Amazon’s price discrimination

by Eszter Hargittai on December 22, 2008

[UPDATE: An email from Director of Strategic Communication at Amazon, Craig Berman states the following (quoted with permission), which I thought was important to note here: “Amazon is a marketplace of many sellers, and while sellers are free to set their own prices for items they list, every customer pays the same for every individual offer.” I’m happy to hear that there is no price discrimination per se. Prime Shipping is a shady product though and I don’t recommend enrolling in it.]

Amazon's price: $17.13Amazon is quoting me a higher price than it’s quoting my friend, on the same product. I knew this was theoretically possible, of course, but I didn’t realize online stores engaged in these practices much these days. After all, is it really worth annoying customers when they find out? After a bit of experimentation, it seems to me that what’s going on here is that those with a Prime membership are being quoted a higher price. Ouch. So the thanks I get for paying for the Prime membership and shopping at Amazon a lot is higher prices. No thank you.

I was about to buy a Canon Digital Rebel XSi and some lenses (in sum, a $1K+ purchase) when I saw the link to an 8GB storage unit (the Transcend 8 GB SDHC Class 6 Flash Memory Card TS8GSDHC6) and decided to check it out given the size of photos I may be taking with a 12 MP camera. I clicked on the link and saw that the card cost $10 plus change (I have no screenshot of this as I didn’t realize I’d want one later). I then clicked on Add to Shopping Cart at which point I realized that I was logged on under a friend’s account who’d been using my computer earlier in the day. I logged out and logged back in using my own account. I went back to the same product’s page and noticed that the unit was now $17.13. (See screenshot here.) That’s annoying, after all, who likes to be charged 70% more than others? I logged out and did a search for the product without being signed on at all. Now the product came out costing $14.14 (screenshot). I logged back on using my own account to see what I would get now, and back I was at $17.13.

I have another Amazon account for other purposes so I decided to see how that would be treated. That account was quoted $14.14. The account I had tried first is the one I use the most. It is a Prime account. Prime means that for a payment of $79 a year, I get unlimited 2-day shipping on items that are eligible for it (which includes quite a few items). It also means that I have an incentive to shop at Amazon, because 2-day shipping is included on many things so I don’t have to worry about additional shipping costs.

As I was looking around the site for an explanation of the different prices – I found none, shocking, I know – I learned that it was possible to share my Prime membership with other members of my household. I decided to share the membership with my other account to test whether it was the Prime membership that was giving me the higher price quote. Indeed. Once I signed up for Prime with my second account, that account was now also being quoted $17.13 for the item.

When I initially sat down to use Amazon, I was going to spend well over $1,000. I walked away spending nothing. Additionally, I have no intention of continuing my Prime membership (I disabled the auto-renewal for it immediately), unless I get some explanation and the chance to buy items at prices others are being offered them. I sent Customer Service three notes already, but nothing helpful has come back so far. (The first response was outright offensive as the person either didn’t read or completely misunderstood the point of my email and sent back a canned response having nothing to do with my situation. I resent the query with what I hoped was a clearer explanation of the situation and still didn’t get anything addressing the question. I am waiting for the third response, but not holding my breath. Really, what I’m waiting for is for someone to tweak my account so I’m being charged what others are.) Of course, by not renewing my Prime membership, I’ll have much less incentive to shop at Amazon period (after this experience, it certainly won’t be the first place I go to look for things anyway). I guess most Prime members probably don’t realize this is going on or they don’t care about the differential so perhaps this practice doesn’t matter in the grand scheme of things. But it matters to me, more on principle than based on the $3 differential (although 21% could amount to a lot depending on the price) .

I’m curious to know what price quote others get on that product when they log on. If you’re a Prime member, do you see $17.13? If not, do you get $14.14 or less? Do you have other examples of such differentiated pricing at Amazon based on user account?

