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Amazon Jacked Up Prime Day Prices, Misleading Consumers, Says Vendor (foxbusiness.com)

Posted by msmash on from the money-game dept.

An anonymous reader shares a report: A Charlotte-based startup says e-commerce king Amazon jacked up their suggested retail price during the company's annual discount event -- Prime Day -- to deceive consumers into thinking that they were getting a deal, when in reality, they weren't. Jason Jacobs, founder of Remodeez, a small company that specializes in non-toxic foot deodorizers and other odor stoppers, says he had an agreement with Amazon since 2015 on a suggested retail price of $9.99 for his products and was shocked after the tech giant almost doubled that on Prime Day to make it look like people were getting a discount, when they were actually paying full price. "They showed the product at $15.42 and then exed it out to put '$9.99 for Amazon Prime Day.' And on the final day, the price was like $18.44. So, we put a support ticket in right away and I rallied some friends through social media to go to their complaint board and complain," Jacobs tells FOX Business.

36 of 233 comments (clear)

  1. And So It Begins by cunina · · Score: 5, Interesting

    Amazon ran their retail business at a loss for years in order to gain market dominance. We always knew the day would come when they'd use their immense power to start extracting higher profits out of their customer base. That day has arrived. And, don't think for one minute that they won't do the same with AWS if they ever achieve the same level of dominance. (Giving us all a rare reason to root for Microsoft.)

    1. Re:And So It Begins by Anonymous Coward · · Score: 2

      I pay sales tax on everything sold directly from Amazon (probably with an exception or two) and even many of the things that are not sold directly from Amazon. I think this was a valid attack on Amazon a few years ago, but it's not really applicable anymore.

    2. Re:And So It Begins by Overzeetop · · Score: 3, Interesting

      "you buy from amazon for the convenience and the pre-paid 2 day shipping you signed up for with amazon prime"

      Yes, and the painless returns. You have to shop smart, but Amazon has one of the best direct/3rd party systems. Have you seen the dumpster fire that Newegg has turned into, or - God forbid - have you every looked for something at Sears/Kmart or Walmart online? Those last two are case studies in making a 3rd party marketplace a total clusterfuck on your site.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    3. Re:And So It Begins by Penguinisto · · Score: 5, Informative

      Actually, Amazon has been forced to collect sales taxes, even in states where it has no physical presence (at least as of April of this year). The only exceptions would be the five states e.g. Oregon) which do not charge sales tax.

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    4. Re:And So It Begins by supremebob · · Score: 4, Informative

      Yeah, this basically means that they're now working like every other retail business in existence.

      When I worked at a grocery store as a teenager, I must have marked up items hundreds of times only to "discount" some of them 10 to 25% off a week later. Basically, the item was only a few cents less than the old retail price, which then went back to the new marked up price a week later.

      The number of items that went up in price every week vs the number of items that went down every week was like 10 to 1. Basically, they just used the sales to generate price confusion so you were less likely to notice that your total grocery bill was creeping up about 6% every year.

    5. Re:And So It Begins by TheFakeTimCook · · Score: 4, Interesting

      "you buy from amazon for the convenience and the pre-paid 2 day shipping you signed up for with amazon prime"

      Yes, and the painless returns. You have to shop smart, but Amazon has one of the best direct/3rd party systems. Have you seen the dumpster fire that Newegg has turned into, or - God forbid - have you every looked for something at Sears/Kmart or Walmart online? Those last two are case studies in making a 3rd party marketplace a total clusterfuck on your site.

      I agree that Amazon has the logistics down "pat".

      Newegg always WAS a dumpster-fire. I haven't tried to order online from Kmart/Sears, but Walmart isn't THAT bad. Nice touch that you can avoid shipping costs if you have a Walmart nearby.

      For "tech" stuff, I often prefer B&H Photo over Amazon these days. Generally better prices, no sales tax, often free shipping, fast service (they even shipped something ON July 4th!), and there doesn't seem to be the issue with "counterfeit stuff" that is getting to be rampant on Amazon.

      For example, Apple recently studied all the supposed "Genuine Apple" AC adapters and cables on Amazon, and I think they found that some 90% of them were counterfeits.

      https://www.forbes.com/sites/a...

      OTOH, B&H is a much smaller target for those people, and has been in the mail-order business since the mid to late 1960s, at least, decades longer than Amazon; so, IMHO, they have as much, or even more, experience in this business, at least as applies to "tech" items. As for groceries...?

