miss.
They were selling it for $25 from their web site.
I can i\only image the laugh they were getting form the ebay auctions. They were doing everything reasonable to make it easy for people to get the lowest price they had to offer, and yet people were paying five times that because they couldn't be bothered to click a link in the middle of the damn ad.
"Live Free or Die." Don't like it? Then keep out of the USA
Your comments about car dealers ring very true. Infact, I'd say the primary reason I currently own a german car (and it's the 5th from the same dealership)... is because of the way I was treated.
In more recent experience, I've found that for some reason, the luxury german dealerships (MB, BMW, Audi) are much more friendly and forthcoming than those at the Japanese or American dealerships.
When I was younger (18), I walked into a Honda dealership looking to buy a new civic. I could easily afford it and already had a loan worked out [which I didn't tell them...]. The dealer had the balls to say to me, "Maybe we should look for something cheaper, used."
He could have sold me a Civic that day... but instead I bought a VW, since the dealer was respectful and helped me find the car *I* wanted.
A few weeks back a friend and I calculated the total dollar sales this dealership made as a direct result of people I sent there, who would have otherwise never considered VW or Audi or would have not used that dealership...
The total? > $1M
Needless to say, when speaking with them recently about a new car purchase, they offered me almost 40% more than any other dealership for my trade... and gave a better price on the vehicle I want.
I have some loyalty to them, because they have treated me well (even under new [evil] ownership). But, I still shop around, because there's no point in paying more when you don't have to.
Volume deals for corporate customers I can understand, but blatant price discrepancies just because you browse a site differently than another single customer is bad business. I don't know if I would consider it illegal, but it is definitely unethical.
Why? I'm not trying to be trite but I see no ethical dilemma here. What you are talking about economists call price discrimination and it is not only not illegal (in most cases) but I would argue it isn't unethical either. (with appropriate exceptions for things like gender or racial discrimination which are genuinely harmful) If you as a customer are willing to pay a higher asking price without any effort at negotiation or alternate sourcing, where is the ethical dilemma? No one forced you to buy from that vendor. It's not as if you can't get a perfectly adequate computer from someone other than Dell. Small businesses are generally willing to pay a different price than large businesses or home consumers. Why shouldn't Dell charge more to those willing to pay it?
Price discrimination makes many people (us Americans in particular) uncomfortable because we have deeply seated notions of "fairness". If I don't get the same price as you we seem to feel that is somehow unfair. But in reality most prices for goods and services are negotiable and we probably don't have the same williness to pay. If I'm willing to pay more for something than you are, what is unethical about someone selling to me at a higher price? Especially if I'm too lazy to look for a better deal. I'll be honest, I don't really care if an LCD monitor costs me an extra $100 if it does what I want and I can get it when I want it. You may feel differently and that's fine, but it doesn't mean I'm being screwed because I'm willing to pay more for convenience or service or even a brand.
This was a very timely post. Yesterday I ordered a Pantone Colorvision Spyder2. I saw it posted on a Pricegrabber-like service for $151 so I ordered it. When I got the confirmation message, I was pissed that it wouldn't ship until next week. I went to the same service from my home PC and it was $70 higher across the board.
is price fixing, would you rather have that? Not me, I'd rather hunt around for a good deal for major purchases. It's worth it, you can get 20%+ more gear that way!
Some loyal customers get discounts, but consider this for a moment.
You're going to buy cable television. They offer it to you for $29.95 per month or whatever, then they spike the price. This would be the exact opposite of the whole loyal customer thing, right?
Why would the practices of online retail be any different than the practices of traditional retail stores? When I sold auto parts for a living, there were at least 5 prices for any particular item, depending on who it was buying it. There was the "white" (list) price for the customer you did care for, then there was the "pink" price that you used for the average Joe, then the "yellow" price that you used for your good repeat customer, then the "green" price for the mechanics, and finally the "golden rod" price for the mechanics that you had to steal from your competitor. Nothing new here.
While I understand why a seller wants to offer the same thing at different prices for different customers (although I don't think it is ethical), it eludes me why they would want to present different delivery dates to different customers.
A while ago I was looking for a certain book. I came across a link to the same book sold at http://www.amazon.de/ (the German Amazon shop). I followed the link twice, but with two different browsers. I ended up looking at the same page with two different browsers, each with its own history and cookie cache. In one window I was presented with 1-2 days availability, in the other one I was told it would take 3 days. I reloaded both pages at the same time to rule out that any change in data was the cause for this. After I cleared all private data on both browsers, both showed the 3 days availability.
The only difference I can think of that Amazon could take into account for calculating the date is the data stored in certain tracking cookies. I don't have an Amazon account, so they can't have used my past buying behavior pattern, or even identified my as a previous customer.
I feel this behavior is hard to explain and unethical. It leaves me with the feeling of being lied at deliberately by an online shop, just based on their prediction of my buying or complaining behavior.
Yes, you are right there. -- Another glass of champagne?