By the way, to read about the practices going on here, I recommend Joe Turow’s book on Breaking Up America. (No, of course that’s not a link to an Amazon page, I don’t plan on supplying those here anymore, not unless this gets cleared up.)

[UPDATE: In case you don’t read the 100+ comments, this follow-up post with a screenshot by a reader is helpful. The issue concerns being pointed to different vendors with different product and shipping costs that all seem to add up to the same $17.13. This still means that those with a Prime membership end up paying more for the product on the whole when including shipping costs already paid for the Prime membership. Slower shipping for this product for a lower price is not an option for such customers.]

{ 163 comments }

1

harry b 12.22.08 at 3:45 pm

Well, I get $17.13 as a prime member, but also 17.13 under my wife’s account which is not a prime member. I pretty much always comparison shop for items which cost more than $20 (other than books) and if amazon has it amazon is almost always the least expensive place to get it (exception, recently, was Golden Syrup!).

2

brett 12.22.08 at 3:47 pm

Logged in or out, trying either account I have access to, I get the $17 price. I’m not a prime member.

3

robertdfeinman 12.22.08 at 3:47 pm

It’s simple, Amazon is offering you a service for “free” (shipping) and needs to make it up somehow. If you do a bit of price comparison online you will find that in many cases those offering “free” shipping end up costing just about the same as those who charge explicitly. Some comparison sites even will factor in this cost (and tax) and give you a comparison based upon the total.

Secondly, Amazon is a huge enterprise and spends a lot of money on promotion and advertising. It recoups this by charging more on items where the increase won’t generally be noticed and leaving the low prices on the highly visible items. Lots of retailers do this with loss leaders.

I’ve always found the best deals come from small sites with low overhead, many of whom are little more than order taking front ends for some fulfillment firm. I never buy from Amazon, in addition to their questionable pricing they just keep too much information about their customers, it’s creepy.

If you are really set on that camera try B&H photo, you’ll get a fair price and no gimmicks.

4

jbd 12.22.08 at 3:48 pm

$17.13, prime member. Although to be perfectly honest, I wouldn’t buy a transcend card in the first place. They’re just… buggy. Believe it or not, the Sandisc Ultra 2/3 line is quite a bit better performance- and reliability-wise.

5

jonner 12.22.08 at 3:50 pm

17.13 both logged out and logged-in as a non-prime member

6

sal mineo 12.22.08 at 3:50 pm

$17.17 here, not and never have been a Prime member. I see that one of amazon’s “more buying choices” for this product, an “eek Technology”, is listing it for $14.14. So the other times you added it to your cart, did it come from eek’s amazon store rather than amazon’s amazon store?

7

Lokman 12.22.08 at 3:50 pm

I also get $17.13 as a prime member.

PS Joe Turow also wrote another book very recently, exactly on this topic of digital price discrimination, called Niche Envy (also not a link to Amazon).

8

eszter 12.22.08 at 3:51 pm

robertdfeinman – It’s not free, I pay $79 for it. It bugs me that Amazon calls it free shipping when it’s charging me $79/year for it. Since when is $79 free?

9

sal mineo 12.22.08 at 3:51 pm

er, I meant $17.13, not $17.17, sorry

10

Witt 12.22.08 at 3:51 pm

Tangential to your post, but one hiccup in appreciating the “free” two-day shipping is that the carbon cost of air transport rather than ground transport can be rather a lot, and I feel environmentally uncomfortable using it when I don’t actually need the items promptly.

11

eszter 12.22.08 at 3:52 pm

Thanks, Lokman, Joe writes so many books, I may have linked to the wrong one on this.:)

12

Juli 12.22.08 at 4:02 pm

For what it’s worth, I’m not a prime member and it’s showing $17.13 for me when I am both logged in and logged out of my account.

