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

[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.

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: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. ;)