Shopping on Amazon is an addiction for those who have started a couple of years ago. If you are one of these devoted online shoppers, we want to tell you that you must research products’ prices more carefully.
In recent years, Amazon’s searches and recommendations mostly steer you toward products sold by the company itself, rather than whatever happens to be the best deal?
ProPublica has conducted a research demonstrating that Amazon’s algorithms favor either its own products, or that of companies that pay for its Fulfilled by Amazon program, even when the price is substantially higher. When searching for 250 commonly purchased products, Amazon-friendly placements beat significantly lower-priced items for the coveted Buy Box placement (the one most shoppers click) “about three-quarters” of the time.
Even when you are looking at a direct price comparison, Amazon reportedly doesn’t show you the best deal. It will omit shipping costs for products from itself and its partners.
When contacted by ProPublica, Amazon stated that its algorithms consider many points beyond price. “Vast selection, world-class service and fast, free delivery” are also important, a spokesperson says. And to a degree, that’s true. Many shoppers can attest to third parties on Amazon who lure you in with a low price, only to take forever to ship or give you the runaround when you have a problem. And of course, the initial price isn’t necessarily the lowest in practice. For example, if you order a few items at once or subscribe to Amazon Prime, there may be no point for searching for an alternative stockist.
Such retail tactics could be construed also as anti-competitive. 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. In other words, Amazon is using its dominance to squeeze out the competition. It may improve some aspects of the experience by favoring itself, but it could also be hurting your chances at getting a better deal.
Here are two statements from Amazon on the same topic explaining that the majority of the items (9 out of 10) ship for free if you use either the free shipping option or Prime. The algorithms are designed to take those items into account, it says.
“With Prime and Super Saver Shipping (which requires no membership and ships orders above $49 for free), the vast majority of our items ordered – 9 out of 10 – can ship for free. The sorting algorithms the article refers to are designed for that 90% of items ordered, where shipping costs do not apply.”
“Customers trust Amazon to have great prices, but that’s not all— vast selection and fast, free delivery are also critically important. These components, and more, determine our product listings to ensure that customers have the best overall experience when shopping on Amazon. If a customer is solely 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.”