Amazon changes item's price 8 times in a day

The company alters its pricing more in a few hours than Best Buy and Wal-Mart do over an entire month.

By MSN Money Partner Aug 1, 2014 1:41PM
Credit: © Armin Weigel/dpa/Corbis

Caption: The Amazon.com home page seen on a tabletBy Hayley Peterson, Business Insider

Amazon (AMZN) changes prices on its millions of products throughout the day.


Sometimes, that means altering the price of a single item several times over the course of 24 hours, according to a new report. 


The report cited one case where the e-commerce giant changed the price of a wireless internet router eight times in one day. The price of the router fluctuated between $185 and $200, as shown in the graph below.


Amazon bases many of its price changes on the actions of competitors. 


"What Amazon aspires to be is the fastest follower of the price leader," said Jenn Markey, the vice president of marketing for 360pi, the price intelligence firm that authored the report. 

Amazon has been estimated to alter its prices more than 2.5 million times daily. By comparison, retailers such as Best Buy (BBY) and Wal-Mart (WMT) make roughly 50,000 price changes over the course of an entire month.


The 360pi report estimates that Amazon changes the prices of 15 percent to 20 percent of its inventory daily. 


The retailer's price activity can depend on the product, Markey said.


"Amazon has already secured significant share in electronics and enjoys popular perception of being the price leader, which generally translates to fewer price changes for products in this category," she said.  "The opposite would apply to home renovation products today, a category that Amazon appears to be targeting for share growth."


Amazon also makes price changes according to the time of day when consumers are most likely to be shopping for a particular category.


"For example, there are more frequent price changes for video games in the evening than daytime," she said.


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21Comments
Aug 1, 2014 4:57PM
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Amazon is so big it can get away with just about anything....... I don't like them raising the pricing linit on free shipping....Prime doesn't cover everything either so look around, I do and lots of time I beat their pricing...... I do like them though. 
Aug 1, 2014 3:27PM
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Amazon has garnered a large group of faithful shoppers who will not question the pricing on the site, assuming its going to be the best price on the web, and don't want to deal with hassle of finding a new vendor and setting up an account there.  However, there are also shoppers who aren't afraid to wander out into the internetsphere to find the truly great deals on some products.  "Lets go surfing now, everybody's learning how, come on safari with me!"  I am an "Amazon" newbie.  Up until now, I  have always found what I wanted at a better price elsewhere than Amazon.  However, just yesterday we found we needed a particular part for our refrigerator and Amazon was by a significant amount cheaper than anything else we found.  So, we took the plunge and now we Amazon too!  Won't argue that Amazon has good prices, however it is not the go-to-all-the-time store some would like to make it out to be.  If its your bag to shop Amazon, go for it.  My money is too valuable to me to just assume I'm getting the best deal from any store and I will shop, shop, shop until I can get the best price available at the time!  And, the best shipping price as well.  Too many times you see a super cheap price on something and get nailed big time in the shipping and handling.  Happy shopping, ya'll:<)
Aug 1, 2014 3:20PM
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So what. Wait until the price goes down. The article's headline implies that Amazon is gouging customers. NOT !!!!!!
Aug 1, 2014 4:42PM
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This sucks! It's just like buying airlines tickets; airlines ticket price changes all the time, based on demand. This hr it is $350, the next hr it flips to $650! You'll have to play the game and spend tons of time checking the sites to keep track of the price, if you really desperate in getting a low price, plus those annoying "the best day and times for low price" crap. Consumers spending (or wasting) valuable time on their sites. That's what they want: they want consumers to always stay on their sites.

I've stopped shopping at Amazon long time ago, because there are already many other online retailers offering comparable prices. Amazon, you're not the king. Other online retailers are offering similar or even cheaper price than you. For airlines ticket, I've no choice but to  tolerate those crap to get the low price (cuz airline ticket is not cheap). But for simple electronic things, I can go other online retailers for the same price or even cheaper and don't have to spend unnecessary time on Amazon site. This type of tactic is annoying.

Aug 2, 2014 7:34PM
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Amazon is moving toward the airline ticket model, where even your activity in looking at prices for a particular flight can cause the price to go up, if you go back and check the price over and over. Algorithms conclude this means a lot of people are interested in the product, and raises the price. This is wrong on so many levels.
Aug 12, 2014 2:04PM
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Amazon is a joke, I have never been so insulted by a CSR in my 46 years on this planet. After returning an item that was purchased from Amazon I never received my $478.98 refund. After contacting them 7 times I was told that they had received the confirmation number for the refund and that I needed to stop harassing the company or they would pursue legal action. After contacting the credit card company they confirmed that the money had not been returned and contacted Amazon on my behalf, they were informed that the money had infact been returned (they supplied the confirmation number that they had "received" from the card company and given me as proof of the refund, the card company had no such number in there system) and informed Mastercard that they were going to file suit if we didn't admit that I was lying. After 6 months of fighting and threats I contacted an attorney and supplied him with copies of all the correspondence including the threats to myself as well as Mastercard, the only response he received  was a CSR laughing at him on the phone for "pretending" to be a lawyer. 2 days after my attorney filed charges I received a check in the mail for the total amount, no apology or explanation as to why I was finally payed. Luckily my attorney had enough evidence to proceed and after almost a year i was awarded $150,000 for the "shameful"display and a written letter of apology from Jeff Bezos. Needless to say if they are willing to spit in your face and threaten you, you might want to take your business elsewhere. 
Aug 1, 2014 3:59PM
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Lately I notice this change too.  I hate it because it is not always good for me.
According to the graph, you say I should buy my item between the hour of 8 and 15, or it is not predictable?
Aug 1, 2014 3:49PM
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I would like to know if overall, the prices generally decrease as they change over the course of 24 hours.  If so, then YIPEEE.  Maybe one should shop in the afternoon and evening.   I am a devout Amazon shopper.  I find most items for less on Amazon and I don't pay for shipping, ever. 

Also, the selection is large compared to most brick and mortar stores.  I can trust their customer service and that has intrinsic value. 

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I've seen this alot. It's usually before i buy something or after. I've just learned to buy it if i think it's a good price before it could go up again. after the last few screwups i'm going back to shopping local for large items or i only buy from 3rd parties, the fulfillment centers are filled with people who can't read the orders.
Aug 11, 2014 2:25AM
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as a retailer on Amazon, we monitor prices all day. The Amazon consumer will first pick the lowest price, check feedback then click. Dynamic pricing is the ultimate marketplace for supply and demand. Sometimes, we are not the lowest because our costs doesn't allow it. However, when Amazon decides to dominate a market or brand, we are OUT! They decide what products, brands, and even fulfillment gets the top spot.

Amazon customers consistently get great pricing and service. We, as vendors, get customers and do what ever we can to move customers to our websites where even greater discounts are as we do not have to pay Amazon fees.

Aug 1, 2014 4:43PM
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I used  to like amazon's low price free shipping, now it's I have to buy $45 or more products to get a free shipping.  wow, Big Gov. is tackling the taxes.....
Aug 3, 2014 1:07PM
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Nothing but a pariah destroying our civilization. Amazon has yet to turn a profit and make an industry out of destroying everyone else's margins. There are 90 MILLION under and unemployed people in America and that is increasing. The "economy" created by Amazon has amassed more that $1 Quadrillion in global debt instruments-- 14 times greater than America can support. Enjoy that below cost item now, you'll be paying outrageous taxes soon in offset. I'll take free enterprise over global economic failure everyday. It's priceless, Amazon is useless. 
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