QUESTION: I’m concerned that unscrupulous sellers on Amazon Marketplace might scam Marketplace vendors who automatically reprice their inventory to meet the lowest price.
For example, assume the market price for a specific textbook is $80, but student X doesn’t want to pay that much. He knows about automatic repricing, so Student X offers to SELL the book on Amazon for $45, even though he doesn’t have a copy. He waits for the automatic repricers to match his price, then he buys it cheap. It seems like this could be just the sort of “insider tip” that could spread like wildfire across college campuses.
ANSWER: I think this type of thing is already happening and will only increase as more students buy books online. I wouldn’t be surprised if some “real” booksellers are using this technique to see if they can outsmart (or even sabotage) their competition.
There are several ways to avoid this trap. It’s smart for sellers to have a “rule” that any price change over a certain percentage or dollar amount won’t be automatic. Here’s another way to approach it: Set a minimum price for each item, so you’re essentially preventing the price from going below your wholesale price or your target price.
Another safeguard is to eyeball the competing sellers. For example, any time I reprice a book over $20, I check the feedback of the sellers with lower prices. If someone without a track record is lowballing, I’ll ignore that listing.
As third-party repricing software has gotten more sophisticated, they allow you to specify these types of rules. For example, AMan has a “Price Watch” feature which prevents major upward or downward deviations in price. And it has a graduated decline feature where you can specify that your price will be lowered by only by a certain amount.
Kevin O’Brien, who developed AMan, says there’s another perhaps less-common shenanigan some sellers use. The seller will raise their price on a book temporarily, trying to get you to raise your price too. Then they’ll come in at a much lower price, trying to get a quick sale while you’re at an uncompetitive price.
If anyone has more techniques or tools for avoiding these kinds of scams, please add a comment.
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16 Comments
Wow this is an interesting concept; one that never occurred to me. Wouldn’t it be nice if people who think up these kinds of scams would put their “genius” to work actually thinking up things that would help the world instead of scam it?
A couple of months ago I priced a CD 15% lower than the highest priced vendor (the highest price was $99 and I priced mine at $85). I received a very irate email from someone demanding to know why I had priced my CD 15% lower than anyone else’s. I guess maybe I was being “accused” of price scamming. I find that very interesting. At any rate, the fact of my pricing strategy was that I had 3 copies of this CD in my inventory for 8 months and it was not moving so I lowered the price to get it off my shelf.
-Grunchlk
Very interesting articles always – thankyou!
Grunchlk, next time someone starts asking pokey questions just reply:
“does Sears tell Eatons’ their business?”
Has worked for prairie folk in Canada for decades.
I am glad I just have a small inventory of books to divest myself of. It is not my main source of income so I look at 2 things: is it available on Amazon.ca or ChaptersIndigo.ca and what does an Addall search bring up for pricing. I reason that not all people are going to be looking through every on line book seller to find the deal of a lifetime and as one buyer commented “I like to shop through Amazon or Chapters so I know I have their backing”. So as for what the streams of other online bookselling sites are doing – I could care less.
Keep the great articles coming – they are great!
Prairie Pete
The best way to not compete with a computer is to reprice by hand.
When I first started selling, I noticed that there was someone who would keep lowering their price one cent below mine. As an experiment I started lowering my price by about 5% every half an hour, and brought it all the way down from 80$ to 15$.
This person must have had a program that said it would only lower its price to beat a certain percentage or dollar mark under it. However, he obviously did not have a price where it was supposed to not drop below.
Creating an artificial floor price seems to be the best way to go to get people from tampering too drastically with your pricing.
Eric Carlson Ebay Selling Guide
Did it occur to anyone that the student would get bumped of in next to no time if he had to cancel every order that caem insince he wouldn’t be able to deliver?
A waste of web space and marketing paranoia.
Another scam I believe people partake in, at least on half.com, is to place items in shopping carts with no intention to buy – thus removing them, albeit temporarily, from the market and competition. I’ve noticed this on certain very high ranked, fast-selling titles that seem to be stuck a long time in the ‘currently unavailable’ mode only to be available again without having sold. For example, there are 3 books at $10 and 1 at $12. You notice your $10 book along with the others are not available and all of a sudden there is a $9 book available that looks like a great deal compared to the $12 book. That $9 book sells and all the $10 books magically reappear.
I don’t think there is anything wrong with repricing in the hope that autorepricers fall below you.
The people that use autorepricers have the choice to only fall a certain percentage.
If you lowball for the simple reason to buy then go for it. It is not illegal and its not forcing their repricer to do anything they dont want it to do.
I love discussions like these. Know nothing yoyos wasting their time while I make the big bucks.
Hey Anonymous,
Since you are making “big bucks” I’m surprised you have any spare time for reading this. Meanwhile we yoyos have nothing better to do
Steve Weber
I never knew moving 30 penny books a day was big bucks lol
Personally, I find that auto repricers give an unfair advantage to large operations. If anyone, be is a customer or be it another seller, can exploit the weaknesses in these tools, why shouldn’t they? How is this any different than walking into a book sale where books cost a buck and cherry-picking out the items that will resell for 30 times the cost? In both cases, a business-minded person is using his personal knowledge to gain a profit edge over other competitors.
I’ve done this, but not to be malicious. I’ve got an attic full of books and I just want to get rid of them. I price them to appear at the top of the list so they will move. I look at anything I get as found money.
Is “anonymous” the last seriously saying that going to a sale and buying books you know will sell for good money is the same as someone deliberately posting a fraudulent price in order to rip off a bookseller? Hello? Using an autopricing software or service may not be perfect, but how on earth can anyone compare using your knowledge to buy good inventory to committing criminal fraud? Did you even READ the blog?
These jerks who use automatic repricing deserved to be scammed!
What is the best repricing software?
Auto-repricing software is very annoying. Just set what you want to sell it for and leave it, Set & Forget. Surely if everyone is running these programs it will just go to the minimum price set by the seller anyway…
I intend to exploit is as a buyer, list an item:
Condition: Acceptable
Price: 0.01
to get the seller down to their minimum price and then buy it.
LOL.
The practice of auto-repricing may work for books and media, but it is price destruction to no end for sellers in other categories, where price is king. In categories like grocery, everything is (or should be) new condition and there is no motivation to choose a higher priced item due to condition.
I compete with another seller in the grocery category, who sets his auto-repricer to reprice hourly to exactly 98% of the lowest price. His objective is to win the buy box 100% of the time and capture all of the sales. His result is driving the price of a $25 product down to $10.
I am perfectly willing to share the buy box, by matching the low price but not undercutting it. Amazon rotates the buy box for featured sellers at the same price point. But if I do match his price, I only contribute to this seller’s policy of price destruction. I win or share the buy box for an hour, until his 98% price undercutting returns. I have seen this seller’s automated pricing strategy destroy the price of products to below wholesale cost, actually causing him to lose money.
So I have a choice to make as a businessperson: allow the seller to win the buy box at his price 2% below mine, or let him drive the price down to below his cost, punishing him for his senseless behavior. Maybe his accountant will get him to wake up when he realizes he is losing money by lowballing the products he sells.