13

Dan Hirschman 12.22.08 at 4:02 pm

I am getting $17.13 as a non-prime member. Amazon also lists a $14.14 option to buy the item from “eek Technology”, with $2.99 for shipping and handling (and no free super saver shipping). Could this multiple possible sellers have created the situation you encountered? At first, you were buying it from eek, through Amazon, but then on your Prime account it shifted you to buying it through Amazon directly (which has the exact same cost as the other place but shipping is already factored in as $17.13=$14.14+$2.99)?

14

Fellow Prim Member 12.22.08 at 4:03 pm

I get the $17.13 price following your link, both when I am signed in as a Prime member and when I am signed out.

BUT – looking at your screenshots, you’re comparing the price from two different vendors – the $17.13 price is if you buy from a seller whose sales are “fulfilled by” Amazon (and $17.13 is the price for non-Prime members also), and the second is if you buy from “Eek Technology” (as a third party seller, they don’t participate in the Prime program).

I suspect what is going on here is that all of the options are available for all buyers, but that Amazon figures that Prime members would rather place an order that’s eligible for Prime shipping.

Incidentally, if you’re signed in as a Prime member and click on “More buying options” you get a list of vendors selling the card. Some prices are cheaper, but the shipping varies. All of the costs + shipping add up to $17.13.

15

Trey 12.22.08 at 4:03 pm

Prime member, $17.13. When I view it in another browser, not logged in, $14.14.

16

Trey 12.22.08 at 4:04 pm

Worth noting as well is that it is shipping from “eek Technology” and not from Amazon proper.

17

jack lecou 12.22.08 at 4:05 pm

FWIW, I get $17.13 for that link with both my own account (not Prime) and, as far as I can tell, when not signed in at all.

(I notice that this one is sold by “Blue Proton”. Coincidentally, other merchants selling it on Amazon include “eek Technology” for $14.14, and “Digital Etc” for $10.45. Could it be you were looking at other listings?)

18

Gene 12.22.08 at 4:07 pm

I have Prime as well and decided to check out a few other products, first not logged in and then logged in. Here are two price discrepancies I found:

Sony Blu-ray Player (BDP-350): $249 not logged in, $269 logged in
Panasonic Blu-ray player: $342, $349

However, I looked at a few books and they cost the same. Nevertheless, I won’t be renewing my Prime membership either.

19

Zamfir 12.22.08 at 4:08 pm

It lists 14.14 for me, but I think Dan is correct: if I look at the different shops, some offer it cheap with high shipping costs, others for 17.13 without shipping, including a 10.45 plus 6.68 shipping presumably the 10 you saw originally. But they all cost 17.13 if you include shipping.

So I think you are not being cheated, just that some shops use artificially low prices that are compensated by high shipping cost, and they of course do not offer free shipping.

20

Buster 12.22.08 at 4:09 pm

When logged into my account (not prime), I get 17.13. Log out and presto magic, it’s 14.14.

Annoying.

21

Matt McGrattan 12.22.08 at 4:12 pm

I did a search for a bunch of things logged in with prime and without it and the prices were the same each time.

22

Ann 12.22.08 at 4:14 pm

$10.54 for me – not a prime member

23

QualityGal 12.22.08 at 4:14 pm

Not signed in here at work, because I do my Amazon purchasing at home. I see $17.13. Never have been signed in on this computer.

24

MPP 12.22.08 at 4:15 pm

Interesting story. Wonder how it turns out. 14.14$ for me, a regular on Amazon.

25

Krilu 12.22.08 at 4:17 pm

I’m getting 14.14, not a prime member.

26

Angie Haggstrom 12.22.08 at 4:17 pm

Ok, before I sign in, I get $10.45. Now I am Canadian, but it should be more and not less thanks to exchange rate and I used the link on the post, so it should essentially be the same. Once I log in, it’s still $10.45…HMmmmm

27

Gene 12.22.08 at 4:18 pm

Having read jack and Zamphir’s comments above, I went back and looked more closely at the Sony blu-ray player prices I mentioned above.

