More reports on: Marketing

Amazon favoured Prime service customers with easier identification of lowest-priced products: ProPublica

21 September 2016

The 48-per cent of Amazon customers who do not subscribe to its Prime service might not be shown the lowest price for products unless they carefully researched the site, ProPublica reported.

Non-profit news organisation ProPublica, which conducted an investigation published yesterday found that Amazon's price comparison pages favoured goods that were either sold by Amazon or through Amazon's programme for sellers who paid the company to warehouse and ship their products, called "Fulfilled by Amazon."

Amazon's price comparison tool worked for Prime members, most of whom who paid $99 a year for free shipping and other perks, as also for people ordering over $49 worth of products who got free shipping.

However, for the rest of Amazon's customers, Amazon's price comparison ranking did not necessarily result in the lowest prices coming up first, which necessitated labourious drilling down into the search results to get the best deals, ProPublica found.

In case of the 250 commonly bought products that ProPublica analysed over several weeks, about 75 per cent of the time, the ''buy box'' featured Amazon products or those sold by companies that paid Amazon to store and fulfill their orders.

Non-Prime customers with orders under $49, could still find the best prices but the process involved clicking through on multiple options to conduct a true cost comparison.

That was because the rankings displayed on Amazon's price-comparison pages showed full price (cost + shipping) for items sold by third-party merchants.

But the price of items from Amazon or third-party merchants who are part of Fulfilled by Amazon were ranked without the cost of shipping included.

That made them look like better deals than they actually might be for non-Prime members who were ordering less than $49 in merchandise, ProPublica found.

In a statement, Amazon said its sorting algorithms were designed for items where shipping costs did not apply.

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