This just exposes the mentality of the average internet user: if something is bad for them, they expect it to be illegal. They expect the government to take full responsibility for their well-being, and this is why government (the US government, at least) has gotten so big.
I was reading a front-page article in my city's newspaper the other day. A "mentally disabled" woman walked into a retention pond and drowned. The response from the journalist was not to blame the caretaker of the woman, nor the gate that she passed through to get to the pond, but the pond itself, and the government that allows retention ponds to be built without fences around them!!!
*shakes head*
...just my 2 gil.
Fixed price retail was invented because retailers did not have the skilled staff or the IT to offer dynamic/negotiated pricing. It is really only a temporary phase in the evolution of retailing.
Customers may hate paying different prices, but it is the only way to both maximize the number of customers that can buy a given product and fairly allocate profit (difference between the value received and price paid) across both the sellers and the buyers. In a fixed-price system some extremely wealthy buyers get a great deal (i.e., they would have been willing to pay far more) and extremely poor customers get nothing (i.e., they cannot afford the fixed price). If you work out the math for the system, you can show that different customers paying different prices maximizes the total number of customers that can afford the product and maximizes profit for the seller. In a competitive marketplace, maximizing profit is actually lets companies offer goods at lower prices because a profit-maximizing strategy lets a company undercut the competition.
Dynamic pricing also lets a company change prices to reflect the fact that some customers are more expensive than others.
Two wrongs don't make a right, but three lefts do.
*gasp*. Ohhh noooosss!!! Europe may have to face up to a dirty little secret filled with horrors. That is, Europe has its fair share of stupid people too. Bwahahahaa.
I fart in your general direction.
If you want to run a profitable business you will charge the maximum that the customer is willing to pay.
I don't see anything wrong with this. You can't blame the business for taking advantage of people who aren't willing to shop around.
Better than being regressive. Right, reptile?
Targetted pricing is hard to do for any item that can be purchased at multiple retailers. Dell can do it since they're the only ones who sell Dell products (no way to comparison shop). Likewise, retailers with exclusive product lines (for example, clothes) can do this as well.
What's more interesting isn't the pricing ignorance but just general privacy ignorance. You'll need to go to the end of the study for the summary, but it has some really interesting numbers. For example -
share my information with other websites or companies. Correct answer - False 75% wrong
if it is shown proof of the errors. Correct answer - False (You have to fix it yourself) 76% wrong
national Credit Reporting Agencies that can give you a copy of your credit
report?" 66% of the respondents could not name any of them.
In short, consumers know little of what laws protect them and where they are vulnerable. With that level of ignorance, consumers are unlikely to press for better privacy regulation or report violators of the current laws.
Any proposed law would have us ALL paying the worst price. Typical progressive garbage laws. Right, comrade?
I take it most people have never shopped for auto parts? It certainly was an eye-opener to watch my friend talking on the phone with the local auto-part store getting a $40 discount on an item, simply because he was a regular customer. Whereas I walk in to the store, and get markedup $5-$10 just because i'm wearing sweatpants instead of jeans!
This is a natural part of a free market economy. The same people who are complaining about this would also complain about a planned economy. Moral of the story: you can't please all of the people all of the time.
Me (Blog)
This is sorta off topic, and I wrote this essay for another forum, but I think it's relavent anyhow because people should know why prices are very likely to be 20 to 40 times higher before the year is out.....
The Coming Collapse of the Dollar
and will FOSS Save the Day
Yeah, I know, the title sounds like gloom and doom. But seriously, I want
people to read this, so they can understand the big picture making it
more likely that they can improve and secure their life over the long
term. I am not an investment adviser, and I don't get paid for this -
so take things here with a grain of salt please.
Money is supposed to be a medium of exchange and a store of value. And
while it's true that money is still used as a medium of exchange, US money
at least, has not been good as a store of value since the 1970's when the
US dollar became 100% unlinked from any commodities (like gold). Well
I take that back, for some periods the dollar has been a great store
of value. Which is surprising, because other countries that had tried this
trick ended up having hyper inflation as their currencies became worth not
much more than the cost of ink and paper. But in the USA this has not
happened for several reasons:
1st: A LOT of people are used to using dollars as a store of value and
exchange, so it takes a lot to change that way of life.
2nd: (and most importantly) even if a US citizen does all his transactions
and makes all his earnings in other currencies, he still must eventually
convert any gained value to US dollars to pay taxes (or go to jail), which
creates a demand for dollars propping up it's value and keeping it from
collapsing.
3rd: The good citizens of the USA have had large productivity increases for
long periods of time, which has a tendency to disguise how badly the
dollar has lost it's value. If your bang for the buck is half of what it
used to be, but the cost of making your widgets has also gone down to
half of what it used to be. Then you are less likely to notice that you
were robbed of half of what you would have had otherwise. Did I say that
right?
BTW: they even have a name for this level of inflation, it's called the
"core inflation". In my own technically illiterate terms, it's the
inflation point at where the economy doesn't panic over inflation because
efficiency gains disguise the loss of value. And it's no coincidence that
oil, commodities, and food prices (that is "volatile" prices that are less
responsive to productivity changes) are often excluded from inflation indexes.