Sure enough, the lower price comes from Abt Electronics, a merchant that doesn’t do two-day shipping. I also noticed that, even when logged out and browser cache cleared, I could find the two-day shipping eligible version sold by Amazon. When viewing the page, look under the price on the right. You’ll see there other merchants listed. Even logged out, I see Amazon’s version is $269, the same as when I am logged in as a Prime member.

What’s more, when I go to the page logged in as a Prime member, it defaults to the higher priced, Amazon shipped in two days option. But sure enough, under that price, in smaller font, is the cheaper $249 from Abt Electronics.

So it may be that Amazon defaults to a prime eligible shipper for Prime members, even when the price is higher. Indeed, it may even simply default to the lowest post-shipping costs total price.

28

Gene 12.22.08 at 4:19 pm

And since electronics often ship from sellers other than Amazon, it is reasonable that many of those products would display this phenomenon. At least line of thought, this may allow me to justify renewing my Prime membership…

29

Dan Riley 12.22.08 at 4:20 pm

The $14.14 from Eek isn’t eligible for Amazon Prime (it says so in fine print near the top of your screenshot, just below the navigation banner). The $17.13 it shows you by default as a Prime customer is, since it is fulfilled by Amazon. If you look at the screenshot for the $17.13 one, you can see the Eek one listed in the sidebar to the right of “more buying choices” listed at $14.14 + $2.99 shipping. So it is giving you the same choices, but it is changing the ranking that determines the product given the preferred placement, probably based on total cost including the default shipping cost.

30

cognitive dissident 12.22.08 at 4:20 pm

As a non-Prime customer, I am being offered the card for $14.14 from “eek Technology.”

FWIW, online retailers have been playing with prices for years…

31

Pascal Leduc 12.22.08 at 4:22 pm

I get 10.45

Ships from and sold by DigitalEtc.

32

Doctor Science 12.22.08 at 4:23 pm

*blinks*

I’m not logged in, and I’m getting $10.45. But that is quoted as coming from “DigitalEtc”, not “eek Technology”. Same price when I’m logged in, but I’m not Prime.

33

wytten 12.22.08 at 4:24 pm

I am not a Prime member, and I just got Price: $10.45 “Ships from and sold by DigitalEtc.” I wonder if where it ships from is part of the equation (I’m in the US)

34

Matt Steinglass 12.22.08 at 4:27 pm

Amazon would be leaving money on the table if it didn’t charge you extra. Because you pre-pay the shipping costs, those are a sunk cost to you. If you go to another vendor, you will have to pay for shipping. Hence Amazon can now charge you a higher price and still beat another vendor’s price.

The “free” shipping subscription is simply a con job. The idea is to trap you inside their system with a sunk cost that creates a barrier to leaving. For reasons both rational and psychological, they can charge the folks who have been trapped with that sunk cost more than the ones who never paid it.

35

Matt Brown 12.22.08 at 4:30 pm

I get $10.45, and I’m not logged in. This is pretty horrifying.

36

Kara S 12.22.08 at 4:31 pm

I checked the prices as a prime member and non-member/not logged in. I have to agree with Dan – you were probably looking at two different sellers – Blue Proton and Eek. I use Amazon all the time as a prime member and have not found price discrepancies. In fact, when you factor in rising shipping costs, a prime membership is actually a decent deal. About 70% of the time, my orders come the next day too – something I’d have to pay a lot more to get from other sellers.

37

Kári 12.22.08 at 4:31 pm

It’s $17.13 for me too (not Prime) but only after almost seven dollars in shipping and handling, which seems a little excessive for such a small item. I.e. if shipping really were free, the price ought to be $10.44, which is what it says on the product page.

38

Ed 12.22.08 at 4:31 pm

When I tried it on the browser where I’m logged in with Amazon Prime, I got a price of $17.13; when I tried it twice on other browsers, I got $12.63 and $10.45.

