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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, Wikimedia
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)

  • 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

Beware! Hackers Are Watching Your Every Move As You Shop Online

Be wary of clicking on emails from unknown sources or deals that look too good to be true.

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Amazon
Cyber criminals use look-alike spam to lure in victims with links to bogus websites. Businesses should train employees on how to "spot a phish". VOA

With more and more Indians going online and generating never-heard-before kind of data, hackers have turned their focus on a country with over 450 million smartphone users and more than 550 million Internet users.

The country has 366 million Internet subscribers in urban locations and 194 million in rural areas, says the latest report by Telecom Regulatory Authority of India (TRAI).

According to Sophos Senior Security Advisor John Shier, organisations are struggling with phishing and other user-focused attacks in India.

hackers
Cyber criminals use look-alike spam to lure in victims with links to bogus websites. Businesses should train employees on how to “spot a phish”.
Pixabay

“Most people don’t believe that computer-based training (CBT) is effective and are looking for ways to improve their defenses against users being tricked into inviting malicious attackers into their network,” Shier said in a statement.

A KPMG report in April revealed that nearly 86 per cent of the consumers in India are concerned about eavesdropping of their conversations or theft or misuse of their messages through their devices.

“The proliferation of connected and IoT devices will have a cross-sector impact on areas around data security and privacy. In response to this, regulators will need to establish mandatory data security requirements,” said Atul Gupta, Leader-IT Advisory and Cyber Security Leader, KPMG in India.

Around 87 per cent of the consumers are concerned that retailers will misuse or improperly distribute their information.

According to Gauri Bajaj, Director, Cybersecurity (APAC), Tata Communications, the adoption of cyber security remains a key challenge.

“The recent spate of cyber attacks only highlight the security risk that takes place both within and without the organisation. It is imperative that employees are sensitised to the risk of security breaches and trained to respond in such a scenario,” Bajaj said.

Not just phones, wearable devices like smartwatches are the next frontier for cyber security.

“The future of wearable tech in the world of AI and predictive technology will be highly individualized, data driven and analytics intensive. One of the bigger applications of this will continue to be in the healthcare and fitness sector.

“However, what is key to make this happen is also building a holistic ecosystem that tracks, guides and designs individualized plans for each individual, at a low cost,” said Vishal Gondal, CEO and founder GOQii.

It isn’t enough to have an IT security team and having a strong culture around security is the next step in maturity for security awareness programmes, say experts.

hackers
According to Sophos Senior Security Advisor John Shier, organisations are struggling with phishing and other user-focused attacks in India. Pixabay

“Use a unique, complex password for banking and other financial online accounts. For others, use a password manager to keep them organised and readily available. Use Two-Factor Authentication (2FA) when available to provide an extra layer of security on accounts,” Shier said.

Be wary of clicking on emails from unknown sources or deals that look too good to be true.

Also Read: Social Media Giant’s CEO Mark Zuckerberg Rejects The Claim ‘Time To Break Up Facebook’

Cyber criminals use look-alike spam to lure in victims with links to bogus websites. Businesses should train employees on how to “spot a phish”.

“Use a layered business security strategy to provide protection at multiple levels to avoid attacks from different angles. Be wary of IoT devices on any network. Change factory default passwords immediately out of the box,” the Sophos executive added. (IANS)