What Uber and Amazon have in common - demand based pricing

posted by Brian Mudd - 

What Uber and Amazon have in common - demand based pricing & how that "Prime-Day" pricing might not be a deal at all: 

Bottom Line: Have you ever been skeptical of advertised specials at a store in advance of big sales? The practice/idea of "marking" up the regular price of merchandise to advertise a price that reflects a big sales is an age old sales tactic. It's not something Amazon.com has been connected to previously however...and it would be a pretty big deal if Amazon's big sales events like "Prime Day" were to use the tactic. More is still unknown than known with the extent of Amazon.com's programmatic pricing during big sales events but one vendor who's been selling the same product at the same price for two years on Amazon.com is calling out Amazon for a deceptive practice. 

The company is Remodeez & the sell foot deodorizers on Amazon.com for $9.99. That's the only price they've ever sold for on Amazon over the past two years but recently, that's not what Amazon.com was suggesting. The CEO of Remodeez told Fox Business that the day before Amazon's "Prime Day", the regular price was being reflected at $15.42 and that the product was "on sale" for $9.99. On Prime Day itself the regular price showed at $18.44 with discounting to $9.99. So there never was a sale price or any price change for anyone who purchased the product, regardless of when they bought them on Amazon, however some were made to think that was the case. The CEO of the company was upset that Amazon was misrepresenting the regular price of his product and contested what Amazon did on those two days but didn't get anywhere with them. So the CEO took matters into his own hands and conducted research on traffic, product demand and sales and believes that he figured out what happened. He believes that Amazon.com used demand, or surge, based pricing. 

The practice of surge pricing is used by many services like Uber around big events and high demand times. That being said it's a known that isn't hidden. The allegation by Remodeez CEO is potentially much more effectual if it's true. Amazon.com might not be offering great deals on all of the products that seem to be on sale on their biggest days. It could be that their computer programming demonstrates what the regular price would be based on the increased demand for products on their biggest sales days, rather than what they are usually sold for on the site. So the next time you think you're getting a great deal based on what Amazon.com is suggesting - you might check other sites online to see how real that "sale" really is...

Brian Mudd

Brian Mudd

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