But I’m pretty sure this isn’t a case of price discrimination; it’s a product of the fact that none of these items are being sold by Amazon itself. When there are several sellers offering the item (none of which is Amazon), the site is probably programmed to send Amazon Prime users to the seller whose sales are eligible for Amazon Prime.

Of course, if Amazon is sending Prime customers to the most expensive seller, you can always get around that by clicking on the link that says “30 used & new available from $10.45.” (That bring you to a list of very other seller/price mentioned in this comment thread.) It would be really annoying to have to do this, I admit, but I’d probably recommend doing it anyway.

Anyway, until someone comes up with an item sold by Amazon itself at different prices to Prime customers and regular customers, I’m skeptical that this is an example of price discrimination.

39

Melinda 12.22.08 at 4:32 pm

Logged in, not Prime, and $14.14. I’m a steady customer but not a frequent one (about 4 orders/year).

40

Matt Steinglass 12.22.08 at 4:33 pm

Incidentally, the idea expressed above that Amazon or any other merchants “have to” make up what they “lose” in one area by charging more in another area is a common misunderstanding of the capitalist system. Every merchant charges as much as they possibly can for any given item to any given customer. Whether or not they have lost money on some other aspect of their business is irrelevant. Once you buy Amazon’s free shipping option, you are a captive consumer, just like the spectators at a baseball game. The hot dogs inside the baseball stadium don’t cost more even though the fans have already paid to get inside. They cost more because the fans have paid to get inside. You paid to get inside Amazon. That’s why Amazon can now charge you more.

41

Picador 12.22.08 at 4:33 pm

Yeah, I can confirm Zamfir above: searching for the item gives me a list showing a low price of $10.45, but clicking on the item shows me a low price of $17.13. This price is the result of five different “featured merchants” who supply the product through amazon (which is different from “amazon marketplace” merchants): each has a different listed price point (including $17.13, $10.45, and $14.14), but with the listed shipping charges they all come out to a total of $17.13 (e.g. $17.13+$0 shipping, $10.45+$6.68 shipping, and $14.14+$2.99 shipping). I suspect that this is a consequence of their “featured merchant” status: each agrees to provide the item cost + shipping at the same price point.

How this dovetails with your Prime membership is perhaps more complicated. Amazon may simply show you each of these merchants with the item price set to $17.13, with no shipping charges, which leads you to believe that you’re getting a discount on shipping when in fact you’re paying the same as non-Prime members. Or something else entirely may be going on.

I’ve suspected Amazon of price dscrimination for some time, but I’ve never been able to demonstrate it to my satisfaction. It may well be that they have a policy against it, as the loss of goodwill might not be worth it. I would probably boycott them if I had proof they were doing it, but so far, I’m not at all convinced.

42

Juli 12.22.08 at 4:34 pm

P.S. I’d observed the same as noted by a few above, that the Digital Etc. price is $10.45 and the Eek Tech price is $14.14. If I click through to Digital Etc. or Eek Tech through the “30 new and used available from $10.45” then the price shown is $14.14 or $10.45 accordingly.

43

Mister Blister 12.22.08 at 4:36 pm

Not a problem. As others have said, all the possible buying options are still available to you as a Prime member, but they show you the Prime shipping (Amazon fulfilled) option first, which in this case is higher than the third-party sellers’ options (but once you factor in shipping, probably about the same).

44

Tina 12.22.08 at 4:39 pm

Thank you for this post, eszter, for this post. It raises doubts in the trustworthiness of Amazon and, maybe, other online shops. BTW: It lists $ 10.45 for me, not logged in.

45

Tina 12.22.08 at 4:40 pm

Thank you for this post, Eszter. It raises doubts in the trustworthiness of Amazon and, maybe, other online shops. BTW: It lists $ 10.45 for me, not logged in.

