Amazon mystery: pricing of books
Imagine this: You go to a bookstore, browse, choose a couple of volumes. But you don’t want to carry the books around. So you ask the clerk to hold the tomes until Saturday, when you’ll come back to buy them.
When you return, the bookseller hands you the items but advises you that he’s raised the prices. “I knew you were hot to buy them,” the clerk says, “so I figured I could make a few extra bucks.”
That’s what it feels like online bookseller Amazon.com Inc. has been doing to me.
On Nov. 6, seeking to boost my dubious culinary skills, I decided to buy “The Cast Iron Skillet Cookbook.” I went to Amazon and placed the book in my electronic shopping cart but got distracted and never finished the transaction.
The next day, I signed on to Amazon again. A pop-up message informed me that the price had increased from $11.02 to $11.53.
This seemed odd. In physical stores, prices of books are usually fixed, immune to fluctuation by season or whim. Indeed, they’re one of the few consumer items that come with a printed price from the manufacturer.
Although the electronic world provides much greater latitude in pricing, as a longtime Amazon watcher I had never seen such an abrupt and unexplained price change. The cookbook, published two years ago by a regional press named Sasquatch Books, is decidedly obscure. Amazon’s bestseller list gave it a ranking in the 18,000 neighborhood.
I checked with friends, who accessed their own Amazon accounts. They determined that the price was now $11.53 for them too. Was it conceivable that Amazon, seeing the only prospective customer in sight reaching for his wallet, decided to raise the price just a bit -- enough to help its bottom line but not enough to scare him off?
I decided on a test. I added a bunch of books, most of them newly published, most of them obscure, to my shopping baskets with both Amazon and its British affiliate, Amazon.co.uk.
On Dec. 15, I checked my shopping baskets. Nine of the U.S. books had increased in price; three had decreased. At the British branch, nine had increased and none had decreased.
The increases were modest -- often about 5%, sometimes less. But, as with “The Cast Iron Skillet Cookbook,” they were perplexing. Why would the journals of novelist John Fowles, published two months ago to widespread apathy, increase by $1.05?
An Amazon spokesman said the company wasn’t trying to make a few extra bucks off me during the holidays, but that it otherwise wouldn’t talk about its pricing strategies.
“Prices change,” spokesman Sean Sundwall said. “Prices go up, prices go down.”
Sucharita Mulpuru, an e-commerce analyst at Forrester Research Inc., wondered whether Amazon was going down the path of dynamic pricing.
Dynamic pricing involves selling identical material for different amounts based on the customer’s willingness to pay. In the physical world it’s a common feature. Want to fly to Paris tomorrow? It’s going to cost lots more than if you can wait a few weeks.
But there’s also the risk of alienating customers. In 1999, Coca-Cola Co. was reported to be testing a vending machine that would charge more for its soft drinks in hot weather than in mild.
“It’s fair that it should be more expensive,” then-Chairman Douglas Ivester said.
What seemed fair to him seemed like price gouging to others. Coke promptly denied it was considering such a plan.
In 2000, Amazon was found to be charging people different prices for the same DVD. Amazon said it was doing this randomly, but there was another outcry and the company apologized.
Robert M. Weiss, a Chicago lawyer who has co-written an academic study of dynamic pricing, said that letting prices fluctuate almost as if books were stocks had obvious advantages for Amazon’s inventory control and profit margins. But its customers might feel manipulated.
“It might seem fairer if the consumer also had the ability to negotiate,” Weiss said.
A week before Christmas, when I signed on to Amazon again, I was informed of another round of price changes for the books in my basket.
The price of “The Jack Vance Treasury,” a book that won’t be available until late January, was lowered by 38 cents. But if I was going to stuff a stocking with the “Complete Poetry of Cesar Vallejo,” it was going to cost me $2.50 more.
Amazon spokesman Sundwall noted that the company disclosed the price changes. “We’re not trying to hide anything,” he said.
But this notice comes via a temporary message at the top of the shopping basket. Click your mouse once, and it disappears for good.
The price change for “Gonzo,” a deluxe memorial to iconoclastic rebel Hunter S. Thompson issued by L.A.'s Ammo Books, was too big for anyone to miss. On Dec. 26, Amazon raised it from $225 to $300.
Steve Crist, the publisher, said he didn’t know exactly what the bookseller was doing, but made it clear that none of the $75 increase was due to him.
“As Amazon’s stock of ‘Gonzo’ dwindles, I imagine it sees an opportunity to achieve a higher profit on its remaining copies,” Crist said.