Amazon to Let Shoppers Bargain for Lower Prices with New “Make an Offer” Option(techcrunch.com)
techcrunch.com
Amazon to Let Shoppers Bargain for Lower Prices with New “Make an Offer” Option
http://techcrunch.com/2014/12/09/amazon-to-let-shoppers-bargain-for-lower-prices-with-new-make-an-offer-option/
16 comments
All the appeal of buying a car at a used car dealership brought to ecommerce.
i'm imagining someday well into the future (about 9 months from now) i'll surf to Amazon.com and, click around until i find what i'm looking for--eg that Disney Frozen merchandise for my daughter's birthday--and add it to my cart, followed by a voice that reminds me of Lilith Sternin-Crane:
LSC: so how much do you want to pay for that
me: $49.99, like it says right next to the item on your Site
LSC: we'll let you have it for $85 and throw in free one week shipping
me: that's unethical
LSC: okay $80 and thanks for the compliment.
me: look, $55 is all i can afford to pay, that's all i have on me, i swear--so take it or leave it.
LSC: unlikely, in fact almost impossible--let's see, your median cumulative Amazon purchases by month for the past 24 months is just under $450; plus you have a cumulative balance of $216.34 on three Amazon gift cards in your name. You must be doing pretty well, sir.
me: i'm just a programmer--overworked and underpaid, etc.
LSC: yes we know. Now let's see...according to your shipping address and zip code, you live in...downtown Palo Alto!
me: well yes, but towards the dodgy end.
LSC: no you don't. So the median household income in your neighborhood is....
me: no idea where that figure came from, anyway, you can't tell my salary based on a neighborhood average.
LSC: well technically i could...but why should i in this case when i know your exactly how much you earn.
me: you're lying
LSC: you'll regret that. how's this for lying...remember about six months ago when you, persuaded by the 10% off the total in your shopping cart we promised, you clicked on our Amazon credit card offer and filled out the application right before you checked-out--giving us access to your entire credit history...
me: oh god
LSC: tell you what, i'll let you have it for $90, you pay for the one-day shiping and sign your family up for Amazon triple prime, and we'll say good night. Deal?
me: oh god
LSC: what's the problem? you soulnd depressed.
LSC: so how much do you want to pay for that
me: $49.99, like it says right next to the item on your Site
LSC: we'll let you have it for $85 and throw in free one week shipping
me: that's unethical
LSC: okay $80 and thanks for the compliment.
me: look, $55 is all i can afford to pay, that's all i have on me, i swear--so take it or leave it.
LSC: unlikely, in fact almost impossible--let's see, your median cumulative Amazon purchases by month for the past 24 months is just under $450; plus you have a cumulative balance of $216.34 on three Amazon gift cards in your name. You must be doing pretty well, sir.
me: i'm just a programmer--overworked and underpaid, etc.
LSC: yes we know. Now let's see...according to your shipping address and zip code, you live in...downtown Palo Alto!
me: well yes, but towards the dodgy end.
LSC: no you don't. So the median household income in your neighborhood is....
me: no idea where that figure came from, anyway, you can't tell my salary based on a neighborhood average.
LSC: well technically i could...but why should i in this case when i know your exactly how much you earn.
me: you're lying
LSC: you'll regret that. how's this for lying...remember about six months ago when you, persuaded by the 10% off the total in your shopping cart we promised, you clicked on our Amazon credit card offer and filled out the application right before you checked-out--giving us access to your entire credit history...
me: oh god
LSC: tell you what, i'll let you have it for $90, you pay for the one-day shiping and sign your family up for Amazon triple prime, and we'll say good night. Deal?
me: oh god
LSC: what's the problem? you soulnd depressed.
Oh please no. I hate haggling. My time shouldn't be spent worryin if I left 10% on the table. This is the reason Amazon is killing eBay, and now they to introduce the same tired tactics.
Yeah. I really dislike the "not sold by Amazon" stuff, complete with seller ratings. I really don't want to have to comparison shop sellers and choose the one least likely to fuck up my order. I just want to order from Amazon, who I know won't give me hassle.