46

eszter 12.22.08 at 4:43 pm

I appreciate the point about these being different vendors, but note that I just clicked through to the item and was going with what I was shown (without searching for a specific vendor). I’ll emphasize one more time that this is not free shipping, it’s shipping I already paid for so in total my cost is, indeed, more than $17.13 if I go with what I’m being offered as a Prime member. Of course, as was noted above, the shipping cost in my case is sunk cost.

The alternative people here are considering is that I go buy it somewhere else, but in the end have the same costs. Wrong. My alternative here has been not to make the purchase at all. I don’t know if or when I will. It’s taken me years to get around to purchasing an SLR camera, I’ll just wait longer now. And I’m not planning on going back to Amazon in general, so overall it’s definitely a loss for them in my case.

47

emeris 12.22.08 at 4:46 pm

Not login to anything, it shows up as 10.45 from DigitalEtc. Logged in to my (not prime) account, it showed up at 14, but then when I clicked on the flash card it showed up as 10.45 again.

I noticed on the top of the page a line that said “This item is not eligible for Amazon Prime when purchased from DigitalEtc. See more buying choices” where the last four words are a link that goes to a page of vendors for this card. At the top there is your $17 card from the only vendor that is eligible for Prime, where as the $10 one is marked as ‘item low price’. That page also notes that the $10.45 card isn’t eligible for either the Prime or Supersaver shipping, and will always cost you $6.68 in shipping.

This is amazon playing games with multiple vendors, not playing games with pricing per person. More interestingly, on the ‘featured vendor’ list all 4 of them are listed as ‘price’ in large letters, and ‘shipping’ in small letters, and all 4 are exactly $17.13.

I have posted this (basically) text and a screen shot on my blog

48

tom s. 12.22.08 at 4:46 pm

Logged in (not a prime member): $12.63 on amazon.com. Is that some funky exchange rate because I’m Canadian?

49

yazi 12.22.08 at 4:51 pm

@eszter (23) –

i don’t have a prime account, but are you sure that you’d get free shipping through one of the non-Amazon vendors? it seems like your choices are: Amazon as a vendor @ $17.13 and free shipping OR a non-Amazon vendor w/out free shipping for a total of $17.13. So, since you’re a prime member, they show you the Amazon option — for a variety of reasons.

50

Matthew Kuzma 12.22.08 at 4:52 pm

Following your link it was $17.13, refreshing the page (!) made the price drop to $12.63 with $4.50 for shipping. In either case I was not logged in.

Could it be that it switches randomly between different offers of price + shipping = $17.13 and that random switcing happened to correlate to your actions?

51

Yarrow 12.22.08 at 4:52 pm

From my Prime account I get $17.13, “Sold by BlueProton and Fulfilled by Amazon”.
If I’m not logged in, I get “Ships from and sold by DigitalEtc.” for $10.45 plus $6.68 shipping, or $17.13. So Amazon Prime folks get faster (but not free) shipping.

This makes sense, alas. Shipping is often a big part of the true price for sub-twenty-dollar items available from third parties through Amazon (lots of used books, for instance, are sold for 1 cent plus “shipping”). So it makes sense to me that when Amazon is doing the shipping for a third party they charge the actual price, which includes “shipping”, instead of the nominal price.

The opacity of the whole thing bothers me, but not enough to give Amazon the boot.

52

emeris 12.22.08 at 4:52 pm

edit: $17.13 when totaled

53

Eszter Hargittai 12.22.08 at 4:55 pm

Thanks to all for the sleuthing on this. I’m going to try one more time to explain why I think Prime members are being made to pay more in TOTAL. I get it that everyone is ending up with $17.13 based on different product price plus shipping options. Except that they are not. If you’re a Prime member then you have already paid for shipping so this product isn’t costing $17.13, it’s costing that plus the shipping you’ve already paid for. Yes, it’s a sunk cost, but it’s still a cost.

54

Paul Gowder 12.22.08 at 4:58 pm

Interestingly, I’m getting 12.63. (Not that I’m complaining!) I did the free trial of Prime, and then decided not to renew — perhaps they put me in the privileged class of total cheapskates? (I also buy a lot of used stuff from them.)