4th: The dollar is "technically" not just printed up like other fiat
currencies (as they are often called). It is "loaned" out to banks (by the
fed) who, in turn loan it out to people and businesses, who in turn
circulate the money in the economy. So in the big picture, the need to
pay back dollar debt also creates a demand that keeps the currency from
collapsing.
5th: At this point, so many institutions and investors rely on the dollar
that they can't afford to let it collapse. So they will go through great
measures to promote it's value even if they perceive it to be worth less
than it is.
6th: Other currencies do the same thing, and often aren't all that great
either. Factually, the USA is big, powerful, more business friendly,
less corrupt, and more transparent, than many other governments. When
people seek a place to store their wealth, they will more often than not
choose the dollar over other currencies for those reasons.
So are those compelling reasons to use the dollar, or what? Well, all of
these reasons really translate to: people can't find an easy way
to squeeze out of using and relying on the dollar. However, when it comes
money and wealth, people are very creative and determined, so over time
the dollar sill looses value in spite of all these pressures. And over long
periods of time, it
Wal-Mart doesn't have the same price as their on-line store. Target doesn't even carry the same products. Two examples; Matrix Reloaded was 15.95 online (walmart.com) the day it went for sale, yet at the local Wal-Mart was selling copies for 21.98 - Target sells Divx certified DVD players online but doesn't list the Philips DVP642 (classic) where it can be bought at the local store.
Your audience is different. I'd say instore shoppers are naive about instore products and prices. Because of the Internet you can buy things from anyone, anywhere. Your options are not the local department store shelves anymore. But I would say that online prices are due to the overall market's supply and demand pressure - where Wal-Mart stores will "rollback" prices throughout the day.
I say anyone paying too much for something on the internet is a fool. It is easy to establish what an item *should* cost by using a number of shopping search engines. I'll never buy another piece of electronics on a whim - you can have much more when you do your homework.
Get your Unix fortune now!
Wrong. I'd ask you to back that statement up, but we both know your logic wouldn't follow.
There is a possibility that he screwed up, but we both assumed that Dell was varriably pricing the computers.
Anyone know if this is Dell's practice or not?
Its so funny that people call this sleazy, yet if you buy something in a flea market or an auto dealership, the odds are that any two people that buy the same thing get two different prices. The only different is that the public at large is aware of this practice in flea markets and car dealerships, and go into those environments expecting to negotiate.
As time goes on, people will become aware that price profiling exists on online stores, and will learn to expect it coming. Some people will learn to "shop" around, and others will not. And the people that do not will have no right to complain about being screwed any more than someone that today buys an auto at full price.
It's called "price discrimination:" Get each potential buyer to pay as much as they are willing to pay. From a business perspective, it's smart. From a consumer perspective...be aware. It's not really a "shady" practice. It's the same as haggling with someone, just that the "someone" in this case is a sophisticated computer algorithm.
"In Darwin Australia, Intelligent Designers troll for _you_!"
No more coffee for me...
I think this is one reason privacy is important. This is at least limited to the individual sellers. If a large group of them got together, tracking purchase patterns (something like a credit card company can do), they can figure out the best way to exploit the most money from you. They segment the market just like airlines, where everybody on the same flight pays a different price.
Remember the old GM card? They sent me a letter cancelling my card because I didn't carry a balance (I wish I would have saved that letter).
Happened to me again about 15 years ago with Citibank, who cancelled because my credit profile (i.e. paid off every month) wasn't profitable enough for them.
Amazing, but true.
A lot of places will run promitions via affilitates via sites like commission junction or something, so you have to click through a banner ad, be redirected a couple times, and cookied with a certain value, and suddenly all the prices on the website are $20 less or so. It's very common with the company I work for. There is an entire section of admin pages dedicated to setting up affiliate IDs and their assocated price setup for the various items for sale. Prices can be changed based on cookies, referrers, coupons, IP address, and even just random numbers (25% of the people just randomly see a lower price and are cookied as such).
What you are talking about economists call price discrimination and it is not only not illegal (in most cases)
I would argue that it's possible to interpret the Robinson-Patman Act in a way such that price discrimination like this *is* illegal, in the United States. It may not be prosecuted much, but the law seems pretty broad and could be interpreted to cover this sort of thing.
- Give a man a fire and he's warm for a day, but set him on fire and he's warm for the rest of his life.
This article and all the comments are making a big deal out of this but note that there are only two concrete examples of this practice in the article. Out of these two examples, one of companies offered a refund to the customers who paid a higher price. This "practice" occurs significantly less than the article implies and certainly less than the summary implies. Everyone complaining about this needs to rta. The summary of this article is also misleading, this article is about consumer ignorance of online and offline shopping and credit. Most of the data in the article is based off of survey statistics and not facts.
If you buy travel tickets online, be aware that the prices will basically go up as long as you "dilly dally" while booking a flight. These sites use cookies to track individual users and punish those users with higher fares in certain circumstances. To get the prices back down to normal, clear your cookies.
