Amazon accused of pushing customers to spend more
While online retail leviathan Amazon likes to think of itself as ‘the Earth’s most customer-centric company’, the algorithms that help customers to choose the right product at the best price from among dozens of different vendors have been found to give prominence to those items that most benefit its own business.
A recent investigation by ProPublica looked at 250 popular items over a number of weeks to check which ones were picked to appear in the influential ‘buy box’ that presents customers with a suggested purchase. Because Amazon allows other retailers to trade via its platform, the same product could be available from a number of different vendors at a range of price points and featuring disparate shipping costs.
As customers browse the product that interests them, the Amazon algorithm selects an offer to put in the buy box. Naturally, there’s a massive advantage for the retailer of the product in the box because most customers will assume it offers the best value for money and add it to their cart.
Buy box not always the cheapest pick
However, ProPublica’s findings indicate that in almost three-quarters of cases Amazon placed either its own products – or those from companies that pay Amazon to fulfil orders – into the buy box, even if they weren’t always the cheapest.
The investigation showed that if a customer had used the ProPublica list and bought everything recommended by Amazon’s buy box, it would add a 20% premium over and above the same products at the lowest price on the site.
Customers can compare prices using a tool that ranks sellers of the same product by price and shipping. But Amazon apparently builds in an advantage here too by omitting the shipping costs for its own items. While this does offer Amazon Prime members an accurate list, as they’re entitled to ‘free’ shipping as part of their annual membership fee, it’s misleading for many customers.
It pays to shop around
Amazon told ProPublica: ‘With Prime and Super Saver Shipping (which requires no membership and ships orders above $49 for free), the vast majority of our items ordered – 9 out of 10 – can ship for free. The sorting algorithms the article refers to are designed for that 90% of items ordered, where shipping costs do not apply.’
The company insists its algorithm selects products for the buy box based on factors including price, seller rating, proximity to the customer and free delivery. That said, ProPublica’s experiment found that 94% of sellers picked for the buy box despite not having the cheapest listing were either sold by Amazon or by companies paying Amazon. And while it may be coincidental, it’s likely to give shoppers pause for thought.
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