When customers search for and click on a product, the Amazon algorithm chooses one vendor’s offer to put in the buy box.
Advertisement
But Amazon added: ‘If a customer is exclusively looking for the lowest price available, as you have with this study, we clearly alert them on the product detail page that lower prices may be available from other sellers’.
An investigation by ProPublica has shown that Amazon’s search algorithms direct customers to its own products or those from companies that pay for its Fulfilled by Amazon program, rather than the cheapest items.
That was because the rankings displayed on Amazon’s price-comparison pages showed full price (cost + shipping) for items sold by third-party merchants.
Although even there, the company gives itself an advantage by omitting the shipping costs for its own products.
ProPublica also found that Amazon were biased when it came to price comparison. And to a degree, that’s true. Amazon tells ProPublica that its “vast selection, world-class customer service and fast, free delivery” are, along with price, important to its customers. And of course, the initial price isn’t necessarily the lowest in practice. It seems as the retail giant punishes those merchants that can’t afford to participate in Fulfilled by Amazon, and gives visitors a distorted view of their options. It may improve some aspects of the experience by favoring itself, but it could also be hurting your chances at getting a better deal. “The sorting algorithms the article refers to are designed for that 90% of items, where shipping costs do not apply”. The algorithms are created to take those items into account, it says. If a customer is exclusively looking for the lowest price available, as you have with this study, we clearly alert them on the product detail page that lower prices may be available from other sellers. But the cost difference between the algorithm-selected choice and the cheapest version available to buy elsewhere on the site was, on average, $7.88 for the 250 products, adding up to a 20 percent inflation across all the items. These include seller rating, closest item to the customer, price, and free delivery, along with other components that it did not reveal.
Amazon’s price comparison tool worked for Prime members, most of whom who paid $99 a year for free shipping and other perks, as also for people ordering over $49 worth of products who got free shipping.
Advertisement
Amazon is expanding its reach into many businesses, but it may not be in the business of finding the best price for customers.