I love it. I buy a lot of used blu-ray discs for $0.01 or $0.99, with the $2.99 or $3.99 shipping fee of course to compensate for the overly low price. Ultimately I find incredible bargains versus paying $12-$20 for the same disc new. The ratings make it easy to find sellers that are reputable to buy used discs from. I also personally find this to be far less chaotic than digging through eBay.
I do the same with books and vidoegames.
The ones that are shipped from an Amazon warehouse are usually not bad. It's less likely to be screwed up at that point. I noticed that ebay is now allowing you to send your items to their warehouse in the same fashion.
So amazon is borrowing from ebay and ebay is borrowing from amazon.
So amazon is borrowing from ebay and ebay is borrowing from amazon.
Pretty much this, I almost always buy stuff sold by amazon, even if it's a slightly higher price.
Haggling for stuff you want can be really fun, haggling for stuff you need is usually horrible, especially if the seller realises how much you need it.
> Haggling for stuff you want can be really fun
This is a personality... um... "quirk" on your part.
This is a personality... um... "quirk" on your part.
Not really, it's probably culturally dependent. Haggling is common in lots of places. Even here in my western European country, where it's mostly gone, I know many people who enjoy it and proudly display their deals. Then again, the salesman in Tintin is from my country ;)
It's not that different from playing poker, it's just more informal.
It's not that different from playing poker, it's just more informal.
I will make them an offer they can not refuse
> Importantly, this gives also buyers somewhat more transparency on pricing
How? I'd try raising prices and allow offers, hoping that most customers don't even try to bargain for a lower price.
How? I'd try raising prices and allow offers, hoping that most customers don't even try to bargain for a lower price.
It appears that at lest so far, this only applies to collectible items; the kind of thing you might be more likely to sell on eBay than on Amazon, or perhaps offer for sale on Amazon so that it will show up on searches, but then do the haggling offline once you've found an item you're interested in.
Adding the "Make and Offer" button for these kinds of items could increase transparency, as it keeps Amazon in the loop and all of their standard policies apply like free shipping, so you won't get into situations where you go offline, negotiate a price, then get hit by hidden shipping fees or something of the sort.
Adding the "Make and Offer" button for these kinds of items could increase transparency, as it keeps Amazon in the loop and all of their standard policies apply like free shipping, so you won't get into situations where you go offline, negotiate a price, then get hit by hidden shipping fees or something of the sort.
But then you competitor will show up higher in the list on sort by price.
Sure, that's something you would have to experiment with. But I still don't get the "transparency" argument.
How is it more transparent to have products in your store where one customer pays the full price, another one pays 5% less and someone else pays 10% less.
How is it more transparent to have products in your store where one customer pays the full price, another one pays 5% less and someone else pays 10% less.
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Great. Prices going up for everybody. Did they hire Ron Johnson?
http://mobile.businessweek.com/articles/2013-04-10/lessons-f...
http://mobile.businessweek.com/articles/2013-04-10/lessons-f...
If they expanded this to general products (and in the UK) this could kill my usage of Flubit. I regularly get 10% or more off Amazon stuff through them, but their delivery is nowhere near as reliable.
All of the personal and my business purchases in the last year for me (running into 6 figures) have been thru' Amazon
Their system is simply much nicer to use and their support is great, even when buying from 3rd party merchants on their platform. There were cases where something wouldn't work (example a phone a month ago) and i was refunded first and then given several weeks to return the broken phone!
Best of all I no longer have to deal with Paypal and their whims or worry about being scammed on their Ebay site. Hell now that I think of it I have barely used paypal in the last year.
Also I can buy giftcards at 3% discount on the likes of gyft.com (10% last black friday weekend) with bitcoin. Amazon sort of indirectly accept bitcoin via their giftcards which is fantastic + discount on top. And of course the Prime programme is great with free deliveries.
I hate the way on Ebay something is listed with a low price but by time you get to checkout mysterious high delivery fees appear, that in my opionin is sneaky. Neither is their 90s interface nice or user friendly to use.
edit: wow i sound like i got brainwashed by Amazon lol! Oh well one happy customer here :)
Their system is simply much nicer to use and their support is great, even when buying from 3rd party merchants on their platform. There were cases where something wouldn't work (example a phone a month ago) and i was refunded first and then given several weeks to return the broken phone!