Since most people seem to take the stance that companies are justified in their evil ways because it "benefits the stockholders", thereby elevating capitalism to the status of a moral/religious system, we can just say that these web sites are an example of the finest capitalism, feel all warm and fuzzy, and go back to being exploited, sheep-like consumer drones.
Look up airline tickets.
You make money in business/consultancy/whatever by getting yourself customers and retaining them, whilst extracting as much profit as you can from them.
If you need customers, then sell something at cost to get them through the door - surely nothing wrong with that.
When they keep returning asking to buy from you, then sell to them at a price that gives you a profit, but keeps them coming back.
If you gouge them and they feel cheated, then they'll leave and not come back - but there's no point carrying on selling at cost, unless you've got a way of recouping lined up.
You're in business to make money.
"They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty."
No, lawyers and marketing dicks are the "bottom feeders." the rest of us are just trying to avoid getting screwed by both parties.
"Freeloaders" Get Higher Fees
GE Punishes "Freeloaders"
BJs Drops Customers
It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
I too found this article lacking in evidence that sites do this. I know it happens, but it's pretty rare. One place that uses a practice like this is good old X10.com (please don't buy from them). The one day only ad you see on the homepage real expires in one day. Of course if you delete your cookies you get the day back.
I wonder if newegg does this same thing. I bought some computer stuff there and I always use my login id to shop when I go back. I wonder if they inflate the price on certain items after they know you are already a repeating customer.
On the other side I always try to compare prices with Frys or pricegrabber.com, but sometimes I admit I am lazy and don't check prices on everything.
"Tempt not a desperate man" - Willy S.
There is this one small collectibles shop I go to frequently. On average I spend a couple hundred there a month. The owner decided to start giving me an extra 10% discount since I buy so much. Sounds good to me and I'm about to drop a few hundred there tomorow. Not sure how many others get the discount, but if someone gives you enough business it can make sense to give them a little extra to keep their business and show them you appreciate them.
Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
I find the tone of this whole discussion and /.'ers reactions distateful. While price segmentation is not illegal nor unethical, not telling anyone that a site does that I believe to be unethical and may be illegal.
It's ok to have price differences among different segments of the public, such as seniors versus others, new customers versus repeat customers, etc. What is galling is that these sites don't tell you this. That means the customer doesn't have enough information to do price comparison shopping.
Our system of commerce is based on transparency. The customer has all the relevant facts so that he or she can make an informed decision. When sellers keep information secret that system breaks down.
You cannot haggle on the internet. Most sites do not have a way to offer an alternative price. So the price posted is the one you have to accept if you want to purchase from that site.
Some have said that Dell has two sites - a home user site and a small business site, and that the small business site has consistently lower prices because the two sites are essentially run by separate entities, but anyone can shop at either. Why would anyone use the home user site if that is the case? The answer is that they aren't told otherwise unless they hear it by word of mouth.
This is exactly the kind of situation that the FTC was created to police. Fairness and transparency is the only ethical way and I am not surprised that most shoppers are unaware.
Online is more like shopping in bazarr where negotiation with vendors for best deal is important, if you you want the best deal. It's a time vs $ tradeoff for the consumer. I've lived and worked a lot outside the USA. Mostly '3rd world' and am in the habit of challanging every price that's not well below average. Got 20% off my laptop by phoning best price internet vendor and making an offer.
;-)
Also recently purchased a window airconditioner for a small rental unit I own and managed to get the local retailer to knock the $118 'sale' price down to $88. MSRP on the same unit is $159 and the only stocking internet vendors all wanted $175 plus ship! Salesman said I was getting a, 'we're losing money but we want your business deal. Having worked in retail sales and being familiar with margin structure on home appliances, I doubt they lost any money. The usual 50%+ gross margin took a hell of a knock though
Got a great deal on my moms new car through combo of visiting dealers and email. Took a day and visited 12+ dealers. Told them all what I wanted to pay and gave them my email address. No phone number! After about two weeks of various offers and rejections, one dealer said. "We're losing money..." and met my price. They may have lost money on that one vehicle, but with auto dealer incentives based on volume, the 'market basket' made them more than they would have by not selling me the car.
My point is that you have no right to pricing, unless you choose to allow the government to control everything. History has shown that this results in a fair price for all on everything one might want, while almost none of it will be available...So if you want a good deal, go out and get it. Otherwise, quit your whining and go watch some more TeeVee.
Nearly 2/3 of adult internet shoppers thought that practice was illegal...
Am I the only one who read that and thought they had surveyed pr0n sites?
Wait, don't answer that...
Study everything, you'll find something you can use - Jason Bourne
When I shop, my choices are not brand-oriented at all- they are based on what ever happens to offer the most value. So, club card or not, I still pick the best deals.
I personally think the whole "loyalty card" stuff sucks. I stopped shopping at one well-known chain several years ago because I decided that I wasn't interested in having my every purchase tracked and profiled. I still use a card (at a different chain), but they don't require any personally identifying information.