    6. Re:And So It Begins by Anubis+IV · · Score: 5, Interesting

      Is that still the case? Amazon started collecting sales tax a few years ago in all states where it has a physical presence. I believe they even collect it on behalf of third-party sellers if those sellers ship their products to Amazon's warehouses so that the products can be "Fulfilled by Amazon".

      Even so, I quite agree with the sentiment you're espousing that Amazon is far more threatening than most people give it credit. One of the smartest things they've done is play the part of benevolent monopolist while slowly becoming a more and more abusive monopsonist (i.e. the sole buyer) in a variety of markets. They made their margins razor thin so that they could drive both online retailers as well as brick and mortar stores out of business. Having succeeded in capturing a large swath of the retail market, we've now seen them start to squeeze both sides of the market for profit: they're turning the screws on sellers who have no one left to sell to, driving those sellers to unsustainable pricing while capturing the savings as profit for themselves, and they're simultaneously raising the prices paid by consumers who have been trained to shop only at Amazon, again capturing the increase as profit for itself.

      By playing the long game like this, they've managed to avoid any sort of major public outcry, given that consumers tend not to complain about cheaper prices, and it's only as prices have started going up that consumers have started to take notice. That said, anyone paying attention has seen the writing on the wall for years, given that monopsonies are just as dangerous as monopolies, and Amazon began abusing its monopsony positions much earlier. Antitrust regulations are designed to protect against both, but American regulators tend to be slow to pursue monopsonies, given that they have a far less direct impact on consumers. Now that Amazon is starting to take advantage of its near-monopolies and engage in other deceptive practices, however, maybe we'll finally start to see some regulatory intervention.

    7. Re:And So It Begins by Mashiki · · Score: 3, Informative

      Yeah, this basically means that they're now working like every other retail business in existence.

      Well not really. It means that they're working like every shady retail business in existence. In most countries this is illegal to do. It doesn't matter if it's pennies or thousands of dollars difference. Hiking the price before a sale, at least here in Canada falls afoul of federal consumer protection laws and provincial consumer protection laws in every province and territory. If you live in Canada, you should file a complaint. You can do so at this link here. Then click the "complaint form" section or you can call this number: 1-800-348-5358 and file a complaint directly.

      The government does investigate this stuff, they do levy fines over it. One of the big problems is, some people don't notice it or believe it's simply the market forces at work. A few years ago, there was an entire chain of gas stations in Quebec for exactly this. And there's currently an investigation into one of the big food chains here in Canada over sale manipulation.

      --
      Om, nomnomnom...
    8. Re:And So It Begins by danbert8 · · Score: 3, Interesting

      Even if it's illegal, it's still widespread. I've literally gone back to a Best Buy with receipt in hand for an item bought NOT on sale trying to exchange it for the same item ON SALE for $5 more than it was the previous day with the "regular price" $15 above what my non sale price was the previous day. I had to fight with a manager to let them do the exchange without me paying an additional $5 sale price.

      --
      Yes it's an anecdote! Were you expecting original research in a Slashdot comment?
    9. Re: And So It Begins by buchanmilne · · Score: 2

      "They're actually worse. In a traditional brick and mortar store, every customer sees the same price on the shelf. But e-Commerce stores like Amazon are increasingly turning to customer analytics to fine tune pricing on a per customer basis."

      In my country, many "brick-and-mortar" shops (stores) have moved from paper price labels to smart price labels (yay, IoT), and the vendors selling the solutions have been talking up the ability to do the same thing (with WiFi hotspots or bluetooth beqcons tracking shoppers) ...

  2. Alternate headline: by lq_x_pl · · Score: 2

    Company that sells stuff engages in shady behavior to maximize profits.

    --
    An internal system operation returned the error "The operation completed successfully.".
  3. The Cheaper Assumption by cahuenga · · Score: 3, Informative

    Amazon is no longer reliably cheaper than some brick and mortar options. I have run into this trend more and more in the last couple years.

    1. Re:The Cheaper Assumption by Anonymous Coward · · Score: 2

      Amazon has the stock advantage.

      That oddball movie? They have it
      A Nintendo Switch? They have it
      Some obscure part? They have it

      HMV just shuttered its stores across Canada 20 years ago they were a good place to shop for music and movies, they maintained a comprehensive stock as of last year they had walls (WALLS) of new release only material plus a mountain of other crap that wasn't music or movies.