Best of all I no longer have to deal with Paypal and their whims or worry about being scammed on their Ebay site. Hell now that I think of it I have barely used paypal in the last year.
Also I can buy giftcards at 3% discount on the likes of gyft.com (10% last black friday weekend) with bitcoin. Amazon sort of indirectly accept bitcoin via their giftcards which is fantastic + discount on top. And of course the Prime programme is great with free deliveries.
I hate the way on Ebay something is listed with a low price but by time you get to checkout mysterious high delivery fees appear, that in my opionin is sneaky. Neither is their 90s interface nice or user friendly to use.
edit: wow i sound like i got brainwashed by Amazon lol! Oh well one happy customer here :)
Given that Amazon takes already ~15% off end-price of most items and the competition is pushing most margins to <5% territory, I wish them good luck having any sort of success on "Make an Offer". Probably good only for slow-sellers or used items...
It sounds like they're expecting this to mostly apply to items where there isn't much seller competition, which I'd agree with. If you're selling the same thing as a bunch of other people, you're already in a price game as far as an Amazon shopper is concerned, so it doesn't seem like it would make sense to use the make an offer option. People would just lowball all of the sellers and see who comes back with the best counter. That would be a hassle for all parties, but more for the sellers than buyers because they're now responding to n times more traffic in order to secure the same number of sales.
Does this apply only to amazon.com or amazon.in too??
I don't think it's going to roll out on amazon.in until they experiment with the model extensively in US.
That said, it's something that may work better in some cultures rather than others. (Not to pigeonhole Indian culture; I mean completely in general.)
Maybe I'm weird, but I feel slightly offended if a vendor is not offering their lowest price to begin with. A lower price from a different vendor doesn't bother me, but knowing that someone else can pay a lower price for the same product from the same vendor just irks me a little. Especially in these times of fierce pricing competition. It just feels disingenuous.
Of course, this is just from this consumer's point of view. I can see the added value to the vendor, but since I'm only a consumer, it is only the consumers' perspective that affects me.
Of course, this is just from this consumer's point of view. I can see the added value to the vendor, but since I'm only a consumer, it is only the consumers' perspective that affects me.
Well here's the thing, you're both suffering from imperfect information. If the merchant knew exactly how much you're willing to pay (as well as every other customer) and how his competitors would react to the prices he sets, then he could set his prices perfectly. But he doesn't, so he has to build in a margin which includes things like lower-than-expected sales, returns, and the possible changes in prices from competitors. This all combines to make his advertised price higher than one where he knew the future perfectly.
Now the information imbalance in a haggling situation is a bit different. He doesn't have to advertise the price he gives you, and so can worrying less about how his price will influence his competitors, and he knows at exactly what price he will make a sale. Just like with car dealers, if it's late in the month or year he might need to just move inventory and sell at cost. He has more confidence in your behavior so he can use his own operational information more effectively.
If you want to know more I suggest reading up on "Imperfect Information Market Failure." It's a pretty fundamental thing in economics.
Now the information imbalance in a haggling situation is a bit different. He doesn't have to advertise the price he gives you, and so can worrying less about how his price will influence his competitors, and he knows at exactly what price he will make a sale. Just like with car dealers, if it's late in the month or year he might need to just move inventory and sell at cost. He has more confidence in your behavior so he can use his own operational information more effectively.
If you want to know more I suggest reading up on "Imperfect Information Market Failure." It's a pretty fundamental thing in economics.
The merchandise involved (http://www.amazon.com/makeanoffer) appears to be art and memorabilia, which tends to not have a set value. There's no absolute market price, so there's no sense of an absolute above-market price.
That makes sense. But this quote from the article made me think that they may leave it open as an option for other types of vendors: "and for sellers looking to communicate and negotiate directly with customers in an online marketplace environment just like they do normally in their own physical store or gallery"
> just like they do normally in their own physical store or gallery
> physical store
> Maybe I'm weird, but I feel slightly offended if a vendor is not offering their lowest price to begin with
Just to flip this around, should your boss be offended if they're not paying you the lowest amount you'd be willing to work for?
