Amazon Selling Question- Crazy Prices

I know this has sort of come up before, like the gallon of milk listed on amazon for $1K or whatever it was, but why are there some things listed with such bizarre prices?

Specifically, this seller has several books that appear to be not at all special listed for $2500.

Is the seller hoping someone will buy by accident? The books don’t seem to be rare, most of them seem to be in print. What is going on?

Extreme wishful thinking by the seller?

The fact that the price ends in “00” might be a clue. Could it be $25.00 entered in a way that didn’t preserve the decimal point?

Even $25.00 seems high – abebooks.com has plenty of copies for less than that.

I sell on Amazon.

Good odds you are right.

But there are also price matching programs, that can do weeeiiird things.

I once saw a el cheapo clock going for $25,000.00.

Weeeiiird things.

I believe that there are software agents you can use that automatically adjust the price based on what other people are selling the same thing for, so that you’re selling for some percentage of the highest price available for your item.

It is also possible for two people selling the same thing to be using these agents.

This is the answer. There are algorithmic price adjustment programs that sometimes go out of control. Here’s a short article on the subject.

or money laundering :smiley:

Thanks for the article. I’m disappointed- I wanted it to me much more sinister, like the money laundering suggestion. Amok algorithms are cool, too, I guess.

Do these algorithms also explain why it is that second-hand copies of books on Amazon are quite often more expensive than brand new copies that are listed on the same page? (It is not that the second hand ones are hardbacks and the new are paperbacks, by the way.)

This now brings up the evil question no one has asked yet…if I want to buy an expensive item on Amazon, can I do the following scenario to take advantage of these out-of-control automated algorithms?..Let’s assume I want to buy a very expensive $5,000 watch for the purpose of this exercise.

  1. Find the $5000 watch I want to buy, which is expensive but somewhat common such that there are several sellers as might be the case with a Rolex, Cartier, or other high end brand.

  2. Set myself up as a seller on Amazon, copy their basic ad, and say I have the watch for sale new for $50.00, but it is “out of stock - no longer available at this price”.

  3. Keep an eye on the watch and wait for the automatic algorithms to shift their price to one close to my fake price of $50.00.

  4. Buy the watch from a reputable retailer for the $50.00-ish price and raise high holy Hell if they won’t honor it.

  5. Remove my listing from Amazon and explain if anyone asks, I am a new seller and accidentally screwed up putting a decimal point in the wrong place in my listing. I meant to put $5000, but instead put $50, but since it was “out of stock - no longer available at this price”, there is no harm done since no one bought from my shop. Sorry about that.

  6. Prices now stabilize back around $5000 for the watch and no one is the wiser (other than the pissed off vendor who had to honor my $50 watch purchase). I repeat this periodically with other expensive retail items from time to time when they are popular and sold by lots of vendors who are likely using these same algorithms.

One would hope the algorithms have some kind of minimum floor price close to what the vendor purchased the watch for where they would stop, but the world is full or a lot of lazy programmers and a lot of retailers looking for low price algorithms… Even if I could use this to drop the price of my desired watch to the floor price of say $4000, wouldn’t this still be worth it assuming I was in the market for this watch anyway?

For the record, I have no intent of trying this out. It is more an exercise in curiousity…

That’s the kind of villainy I was hoping for, Yarster.

I’m sure it could happen. A programmer or retailer would think there is no way someone could sell for less than the dealer price they paid.

Of course if the price-matching algorithms are doing their job they shouldn’t consider a price on an out-of-stock item.

Besides, I think it is well established that published prices are an “invitation to treat”, not an offer to sell, so the seller is under no legal obligation to sell a $5000 item for $50, just because of a mistaken Amazon listing.

I don’t think that avoiding the scorn of some guy who’s obviously trying to get away with something is worth $4950 to any online retailer.

control-z - I don’t know if I agree with that. Remember that we are talking about potentially thousands of retailers with possibly hundreds of thousands of items for sale. My $5000 watch example is but one transaction. Each retailer wants to move volume so they might still want to consider the fact that an out of stock item just means “the item likely sold at that price, which is why that retailer is out of stock”, so it might tell them they don’t want to be BELOW that price, but they probably don’t want to ignore it entirely from an automated algorithm standpoint.

I can imagine a situation where you might want to do an average of all the current prices (including those that are out of stock) to set your price, so that one or two low priced vendors don’t set your price too low among the dozens that are selling it at a higher price. Even with my original evil scheme, however, I could still get myself a hefty discount using these algorithms and my fake $50 pirce point. Depending on how devious I wanted to be with Amazon (although it would make my “whoops, I put the decimal in the wrong place story” an obvious fake), I could open multiple “out of stock” sites and price some of them at $0.01 to really drive the prices down with these algorithms and get a bargain.

leahcim - fair enough, but of course I am using an exaggerated example to make a point. The type of retailer who would resort to using these algorithms are likely those that have way too many items for sale to track individually, so they use these tools to automate the pricing process, like the story about the fly book the other poster shared.

To some degree, they might be forced to honor a price their own faulty algorithm used because Amazon isn’t going to take too kindly to them going through transactions after the fact and saying “Hey Bob, we don’t make enough profit on these sales, so just tell the purchasers we aren’t going to honor their transactions”. You screw enough legitimate purchasers on things like that and you are very quickly going to have your on-line reputation in the toilet and likely going to get thrown off Amazon. Remember, the whole reason they are using the algorithms to begin with is that they are heavy volume retailers, so no one wants to risk their entire business…

But o.k. fine. What if I make my price $4000, and still say it is out of stock. Let’s also assume that $4000 is the wholesale price, and your automated algorithm priced your watch at $4050 instead of the usual $5000. Are you still going to deny my transaction when it was your own algorithm that screwed you and you are still making a profit (albeit a $50 one instead of the usual $1000 you should make?). Again, assume I was in the market for a $5000 watch, and just wanted a way to get it substantially cheaper…

I’ve done some consulting/programming for adaptive pricing and this is one of the basic attempts to game the system that we dealt with. The easiest solution is that we simply ignored values from both ends of the price curve. Your $50.00 watch and ACME’s $25,000 identical timepiece were just never considered in the equation. The official reason is that they were most likely typogaphical/decimal slide errors… :wink:

Right. That’s why two posts up, I suggested using MULTIPLE fake accounts. So now there is one for $49.50 and one for $50.00. You throw out my $49.50 one, and now where are you?

That was the simple solution for the simple problem. I’m not able to go into any great detail because of the NDA but the final solution had no more trouble with a thousand fake accounts than the previous post would have with one account. That was also years ago so I have no doubt that it’s been updated and tweaked since then.

All that said, you still wouldn’t be able to game a price below the cost + x% requirement. So if the seller decided that x was 10 for that particular class of product you would never be able to pull the price below 4400.

Seemingly ridiculously low prices aren’t always so ridiculous.

My sister in law shops estate sales in Beverly Hills, Bel Air, Hollywood, etc.

She says its not unusual to find brand new items at these sales that would retail at say $500. for only $50. She goes home and finds the same item for about $400. on Amazon. She then lists the item at a “ridiculously” low price of $250 and quickly sells it.