      The future is massive efficiently managed warehouses tied to a delivery infrastructure with a catalogue dump online. It's going to be YEARS before anybody else catches them. Hell even Wal-Mart is feeling the hurt. As we speak they're tapping into dry goods and non-perishables, COSTCO better start paying attention.

    2. Re:The Cheaper Assumption by MightyYar · · Score: 2

      Yup, you need price comparison extensions in your browser if you want to only shop Amazon. If you can't install those, then you really need an extra tab open to a price comparison site. The irony is that their worst prices are for typical household items that they are pushing with their "Dash" buttons and subscriptions. Cleaning products are typically 50-100% more expensive than at Home Depot.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    3. Re:The Cheaper Assumption by SQLGuru · · Score: 2

      Amazon has tackled that, too. I live in a warehouse city, so there are many items I can get the same day.......so I don't have to leave the house and I can have it just as fast as if I got dressed, drove to the store, hoped they had it, bought it, and returned home.

    4. Re:The Cheaper Assumption by HumanWiki · · Score: 2

      "The future is massive efficiently managed warehouses tied to a delivery infrastructure with a catalogue dump online"

      I see someone has already failed to observe and learn from history. We had this back in the day - it's called the Sears & Roebuck catalog.

      Wanna know why it died? Brick and Mortar stores.

      Nothing beats the convenience of being able to have the item in your hands THEN AND THERE, NO WAITING.

      This is why I rarely shop online.

      You didn't just seriously compare a periodical paper catalog, with 4-6w shipping/return time with a service that provides same day delivery of well more than what was ever in an S&R mail order catalog, did you?

    5. Re:The Cheaper Assumption by Penguinisto · · Score: 3, Interesting

      Jut the opposite for me... I live in the sticks, so places like Amazon, Newegg, etc have the selection that the (relatively) local stores do not. Prices are generally lower as well (even when you factor in shipping).

      It's a tradeoff I know, but I'm okay with it given my locale.

      That said, There's lots of specialty websites out there as well, and Amazon ain't the only game in town when it comes to online shopping (e.g. water well filters... kicks the crap out of Amazon's prices, which in turn easily beat the prices found at the local suppliers. Unlike Amazon, the specialty websites also know the products far better.)

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    6. Re:The Cheaper Assumption by Penguinisto · · Score: 2

      He did - granted, back in the day(TM, pat. pending), mail-order was literally the only way many folks could even get anything, let alone have that much variety to choose from. Sure, you could have the local general store do it for you, but you paid the markup, and odds were good that the store just used the same catalog to order the stuff.

      BUT... timelines aside, it's the same mechanism, minus the Internet/computer bit, and with a slightly longer timeline.

      Now pricing/monopoly-wise, a better analogy would be comparing Amazon to Bethlehem Steel or Standard Oil...

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    7. Re:The Cheaper Assumption by Penguinisto · · Score: 5, Interesting

      Catalog sales were much less efficient.

      There is no "search" option in a catalog. You had to manually flip through a bazillion pages looking for what you wanted....

      Back before the days of search DB stacks and Index servers, paper catalogs (and even a lot of non-fiction books) had this thing in the back called an Index. It's that section of the book or catalog where every item was listed in alphabetic order, then listed the page number that contained that item's price and description (and maybe even a picture). If you couldn't find it directly from the index, you flipped to the right section (sporting goods, jewelry, whatever), started leafing through it, and if they sold it, odds are perfect that you found what you were looking for within that section.

      Depending on the individual's level of literacy at the time, it took like a minute or two, tops.

      Regards,
      An old fart who remembers having to find stuff without typing a word/phrase into a search box. ;)

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    8. Re:The Cheaper Assumption by torkus · · Score: 2

      It's actually quite comical to see the 'instant gratification' generation(s) happier with 2-day delayed gratification over the inconvenience of shopping!

      Granted it does let people be even more lazy...I mean save the time they'd spend shopping.

      --
      You can get rich if you own a politician, but you have to be rich to buy one in the first place.
  4. camel camel camel by Mouldy · · Score: 4, Insightful

    It's already known that amazon have dynamic pricing - it's not a stretch to assume that mechanism could be used for shady reasons.

    At risk of sounding like a cheesy advertisement: That's why I use camel camel camel!