Joel has an excellent article on how pricing goes on software. Although not very related, this is basically an automated bad idea #2.u bberDuckies.html
http://www.joelonsoftware.com/articles/CamelsandR
That's totally different. I am also willing to pay an extra $100 to get a "better" monitor. But the post you replied to talks about paying an extra $100 to get the exact same monitor.
Where did you read anything about a "better" monitor? Not from anything I wrote. I was specificaly writing about paying different prices for the exact same product. That's what price discrimination is. It occurs all the time, everywhere in the world and it is ok. You want a better price? ASK for it. Odds are you'll get it. If they want your business, they'll negotiate with you since a sale, even at a reduced profit is normally better than no sale at all.
Every transaction is a negotiation. Most things we buy are covered under laws like the Uniform Commercial Code which amount to prenegotiated terms. Don't like those terms? You can negotiate with the other party to change them so long as you don't break any laws in the process. We're just so used to ignoring all the terms of sale that we often aren't aware that we've just conducted a negotiation every time we go to the cash register.
TWENTY to FORTY times higher? Where are you getting THAT?
Have you ever taken a college-level course on economics?
"When a website has a privacy policy, it means the site will not share my information with other websites or companies. Correct answer - False"
It often does mean this. This is a little semantic game.
"The Federal Trade Commission will correct errors in credit reports if it is shown proof of the errors. Correct answer - False"
Someone will do it if shown proof. Oh, the FTC you say? Sure why not? This is something people would normally look up and look into that they don't need to know off the tops of their heads, asked in a context where they can't look things up.
"Can you give me the name of national Credit Reporting Agencies that can give you a copy of your credit report?"
Can you give me the name of a competent plumber to call when you get an emergency? No? Your house could flood because you don't know who to call! File under: "Of course they don't have it memorized, because they know they can look it up."
Yep! Back around '98, I decided I wanted to buy a Trans-Am. (Ended up a bad move, since the one I finally got was a lemon anyway... but that's another story.) I went to one of the largest Pontiac dealerships in town and took a look at their inventory.
I was really considering the convertible "Ram Air" model, and they had a red one on the lot that I could have afforded (barely, granted - but would have been doable). The sales guy ignored me for a while, and when he finally realized I was looking at the car too long to just be someone browsing at random - he grudgingly walked over. I asked him about possibly getting a test-drive, and he told me "No way! We only let serious buyers test drive those. There's no way you can afford one of those anyway!" I said "Really? Ok." and walked out.
Went over later that afternoon and bought a black one from a smaller dealership.
Look, there are trillions and trillions and trillions of dollars that are sitting out there that people, businesses, and governments arround the world have been collecting up for 30 years as the mainstay currency. What do you think's gonna happen when they all decide in a short period of time that they had better loose those dollars beofre they loose too much value? Tell me that hasn't happened in other countries that were in similar situations.
"the cashier said that the website was no longer an online representation of the brick-n-mortar stores, but now competes with them. Of course Best Buy is not so dumb as to make you buy something from the site and have it shipped, you can get the price on the website by selecting Store Pickup as your shipping option."
I find it very interesting that they are willing to be the delivery point for their competitor. More likely the cashier doesn't know what he or she was talking about. I'll bet you could have pressed the issue with a manager and gotten the online price. I would have simply walked away, unless I *really* needed DVD-R's that day.
-fb Everything not expressly forbidden is now mandatory.
I used to work for a company that was an Amazon store and I know for a fact that Amazon does this.
You don't see it from one computer to the other because Amazon is extremely good at tracking users from their servers.
I don't find this to be as much of a problem as sites that charge like 50% less than offline for something but they expect you to buy overpriced accessories for it or else they take forever to ship it. I heard about this when I went shopping for a digital camera and I was tempted to buy online for the cheaper price but opted not to.
Grocery club cards are there primarily to encourage people to become regular customers. That's just good business.
The customized prices mentioned in the article are higher for many regular customers. The idea is to hook people by making them think they'll get good deals and then milk them for all they're worth afterwards. Sure, it's not illegal or anything, but businesses which do this probably deserve to take a large reputation hit.
Did someone put a gun to their head and force them to buy the product at that price? It's the etailers job to make money, if people aren't smart enough to comparison shop, then more power to them. How lazy are you when you won't take an extra 5 minutes to click to a rival website and check out their price?
IANAL, but IRC, it is in fact illegal to charge different customers different prices for the exact same product - and this irrespective of any differences in race or gender, etc... The only time when a company may legally charge different prices to different customers is when there exists a substantial difference in the market - i.e. shipping costs, etc.
Now, granted, that doesn't change the fact that a company can get around this by simply changing the packaging to produce a different product targeted at a different market. Nor does it prevent a company from dynamically adjusting prices to market conditions. But charging different customers differing prices is in general illegal. The fact that it's hard to prove, and many businesses get away with it, doesn't make it legal.
The society for a thought-free internet welcomes you.