Just to flip this around, should your boss be offended if they're not paying you the lowest amount you'd be willing to work for?
In my experience they do attempt to pay you the lowest amount you're willing to work for. I managed to negotiation a 43% increase at one point. That tells me they were never paying based on the value I bring. Had I not threatened to leave I would still be making 43% less.
Yes, if I'm doing the exact same job for thousands of other people who may be paying less.
In many situations the actual cost to a vendor does fluctuate over time, but continuously updating prices has costs that outweigh the upside demand and perhaps brand loyalty that comes from transparency. Some example costs include (a) customer frustration from unpredictable prices and (b) consumers deterring purchasing decisions waiting for prices to reach some threshold they are hoping will arrive one day.
I feel like Steam, although the practice is successful for them, is pushing all consumerism in this direction. I defer all my gaming purchases until they come on sale on Steam. I can't help it, by this point I have been trained to act this way. So much so, that is almost Pavlonian.
I'm certainly in the (b) category. I don't have to have most things right away. I have a list of things that check pricing on frequently, and when the price is right, I buy. Sometimes I never buy because the price never meets the threshold. Of course, that's only for things I desire, and don't necessarily need.
Of course, as morley pointed out in a separate reply, this seems like it may only be limited to art and memorabilia, which tend not to have a set value. If limited to these types of items, then Amazon's approach may make sense.
Of course, as morley pointed out in a separate reply, this seems like it may only be limited to art and memorabilia, which tend not to have a set value. If limited to these types of items, then Amazon's approach may make sense.
Try a holiday in India, Nepal or Morocco. Nothing has a set price. Its annoying at first, but after a while you may appreciate that you pay for what you value, not paying based on some price set by someone else.
Or if you're American and want to try it closer to home, buy some tickets from a scalper.
I've done price matching with different vendors before (physical stores). Now if my preferred vendor is having it a higher price than another vendor, amazon makes it easier for me to ask for a price match.
Makes sense. Another great use case that I didn't think of.
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It makes sense to offer discounts via this kind of thing if the customer needs multiple of something since there are usually a lot of fixed per order costs.
They've also just started including external websites such as Dell.com to be listed right at their offers. Note, that this will take you to the external website and not go though Amzons checkout:
http://www.amazon.com/gp/offer-listing/B00I053ICY/sr=8-1/qid...
You can see that it sends you to Dell's website.
http://www.amazon.com/gp/offer-listing/B00I053ICY/sr=8-1/qid...
You can see that it sends you to Dell's website.
This could get really interesting if they extend it to all of their products. It's not just about what margin should Amazon take on this product, it's what margin should Amazon take on the entire basket, and what margin should Amazon take on this customer right now, given the customer's shopping history with Amazon and the potential future purchases.
The nice people working the registers at Target or Walmart have no authority to haggle with me, even if I wanted to do so. If there was an algorithm behind the scenes, either online or flat-out at the register, maybe haggling could make a comeback with big merchants.
The nice people working the registers at Target or Walmart have no authority to haggle with me, even if I wanted to do so. If there was an algorithm behind the scenes, either online or flat-out at the register, maybe haggling could make a comeback with big merchants.
That's a future that sounds horrible to me. It's injecting yet another layer of uncertainty into the process of acquiring goods. I already feel like I'm being ripped off all the time. With this model unless I do the hard work of bargaining I _know_ I'm being ripped off.
Great.
No thanks.
Great.
No thanks.
Its more or less the same model ebay has. Funnily enough, I rarely ever buy stuff from ebay that isn't on a fixed price with the "buy now" option.
If you agree to buy an item at an understood price, why do you feel like you're being ripped off?
Isn't fairness of price decided by the property owner that is offering their property up for sale? That is, they're deciding what it's worth to them, what is fair to them, such that they'd care to part with their property.
Isn't fairness of price decided by the property owner that is offering their property up for sale? That is, they're deciding what it's worth to them, what is fair to them, such that they'd care to part with their property.
Because people have only so much cognitive load, adding to that to the list of things they would have to do on a daily basis is simply daunting.
