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Online Shopping Giant Amazon makes Customers pay more for Popular items

At least 94 percent of sellers who won the buy box placement without having the cheapest listing were either sold by Amazon itself or companies paying Amazon

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Amazon insists that its algorithm chooses products to go into the buy box based on a range of factors, including customer service and free delivery
When customers search for and click on a product, the Amazon algorithm chooses one vendor’s offer to put in the buy box
Having the product in this buy box offers a major advantage for the retailer, as most customers end up adding it to the cart and buying it
Sept 21, 2016: The online shopping portal Amazon’s algorithms make customers pay more for popular products giving prominence to items that benefit the retail giant, a study by ProPublica said.
ProPublica on Tuesday said it reviewed 250 frequently purchased products over several weeks to see what all were chosen to appear in the highly-priced ‘buy box’ that pops up first as a suggested purchase.
Amazon that bills itself as the “Earth’s most customer-centric company”, not only sells products directly itself, but also allows other retailers to sell their own products through its platform.

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This means that the same product could be offered by dozens of vendors at different prices and with different shipping costs.

When customers search for and click on a product, the Amazon algorithm chooses one vendor’s offer to put in the buy box.
Having the product in this buy box offers a major advantage for the retailer, as most customers end up adding it to the cart and buying it.
ProPublica found that almost three-quarters of the time Amazon would place its own products or those from companies that pay Amazon to fulfil orders into the buy box, even though they might not always be the cheapest.

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If a customer bought everything recommended by Amazon’s buy box they would end up paying 20 percent more than if the same products was bought at the lowest price on the platform, the study said.

Amazon, however, offers a tool to allow customers to compare product prices by producing a list that ranks sellers of the same item by “price and shipping”.
ProPublica. Wikimedia
ProPublica. Wikimedia
Although even there, the company gives itself an advantage by omitting the shipping costs for its own products.
This would mean the rankings were accurate for Amazon Prime members, who get unlimited ‘free’ shipping for $99 per year, but for anyone else the ranking is misleading.
Amazon insists that its algorithm chooses products to go into the buy box based on a range of factors, including customer service and free delivery.
Amazon founder and Chief Executive Officer (CEO) Jeff Bezos had said in 2007 that it uses “very objective customer-centred algorithms” to automatically award the buy box to the lowest priced seller, which is clearly no longer the case.
At least 94 percent of sellers who won the buy box placement without having the cheapest listing were either sold by Amazon itself or companies paying Amazon.
The companies that do not pay Amazon hefty fees (between 10-20 percent of sales) to fulfil orders, find themselves sidelined.
ProPublica concluded that it shows how hidden algorithms govern online interaction from Google search results to Facebook news feeds. (IANS)
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Copyright 2016 NewsGram

  • Manthra koliyer

    This is just one of the tricks that the online websites use!

  • ucscalum

    You mean Amazon wants to be profitable? How shocking!

Next Story

Musicians can now post Twitter-like updates on Google Search

Musicians can also get the "Blue Tick" that would verify that the posts are truly from the artist

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Google to introduce twitter-like updates to the artists. Wikimedia Commons
Tenor is an online GIF platform. Wikimedia Commons
  • Twitter’s popularity is facing a risk
  • Google will now allow musicians to post updates directly
  • The updates can be seen on the Search result pages

In what could damage Twitter’s popularity, Google is now allowing US musicians to post updates directly to its Search result pages.

This update is an expansion of the “Posts on Google” feature that the company first rolled out for big companies and celebrities in 2016, and included local businesses last year, The Verge reported.

This update can potentially damage Twitter's popularity. Wikimedia Commons
This update can potentially damage Twitter’s popularity. Wikimedia Commons

The updates would show up inside musicians “Knowledge Panel” — a card that pops up and displays information when a user searches for famous people in Google Search.

Any musician, whose search result has a Knowledge Panel, meets the criteria to post the updates in the form of images, videos, GIFs and text.

Also Read: Twitter rolls out Bookmarks feature globally

When a user searches for a musician, Google automatically generates content like YouTube videos and biographical information.

These posts would show alongside that information of the musician. Musicians can also get the “Blue Tick” that would verify that the posts are truly from the artist. IANS