Sure, it's one thing when Amazon suddenly charges you $500 for a book when you could've sworn it would only cost $25...
:)
But what if they charge you $24.99 instead of $22.99 based on whatever criteria ?
Wouldn't you like to know that you could get it cheaper if you fulfilled that criteria ?
It's just like shopping cards/etc... they get offered to you, and if you take it, you can get things 'cheaper' (whether you actually do is another discussion).
However, in these cases, Amazon doesn't offer you any such thing at all. They keep it as quiet as possible. So short of going to a different machine and maybe logging in as an entirely different user, you won't know.
That's what the problem is
Yes, I know, people should 'shop around' and find the best deal anyway. But that's between different stores. This is a price difference at the exact same store.
No, it does make sense. If you place an order with BestBuy.Com, the system takes care of everything. The only human(s) they have to pay is whoever goes and grabs the item from the store/storage and brings it up and verifies purchase. At most the whole process would take about 5-10 minutes.
A shopper at the store has to deal with sales floor staff, etc. For example it is much cheaper for them in terms of operating costs to sell a computer to an online shopper than it is to sell that identicle machine to an in-store shopper. The in-store shopper might eat up 20-30 minutes of the sales person's time, then they have to go wait in line at the cashier lanes, etc.
Anonymous Cowards generally receive no replies because you're a coward and I'm a bitch
The only thing I'm questioning is the statement by a Best Buy employee that bestbuy.com and the Best Buy store are so disconnected as to actually be *competitors*.
Obviously, a commissioned salesperson might see it that way, but that's as far as it goes.
-fb Everything not expressly forbidden is now mandatory.
That's kind of odd. I have found dealerships are willing to let someone test drive cars like that, even if they don't think that they will buy (so long as the dealership isn't too busy). The idea being that even if you don't buy, they hope you're still going tell all your friends about how sweet the Trans-Am drives, and maybe they will come over and look at one.
It's even at the point when I go to the dealer to get my car serviced, and I'm wandering around the sales room trying to kill a half hour, they are asking me if I want to take some new model for a spin!
You know, it amazes me that anyone thinks this is something new.
Some of the oldest companies I've worked for have HUGE "special pricing" books, that list special prices on specific items for certain customers. Heck, sometimes the pricing was even specific to certain projects.
The only thing new about this is that it can be automated, which is bringing it to the consumer level. Which means that once you reach a certain level of business, you may get special pricing without having to *ask* for it. In the "old days", if you wanted special pricing, you generally had to negotiate for it.
Somebody else (don't remember) has posted this insightfull link on sampling errors:
http://www.pollingreport.com/sampling.htm
These people who pay more are the same people who have every cookie they ever hit stored in their browser. So we already know they are naive.
Hint: It IS possible to shop at Amazon without logging in...
Rather than play by the rules and compete in an agora where the lowest price wins, they attack very system itself instead.
Consumers are playng by the rules, companies can't compete, so they're trying to change the rules. You know what that means, folks. It won't be long before corporate power becomes so onerous that a grass roots backlash occurs.
Orbitz Low Fare Promise
If you book an airline ticket on Orbitz.com and then find a lower airfare for the same flights, dates, airline and travelers on another Web site, you may be entitled to a $50 coupon per ticket toward your next Orbitz purchase.
Remember to make a printout or take a screen shot of the page with the lower airfare, either the itinerary confirmation or the summary page just prior to purchase, in case a customer service representative has questions. Expect a response to your claim within 10 to 15 business days.
Please read the Low Fare Promise terms and conditions below for full details.
Orbitz Low Fare Promise Terms and Conditions
Hotwire does this....
I was searching for an airline ticket, and the search came back at $445....
so I searched some more, and the price went up to $451
I went to a different computer, did the same search...$443
Bullshit
The same sellers will offer identical products at vastly different prices, you really have to shop around. Not all of them do that, but I've caught it a few times because I shop for very distinctive products, like underwater video cameras (no, not for shooting underwater p0rn) and ROV's.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
I was trying to arrange for friends in the US to get it and forward it to me, when my brother found that on a scale from 0 to 10, they score 0.92 in credibility. That's right, less than 1! The stories are all the same - they let you order a super-cheap item, but won't actually ship it unless you buy a truckload of vastly overprice extras.
It's legal, probably even profitable, but stinks. I assume more scams like that can be found out there - careful about those super-low prices!
Have fun!
I'm in a Unix state of mind.
And sometimes, paying a higher price can be better. The big guys can usually lower their prices more than the little guys. There *IS* an overhead that merchants and suppliers incur, even in online stores. They may not be trying to screw you, they might just be trying to make a decent profit. Just because Wal*Mart can offer you the lowest price, does that mean you should shop there? I don't. I don't like the way they do business, so I avoid them. Lowest price does not always mean best for the customer.
I work in the online retail business, and e-tailers know that there are several factors in getting and retaining customers. One of them is price. Pricing for internet retailers is very very complex, and prices may change daily because of a variety of factors. Each retailer may have their own methods, so to say "the industry" does something is somewhat misleading.
