Zappos-Owned 6pm.com Accidentally Priced Everything At $50 Friday - It cost them 1.6 million!

[astro]

Wow! Looks like I missed a deal! (http://www.appscout.com/2010/05/zappos-owned_6pmcom_accidental.php)

E-commerce site 6pm.com, a sister site to Zappos.com, accidentally priced all of its products at $49.95 on Friday, costing the company $1.6 million.

"This morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95. The mistake started at midnight and went until around 6:00am pst," Aaron Magness, director of brand marketing and business development at Zappos, wrote in a blog post.

The mix-up cost the site $1.6 million, Magness wrote. "However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up," he said.

Among the consumer electronics available on the site that some lucky shopper possibly snapped up for $50 are GPS devices from TomTom and Magellan that range in price from $300 to $550, as well as pricer GPS systems from Humminbird that range from $1,000 to $1,600.

[si_blakely]

That was no mistake - it was a clever marketing stunt. They were under no obligation to honour the prices, and could have voided all the sales if they really wanted to. And they didn't lose $1.6m, because the margin between the retail price and their value is so high - in fact, they may have not lost any money at all (once you factor in the free advertising value they are getting). People will be flocking to their website waiting for the next mistake.

Si

[Bricker]

That was no mistake - it was a clever marketing stunt. They were under no obligation to honour the prices, and could have voided all the sales if they really wanted to. And they didn't lose $1.6m, because the margin between the retail price and their value is so high - in fact, they may have not lost any money at all (once you factor in the free advertising value they are getting). People will be flocking to their website waiting for the next mistake.


Why couldn't it have been a mistake that they are using as a marketing stunt after the fact?

[si_blakely]

Why couldn't it have been a mistake that they are using as a marketing stunt after the fact?Because I am a cynic. ;)

I find it hard to believe that any pricing engine would allow a price cap to apply over all stock in spite of the real item value without flags going up.

Si

[snowmaster]

And they didn't lose $1.6m, because the margin between the retail price and their value is so high - in fact, they may have not lost any money at all (once you factor in the free advertising value they are getting).
Si

Disagree, Si, the margin on some high end electronics, GPS's in particular is tiny. On a $300 GPS, mostly the profit is under 10% of that, and usually less than $10 of that.

[ZipperJJ]

All it takes is someone running a poor SQL query...."UPDATE Products SET Price = '49.95' WHERE ItemID = 72" ... and forgetting the WHERE clause.

I've done it myself, but not on a major retail site, thank god. lol

[Dangerosa]

Because I am a cynic. ;)

I find it hard to believe that any pricing engine would allow a price cap to apply over all stock in spite of the real item value without flags going up.

Si

Oh, the stories I could tell if it weren't a breach of confidentiality........

Lets just say your belief is naive. Yeah, it SHOULD work that way...but not all internet retailers DO work that way.

[billfish678]

The sad thing is most people who go the mega deals probably don't consider it theft, even though IMO thats exactly WTF it is.

Now, of course if an add for their house was mistakenly sent out out as "House for sale, $175" rather than "House for sale, $175K", they would flip out if someone insisted on buying it for $175.

"A deals a deal". My ass.

I wonder what percentage of purchasers would agree to cancel their transaction now that they know it was a big mistake?

[DiosaBellissima]

If I go to the grocery store and a can of peas is mismarked for, I dunno, a penny instead of a dollar, they generally give it to you for the marked price.

Hell, I went to Walgreens the other day to get some Oxiclean and grabbed a tub marked $7. I take it up to the register and it rings for $11. I mention it said $7, the girl goes and checks, comes back, and tells me their policy is to double the difference and give it to you that way. She gave me the Oxiclean and a dollar.

I've had similar things happen when I've bought clothes- so prices much higher than a few bucks.

So, my point is, I'd expect them to honor the price advertised, as that tends to be what is generally done for consumer goods.

[Dangerosa]

If I go to the grocery store and a can of peas is mismarked for, I dunno, a penny instead of a dollar, they generally give it to you for the marked price.

Hell, I went to Walgreens the other day to get some Oxiclean and grabbed a tub marked $7. I take it up to the register and it rings for $11. I mention it said $7, the girl goes and checks, comes back, and tells me their policy is to double the difference and give it to you that way. She gave me the Oxiclean and a dollar.

I've had similar things happen when I've bought clothes- so prices much higher than a few bucks.

So, my point is, I'd expect them to honor the price advertised, as that tends to be what is generally done for consumer goods.

They don't need to do this on the web if they catch the pricing mistake before shipping. There is a disclaimer stating so on most web sites - simply because its rather unlikely that that mis marked peas are going to cost a company $1.6 million (or in one case I know of $6 million in about fifteen minutes - it hit fat wallet).

[Dangerosa]

BTW, Amazon owns Zappos now. So they own 6pm. And Amazon sells an ecommerce platform.

[DiosaBellissima]

They don't need to do this on the web if they catch the pricing mistake before shipping. There is a disclaimer stating so on most web sites - simply because its rather unlikely that that mis marked peas are going to cost a company $1.6 million (or in one case I know of $6 million in about fifteen minutes - it hit fat wallet).

Oh, I agree with this actually. I mean, they certainly are within their rights to cancel the orders. I could see this being a good marketing thing for them, though- if they are fast with these orders and have lots of happy folks, I imagine they'll have a whole lot of new-but-return-from-this-time customers.

[Dangerosa]

Oh, I agree with this actually. I mean, they certainly are within their rights to cancel the orders. I could see this being a good marketing thing for them, though- if they are fast with these orders and have lots of happy folks, I imagine they'll have a whole lot of new-but-return-from-this-time customers.

They do analysis on the customers after these mistakes happen. These things hit Fat Wallet (or other sites) and its a bunch of first time never see 'em againers who hit the site. Not the loyal customers you want to retain when you make a mistake.

[DiosaBellissima]

They do analysis on the customers after these mistakes happen. These things hit Fat Wallet (or other sites) and its a bunch of first time never see 'em againers who hit the site. Not the loyal customers you want to retain when you make a mistake.

Ah, interesting. Well, there ya go.