This just seems like another way to rip off people who don't know better and are disadvantaged; imagine the haggling difference at the poor shops vs the rich shops. The rich person may be able to afford the extra cash and you may think the poor person would be incentive to haggle harder, but the rich can also afford to leave to go to another shop with the car they own instead of spend another hour on the bus to get to another place. They can also afford to be informed of the prices.
This just seems like another way to rip off people who don't know better and are disadvantaged; imagine the haggling difference at the poor shops vs the rich shops. The rich person may be able to afford the extra cash and you may think the poor person would be incentive to haggle harder, but the rich can also afford to leave to go to another shop with the car they own instead of spend another hour on the bus to get to another place. They can also afford to be informed of the prices.
It's a fair point certainly, in regards to poor shoppers. Most American consumers aren't poor, have Internet access and can easily compare prices, and most of Amazon's customers also are not poor.
In fact today it's extraordinarily trivial for the average person in the US (Amazon's core demographic still) to price compare. It takes seconds via Google or directly via Amazon.com or Walmart.com etc.
I don't believe price comparison is daunting or overload, for the same people capable of consuming hundreds of status updates on social networks ever day. In fact, the history of the American consumer indicates price comparison is extremely easy and natural, said shopper has been price comparing and seeking out deals since the birth of modern shopping.
In fact today it's extraordinarily trivial for the average person in the US (Amazon's core demographic still) to price compare. It takes seconds via Google or directly via Amazon.com or Walmart.com etc.
I don't believe price comparison is daunting or overload, for the same people capable of consuming hundreds of status updates on social networks ever day. In fact, the history of the American consumer indicates price comparison is extremely easy and natural, said shopper has been price comparing and seeking out deals since the birth of modern shopping.
It's like haggling at a market. I hate it. I know the price the seller first tells me is too much, and I have to waste my time arguing and heckling to get it down.
It's close to a feature I've been waiting for, which is "Buy When Price Drops To...". I want to enter a price and go ahead and let them ship the item to me when it hits that price.
There's a lot of items whose value tends to go down over time, or are virtually guaranteed to go on sale, and they can price-segment me to their hearts content on them if they'd just let me enter the price I'm willing to buy at. You'd think that this signal would have significant value to them. I mean, I get the counter arguments too, but it still seems like they could work some selling magic on this and win back the profit in the end.
Pieces of this are there; Subscribe and Save lets you save money if you pre-commit (sorta, it's easy to drop out of) to buying certain items, and now this "Make an Offer" option... they seem to be working their way up to this, why not go all the way...?
There's a lot of items whose value tends to go down over time, or are virtually guaranteed to go on sale, and they can price-segment me to their hearts content on them if they'd just let me enter the price I'm willing to buy at. You'd think that this signal would have significant value to them. I mean, I get the counter arguments too, but it still seems like they could work some selling magic on this and win back the profit in the end.
Pieces of this are there; Subscribe and Save lets you save money if you pre-commit (sorta, it's easy to drop out of) to buying certain items, and now this "Make an Offer" option... they seem to be working their way up to this, why not go all the way...?
I doubt they would do this as it would reduce their already razor thin margins. And there is little incentive for them. I don't think many people would be willing to shop like that either, since the mindset of a purchase like that is sort of the anti-Prime - "just let it arrive whenever", as opposed guaranteed 2 day air. Long story short I just don't see that as a very Amazon-like move. That said, I would probably use it once or twice a year if such a feature existed.
Not fully automated, but http://camelcamelcamel.com/ will send you notifications
I'm a developer at a company called PriceWaiter[1] that provides a similar “Make an Offer” service to existing eCommerce stores. Our API allows retailers to add a button to any product on their site to get offers from customers.
We welcome Amazon into this space, and are really glad to see this idea catching on.
Check out our developer docs and integration plugins[2], or feel free to ask any questions you have here.
[1] https://www.pricewaiter.com/
[2] https://docs.pricewaiter.com/
We welcome Amazon into this space, and are really glad to see this idea catching on.
Check out our developer docs and integration plugins[2], or feel free to ask any questions you have here.
[1] https://www.pricewaiter.com/
[2] https://docs.pricewaiter.com/