My beliefs do not require that you agree with them.
what if the price went up?
letes say you get to the register and the person says "We know you will only drink brand X soda, so we are raising the price a buck"
what if they just did it without telling you?
The Kruger Dunning explains most post on
Dimension 4700 - custom configured
April 15, 2005
Internet explorer - $1,127
Firefox - $1,576
Safari (Mac) - $1,675
Same model, same custom config, same everything.
Higher price.
WTF?
it's not based on computer, I don't think. The stores I visit, when you're a return shopper, you usually have a username and password. They could change prices depending on whether you're logged in or not. It might also be different based on location... multiple computers in your own home would be coming from the same location, so prices wouldn't change.
I believe it, though I don't have the proof to back it up.
Don't trust a bull's horn, a doberman's tooth, a runaway horse or me.
Oh! So what sort of p0rn needs a waterproof camera, then? Ewwwww!
They whose government reduces their essential liberties for temporary security, receive neither liberty nor security.
A dozen car/tech-based rewrites of the scene from Pretty Woman where Julia Roberts goes to buy clothes. Yeah, "Pretty Woman", of course you've seen it, you've got a girlfriend haven't you? Oh, forgot, Slashdot.
Let me put something to you: there is a lot of talk about social engineering here but it seems none of you realise the easiest "hack" of all is to put a suit on. If you want to buy things cheaper, have your complaints listened to, get the rules bent on your behalf the only cost a cheap suit. Possibly even a used cheap suit from a charity store. I'm going to buy a car or view a house (or most importantly I find, complain in a shop), I don't turn up looking like I've been dragged through a hedge backward because that just costs you money in the end even if they don't just ignore you.
I've known that sites dynamically change prices for some time; I've experienced it myself with amazon.com. Still, how much time does it takes to weasle out those last couple of bucks? 10 minutes of hassle?
And what if the best-priced site is one you've never heard of? How reliable are they? what is their return policy? shipping? charge state tax? You've got to research that also.
Sticking with one site, even if you know if may not be the best deal, may still be a good choice.
I'm sure I'm one of those guys that marketing droids love, but I don't care. My time is more important to me than saving a few bucks here or there.
sigs are for losers (except to point out that sigs are for losers)
Proof? Screenshots?
The classic example economics teachers give on price discrimination is discounts for seniors and youths. Gertrude on her fixed annuity and Billy with his paper route can't afford as much - so restauranteurs (for example) offer adjusted prices to fit the customer.
"Give a man a fish and he will ask for tartar sauce and French fries!"
For the sake of reproducing it, what was the configuration?
- go to price grabber site
- find cheapest and those close by
- go to that company's site
- buy product for about 10% less
Sometimes the last one doesn't happen, but it often does.Here's my problem with it: it's bad for consumers.
I disagree and so do most economists. True, not everyone gets the same price but that's ok. Consumers don't have a right to buy things at zero markup just because it would benefit them; that would put every company out of business. Nor do consumers have to agree to buy things at a ridiculous markup. A trade is a negotiated agreement. It's up to you and you alone to decide whether something is worth the asking price. You might regret it later but that's your fault for not doing a better job negotiating. Put simply, if the price is agreeable to you by definition that cannot be unfair.
The reason markets work well for consumers is because the market sets the price.
A "market" isn't a concious entity and doesn't make decisions. Markets don't "set" prices. A market is a collective group of individual trades, of which each involved party is ostensibly attempting to maximize his own benefit. If pricing information is transparent you may know what others were willing to pay, but sometimes this information isn't available. For example, how much is a piece of art worth? Hard to say since it is very subjective and what others paid isn't usually known. But ultimately what it is worth is whatever the buyer and seller are willing to agree to.
Even though there isn't time for an individual to research every purchase, they don't have to, becasue so long as a certain percentage of consumers do notice, the price will be competitive.
I think you are trying to explain market liquidity and you may be confusing this idea with the popular but useless notion of a "fair" price. Liquidity has little to do with how much time people are willing to put into trades. Markets are liquid because there are large numbers of buyers and sellers interacting.
As for a "fair" price, you have to think about what fair means. What is fair? If you ask an economist, any time a buyer and seller agree to a price, that is what that good/service is worth at that moment. It is by definition a fair price because both parties voluntarily agreed to it. This has nothing to do with markets per se because markets are just a collection of individual trades.
Price discrimination places the burden of researching every decision on individual consumers.
Why do you think it is someone else's responsibility to decide what something is worth to you? I don't know or care what you think something is worth, and I certainly don't want to be bothered trying to find out. If you are happy with the price someone is asking for a good or service you will pay it. If you aren't you won't. Like it or not, this IS a burden the consumer is supposed to bear. The only one who can decide whether a price is fair is you!
-----------
Please note that in all the above I'm assuming that there are no coersive forces or fraud at work nor a monopoly or monopsony is involved. Some regulation is necessary to keep markets transparent and liquid and in those cases we need third parties (usually government) to keep everything on the up and up.