    For those who don't know; it tells you the price history of any product on amazon - so you can see if they've hiked the prices before putting it on sale or just in general if the price is lower or higher than normal.

    1. Re:camel camel camel by rikkards · · Score: 4, Interesting

      Came for this
      It actually saved me about $40 when they decreased the price $40 a day after I bought something. Basically went like this:
      Me: Hey I bought this yesterday and you dropped your price
      Amazon: We don't price match
      Me: Ok I want to return my order with free shipping paid by you (50lb item BTW) and order a new one
      Amazon: ok we will match the price just this once

      Damn straight I will try again if that happens

    2. Re: camel camel camel by CrashNBrn · · Score: 2

      I think CCC only picks up changes that affect an item's price for at least a day - most of those prime lightning deals are 4 hours max. A thing to keep in mind with those, if the item isn't a name brand, check it's competitors... frequently a lightning deal is a discount on a no-name-like product that is overpriced, and has competitors that sell an equal or better product at the same sale price (potentially less) every day.

    3. Re:camel camel camel by cahuenga · · Score: 2

      LOL.

      Back in the day I had a flip-phone with one of those nub antennas that had broken off. I walk into the Verizon store and ask the guy at the counter to fix it as I had the phone insured, and guy says he can't do that because it still works. I look at the dude and say "I'm going to go outside to the parking lot and have a horrible accident and then I'll be right back for my new phone".

      He fixed it

  5. Sneaky bastards by AlanObject · · Score: 4, Interesting

    I needed a USB drive yesterday and when I went online to get one I noticed Amazon said that since I had a Prime account it was eligible for free same day delivery. On top of that their price was about $15 less than the local retail. (This was a 5TB Seagate, now in service backing stuff up).

    So I ordered, scheduled for delivery in the afternoon, and it came and I thought pretty amazing.

    What I didn't notice until later is that although there was no shipping charge there was a $12 tip for the driver ordered by default. Even had I noticed I don't pull tips from working guys/gals so the end result is that the "free" shipping cost me more than had I just gone with Amazon's regular next day free shipping.

    Caveat emptor and all that. I am all for regulated free market capitalism and I don't think Bezos/Amazon is evil but it is sort of ironic that real the effect (whether it was the intent or not) of AP delivery was to get me to pay the low-end worker directly for work that Amazon now doesn't have to pay for.

    And that's all I have to say about that.

    1. Re:Sneaky bastards by Trailer+Trash · · Score: 2

      I've had mixed success with same-day shipping around here. The first time I used it Amazon had the same price as Best Buy but free one-day shipping instead of me driving 15 minutes each way to Best Buy seemed like a good deal. I needed the item that day. It still wasn't here at end of day, and they didn't seem to understand that's a big problem.

      --
      Do you have ESP?
    2. Re:Sneaky bastards by JohnFen · · Score: 2

      What I didn't notice until later is that although there was no shipping charge there was a $12 tip for the driver ordered by default.

      That sounds like a shipping fee to me.

  6. Re: That's Just Wrong by slazzy · · Score: 2

    Don't use either one. There are plenty of great smaller vps cloud providers. My infrastructure is split between digitalocean, linode and vultur for fault tollerance. I can drop one in a second if they have packetloss, downtime or increase prices too high.

    --
    Website Just Down For Me? Find out
  7. BestBuy lost my business the other day for worse. by Maven0 · · Score: 3, Informative

    You guys seem to think that this is bad. I was in BestBuy the other day to buy a new keyboard and mouse. I decided to look up reviews while i was standing there and noticed that the price on the BestBuy website beat the one in the store for the keyboard by $30, the mouse by $15, and the mouse pad I was also grabbing by $5. I HAD TO ASK THEM TO PRICE MATCH THEIR OWN DAMN WEBSITE!

  8. In some ways, Amazon is insufficiently managed. by Futurepower(R) · · Score: 5, Informative

    There are many, many other defects in Amazon management. Every web page, for example, tries to sell you something else before giving full information about a product.

    Playing games with prices is EXTREMELY self-destructive. People buy much more from companies they know they can trust. When a company can't be trusted, customers must spend time thinking carefully about every item before buying.