55

gabor 12.22.08 at 4:58 pm

I get $12.63 from Germany.

56

Dyzo Bandit 12.22.08 at 5:01 pm

What’s happening here is that Amazon is showing you the memory card from a different supplier based on A) your Prime membership, and/or B) your geographical location. If you’re logged in as a prime member, they give you the price it would be as fulfilled by Amazon, with two-day shipping available. If you’re not logged in, you appear to get a supplier who is closest or has the cheapest shipping to your area. (When I look at the link not logged in, it’s coming from ChiTek, for $14.14.)

So, I think the lesson is that you should always look at the prices offered by other suppliers, even if you are a Prime member, and if you don’t have to have it in two days. The default offer may not always be your best bargain, but I haven’t done the math, so maybe it is.

(I’m not affiliated with Amazon, BTW, just a long-time customer and Prime member. Also, a lurker on this blog. Hello.)

57

Total 12.22.08 at 5:03 pm

I think you’re misunderstanding what Amazon is doing. They have the product available from a number of different vendors, including Amazon itself. Because you’re a prime member, they default to Amazon as a vendor, even though it has a higher initial price. If you’re a non-prime member, they send you to another vendor, with a lower price (I got the 14.14 price at first), but including shipping (which is 2.99 in this case). That’s still less than the Amazon price, but it’s not two-day shipping.

58

emeris 12.22.08 at 5:03 pm

But, you get the 2-day thing for the $17.13, where as if a non-prime member wanted to get the two day shipping I’m going to guess that the price goes up.

59

Shari Smothers 12.22.08 at 5:05 pm

I saw the price differences. As a Prime member, I initially saw the $17.13 sold by Blue Proton, fulfilled by Amazon. I logged out and searched in non-Prime mode, and saw $14.14 Buy new, in the general listing. When I clicked on it, I got $12.63, shipped from and sold by Chitek.

Off to the right, I see a list of other buying choices on both pages, the $17.13 (Prime) and on the $12.63 (non-Prime) pages, showing the options to purchase the more and less expensive ones. And, as long as I have the option to buy from the cheaper vendor, I don’t feel completely hoodwinked.

Still, it does put you on guard. It seems like they put up a certain vendor depending on your Prime membership status.

60

Total 12.22.08 at 5:07 pm

Oops, posted before I saw Eszter’s further remark, but:

t’s costing that plus the shipping you’ve already paid for. Yes, it’s a sunk cost, but it’s still a cost.

Except it’s two-day shipping, and Amazon may believe that you value that more than the regular shipping from the other company. For example, to get close to 2-day shipping from the other vendor, you have to choose “Expedited,” which raises the shipping cost to 7.45 and the total cost to 21 and change.

61

Margaret Weigel 12.22.08 at 5:09 pm

$12.63 non prime price PLUS $4.50 for shipping, sigh. From some vendor called Targus. So it seems the only deal for Prime customers is the fast delivery, and not the “free shipping”. Duly noted.

62

Aaron Swartz 12.22.08 at 5:12 pm

“But it matters to me, more on principle than based on the $3 differential”

Can you articulate the principle you’re referring to?

63

An Idea 12.22.08 at 5:12 pm

Perhaps there is various sellers, and Amazon gives list the ones that are avaliable for the free shipping to prime member first, and other that are not somewhere down the line. As a logged in, non-prime member, the price showed was 17.13.

64

yazi 12.22.08 at 5:12 pm

@30 –

In essence you’re accusing Amazon of deliberately not selling items itself for less than the price of what the marketplace vendors are charging, including shipping. All in an effort to job its prime account holders. That motivation seems unlikely to me, but of course that is a matter of opinion.