I walk into a ferrari dealership and asked to drive a car, and they said no way. But the funny thing is, I wasn't going to buy the car.
I think they program the software so that the more hits they get on a product page served to your [preset] "cookie", the more they edge the price up on you, figuring, I guess, that you're really interested in the product, and that maybe they can "scare" you into purchasing it [or maybe somehow bleed that extra $10 of profit out of you on account of your insatiable desire for the product]. And no, I don't think this is primarily a supply and demand thing - I think these price change engines are primarily driven by some [previously arcane] theory of marketing psychology. The airline/hotel reservation systems [Expedia, Travelocity, Orbitz] are particularly guilty of this [and, again, I do NOT believe that it is primarily attributable to a finite supply of airline tickets or a finite supply hotel rooms].
The travel agencies are not playing games with you. The "problem" stems from the pool of available tickets beeing distributed among differently priced buckets. Temporary holds take tickets out of these buckets. This may mean that there are no more tickets available in cheap buckets so the price appears to rise, somtimes multiple times throughout the day.
The key information is that at the end of the day, holds expire and the remaining tickets are reallocated. You've never seen the price go down? That's becuase you haven't been checking at the right time. Try between midnight and 7:00am. Often those cheap tickets are available again.
The margin of sampling error was reported to be plus or minus 2.51 percentage points.
Quoting the error to this precision shows the investigators do not have the slightest clue about statistics. 0.01% of the sample size is a 0.15 fraction of a person...
I would like to see a list of businesses who do this, so I can either avoid them or be extra-scrupulous when buying from them. I'm particularly interested in those who do it without being up-front and clear to the customer about what they're doing.
It can't possibly be good publicity for a company for customers to be told that the price might be changed between the time that it's advertised and the time they purchase, certainly without it being clearly indicated next to the price. In many countries this would be considered a fradulent practice.
The "problem" stems from the pool of available tickets beeing distributed among differently priced buckets.
Look, I know there are these things called "supply and demand", and I don't doubt that they have a rather profound influence on this thing called "price".
However, I honestly don't think that what's happening. I've seen it so often that I'm convinced there is a family of semi-smart software packages that are tracking your preset "cookie" [and/or your IP address], and/or keeping track of the total "hits" [or queries] for a particular product, and then playing games with the prices that are being served to the queriers [e.g. if the software senses an increase in queries about a product, then it's programmed to raise the price as a response to the increase in queries].
Now an ostensibly neutral observer to this conversation might proffer the thesis that I'm paranoid, but obviously I would demur.
Alternatively, one could try to associate "an increase in demand" with "an increase in queries", yet I would counter that "an increase in demand" is more or less identical with "an increase in SALES".
But I think both of these explanations are being too charitable to the people who designed the software - my belief is that thinking behind the algorithm goes something like "Hey, we've got some poor sucker out there who's showing some interest in our product - let's see how much we can jack up the price before he'll lunge for the bait."
Anyway, the moral of the story is that if you want the rock-bottom lowest price on a web purchase, then don't close a browser window that contains a price quote - and open a new browser window to check prices with the store's competitors.
Totally opposite my experience in car dealerships.
;)
One day when I was 18, I went with a friend of mine to some random car dealership where we lived. We were first year university students living in residence on our parent's money, we were flat broke and wearing rags. We found the most expensive car (a $90,000 corvette), and asked the sales guy if we could sit in it. He was more than happy to oblige, so we got in and it was a very nice car.
No test drive of course (we didn't even ask), and we left without buying anything. But the salesman was very friendly and accomodating the whole time. Bored I guess
Example: Coupons. Coupons allow stores to set two prices, a high price and a discount price. People with small budgets use coupons and save money; people with large budgets are generally not concerned with cutting out coupons and pay the higher price. More transactions occur--there is less deadweight loss in the economy; the store makes more money; and those with smaller incomes can buy more than they would be able to otherwise. If there was not a coupon, the profit-maximizing price would be higher than the coupon price, but lower than the high price. The store makes less money, the poorest purchasers miss out on the item because the marginal cost of purchasing it is now too high for them, and those slightly better off than the poorest get a worse deal.
As a general rule, everybody is best off when sales are maximized in a non-coercive fashion. This applies to pretty much all forms of price discrimination in competitive markets.
When things get complex, multiply by the complex conjugate.
The department store that I worked at in college will sometimes offer a different price on the website for the same item, but if the customer comes in with the printout from the website looking to buy it in store, we would adjust the price to what the website was charging. However, if you're wanting something shipped, it's often cheaper to come into the store and have one of the sales people put in the order to ship from the warehouse, because instore warehouse orders are a flat shipping fee (free over a certain amount), while the website is a sliding scale based price of the item--in both cases, the item is shipping from the exact same place.
Eagles may soar, but weasles don't get sucked into jet engines...
Really just a standard corporate PC.
XP Pro, half gig ram, 18 inch LCD and Office Pro.
I have the full 9 page hardcopies of the configs.
Item for item, they are identical.
Why would I lie?