Amazon.com and Dynamic Pricing

When is the price of an item not what you thought it was? When a concept known as dynamic pricing is used to set the price.

Dynamic pricing refers to the fluid pricing between buyer and seller. It’s not necessarily a bad thing – many of us have experienced it with eBay.com and Price-line.com. You want something and you’re willing to offer more than the asking price in order to get it. Your demand for the item increases its market value, not only for you but for all other prospective buyers.

But what if you didn’t know that the price you thought was fixed was, in fact, dynamic, but you didn’t find out about the higher price until you went to pay for it.

That’s exactly what is happening “below the radar” on Amazon.com. If you have ever placed books in an Amazon.com shopping cart for more than a day or so, you might be experiencing dynamic pricing firsthand without even knowing about it. It is possible, particularly with certain books, that you might be paying more for those books at checkout than what they were priced when you placed them in the cart.

According to an article published in the Los Angeles Times on January 2, 2007, David Streitfeld, a staff writer for the newspaper, conducted some research of his own during this past holiday season.

In early December, he added a dozen newly published books to his Amazon cart. When he checked his cart a few days later, he found that 9 of the 12 books had increased in price, by an average of approximately 5% per book. A few more days later, just before Christmas, there were several more price increases.

Sean Sundwall, a spokesman for Amazon, told Streitfeld, “Prices change,” but otherwise would not discuss the companies pricing strategies.

Robert M. Weiss, a Chicago lawyer and author of a study of dynamic pricing, told Streitfeld that letting prices fluctuate as if books were stocks had obvious advan-tages to Amazon but might make customers feel manipulated.

In 2000, Amazon.com was found to be charging different prices to different people buying the same DVD, a practice they stopped only after a public outcry.

Caveat emptor. Let the buyer beware. You usually get what you pay for, discounts and all.