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

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.

Comments

And So It Begins

[cunina]

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.)

Re:And So It Begins

[Penguinisto]

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.

Re:And So It Begins

[supremebob]

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.

Re:And So It Begins

[TheFakeTimCook]

"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...?

Re:And So It Begins

[Anubis IV]

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.

camel camel camel

[Mouldy]

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.

Re:camel camel camel

[rikkards]

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

Sneaky bastards

[AlanObject]

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.

In some ways, Amazon is insufficiently managed.

[Futurepower(R)]

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?

Re:In some ways, Amazon is insufficiently managed.

[AmiMoJo]

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

Re:In some ways, Amazon is insufficiently managed.

[lgw]

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.

Amazon Is Just Fulfillment

[CycleFreak]

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.

Re:The Cheaper Assumption

[Penguinisto]

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. ;)