    Amazon abuses employees, according to news reports:

    Inside Amazon: Wrestling Big Ideas in a Bruising Workplace (Aug. 15, 2015)

    Worse than Wal-Mart: Amazon's sick brutality and secret history of ruthlessly intimidating workers (Feb. 23, 2014)

    Amazon Under Fire Over Alleged Worker Abuse in Germany (February 19, 2013)

    Jeff Bezos, the CEO of Amazon, owns a spaceflight company, Blue Origin. Would you fly into space with a company whose owner makes abusive web pages?

    1. Re:In some ways, Amazon is insufficiently managed. by Penguinisto · · Score: 2

      Exactly this. I know too many colleagues who thought it would be mega-cool to work for Amazon, only to discover to their horror that they went to work for a giant, angry boiler-room with shit management.

      I've lost count over how many direct and blatant job offers I've seen in my mailbox (via linkedin)... Unless I find myself unemployed, I just shitcan them without a word. I prefer my sanity, thanks much.

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    2. Re:In some ways, Amazon is insufficiently managed. by AmiMoJo · · Score: 5, Insightful

      Always always always check historical prices on Amazon before buying anything. CamelCamelCamel is a good resource for doing that.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    3. Re:In some ways, Amazon is insufficiently managed. by lgw · · Score: 4, Informative

      Every web page, for example, tries to sell you something else before giving full information about a product.

      Only because it works. Every pixel is fine-tuned for maximum sales, and continuously validated. I'd rather see the product details above the other products, but then I'm a geek and so hardly representative of the greater shopping public. (I've heard it doesn't matter: most people just ignore everything and scroll down to the reviews.)

      Playing games with prices is EXTREMELY self-destructive. People buy much more from companies they know they can trust.

      This part of your post has been proven false by experiment. Oh, sure, it sounds truthy, but experiment trumps opinion. JCPenny has it's entire business built on this sort of deceptive sale. A CEO came along and tried to end the practice, start having non-gamed sale prices, and the business cratered. Shoppers wanted the "sales", even long after everyone knew the game. Not sure why, not what I would have expected, but you can't argue with reality.

      People just aren't strictly rational as consumers, and have all sorts of oddball preferences.

      --
      Socialism: a lie told by totalitarians and believed by fools.
  9. Amazon Is Just Fulfillment by CycleFreak · · Score: 4, Insightful

    Any manufacturer of sufficient size should be able to put up a web-based order portal where end consumers can buy their products. All they need is fulfillment. The maker of a product should easily be able to undercut any price offered by a retailer. In the past, they never did that because distribution was extremely difficult. This is no longer the case. Wholesale pricing. Distributor pricing. Retail pricing. Bugger all that! Make your product, accurately determine your costs and sell it directly to consumers for 10% more. Charge for shipping. Don't be fooled, shipping is never free. It may be included in the price so it's somewhat hidden, but it's never free.

    Granted, Amazon does fulfillment extremely well. But all you (as a manufacturer) has to do is ship your stuff. Give reasonable delivery times (5 - 7 business days, for example) and people will buy it. Save lots of money or get the product tomorrow? People will almost always choose to save $$.

    Cutting out the middle man has never been easier.

  10. "Shady" by dcw3 · · Score: 3, Insightful

    Disclaimer: Not talking about this particular case.

    Many of the comments talk about "shady" practices. What many here are failing to understand is that if it's not illegal, it's legal, and businesses are going to do it in order to maximize profits. It's the rare case when they won't act that way...typically when there's concern about some sort of bad press that could affect the bottom line. But in general, if we don't want businesses doing things we consider shady, they need be made illegal, or regulated...especially when it becomes monopolistic.

    And FWIW, I'm saying this as a conservative, small government fan.

    --
    Just another day in Paradise
  11. Pretty short sided of you to think that's it by Anonymous Coward · · Score: 2, Informative

    There are a ton more reasons manufacturers dont want to sell directly to the public. Source, I work for a manufacturer.

    1. Invoicing - invoices don't reconcile themselves automatically.
    2. Logistics - all these one-off deliveries don't package and label themselves.
    3. Returns - these things require a ton of manual intervention to process, rectify and account for.
    4. Partner Relationships - Many existing distribution contracts have clauses to prevent direct to consumer sales. Even if they dont have such a clause in place you are risking damaging a relationship with your redistributors which could have huge impacts to your business (see reasons 1-3).
    5. It takes capitol, resources and focus to run an efficient direct to consumer fulfillment center. Most manufacturers would rather (and smartly so) focus on making quality products and leave all the other business stuff to large distributors and re-sellers.

    Have a good day!