If this situation holds true for all of your Amazon purchases, well then your prime account is costing you extra (or only buying you 2 day shipping). But if it’s just these kinds of sub-$20 items — which, as others have pointed out, have a different logic to them — you could still be getting something for your money.

65

engels 12.22.08 at 5:14 pm

People shouldn’t be charged more for things just because they have more money than others?

66

jack lecou 12.22.08 at 5:15 pm

I get it that everyone is ending up with $17.13 based on different product price plus shipping options. Except that they are not. If you’re a Prime member then you have already paid for shipping so this product isn’t costing $17.13, it’s costing that plus the shipping you’ve already paid for. Yes, it’s a sunk cost, but it’s still a cost..

Well, it may or may not be worth it for you, but you ARE getting more for Prime. After all, it’s not so much about “free” shipping, as fast shipping, at a fairly low average cost if you order a lot of stuff. (And a little less thought, since you c an just order an item or two whenever you please, without worrying about grouping things together to minimize costs or qualify for free shipping.)

In this case, it looks like the rest of us can get it in 5-7+ days for $17.43, while a Prime member gets it in 2 days for $17.43 + ($79/# of yearly purchases). Worth it? It depends.

(Either way, I don’t know if there’s still any evidence for outright price discrimination here. It looks like for non-Prime customers, Amazon shows the item from a random vendor – sometimes with shipping costs hidden, while Prime customers are naturally only shown the Prime-qualified vendor.)

67

Atlanta, GA 12.22.08 at 5:15 pm

First try: $12.63 + $4.50 shipping. Ships from and sold by ChiTek.

Second try (after refresh): $10.45 + $6.68 shipping. Ships from and sold by DigitalEtc.

Third try (closed and reopened page): DigitalEtc again.

68

Dan Riley 12.22.08 at 5:19 pm

And in exchange for that sunk cost, you get prompter delivery. That’s bascially what Amazon Prime offers, and that’s what you are getting. Usually what Prime offers is the difference between 2nd-day and super saver. In this case, it happens to be between 2nd-day and whatever the outside vendor defaults to, but it’s stilll the same value proposition.

69

Aaron Swartz 12.22.08 at 5:21 pm

Engels: I suspect not, since people who don’t like price discrimination are typically strong supporters of progressive taxation and sliding scales at museums and so on. But what could be the justification for such a principle? (Also, is the converse — charging people less just because they’re wealthier — also inappropriate? Should we complain about bulk discounts?)

70

engels 12.22.08 at 5:24 pm

On the basis of the two seconds thought that I have given this issue so far in my life I declare: we should be angry (or at least concerned) about bulk discounting and not (usually) about price discrimination.

71

Tracy W 12.22.08 at 5:26 pm

I agree with you on the support. I had a problem last week trying to order a Christmas present from a third party vendor from Amazon.co.uk. The first reply I got from Amazon’s Customer Service was clearly wrong.

72

Lazygal 12.22.08 at 5:30 pm

$12.63 when not logged in; same when logged in (not a prime member). On the other hand, they’re also quoting $4.50 in shipping, so it’s $17.13 for us “commoners”. Guess free shipping is the same as service compris

73

engels 12.22.08 at 5:30 pm

(That’s not meant to be dismissive, I should say, I think your original question is a good one and the above is my unconsidered answer–maybe other people have a better one…)

74

roy belmont 12.22.08 at 5:43 pm

Tech Bargains, a deal aggregator/search-and-shop- engine thing, lists the TS8GSDHC6 at The Upgrade Place for $73.00
[shipping] $2.95
Your Best Price:$75.95.
And a quick glance at the Upgrade Place itself finds that, yes, that is what it is, and that is what it costs.
Further confirming my growing suspicion that I’m inhabiting an alternate but adjacent universe, from which it’s possible to participate in some, but only some, of the same activities as yourselves, over there in that one.

75

sharon 12.22.08 at 5:45 pm

I’m not signed in as anything (and it knows I’m in the UK): I clicked through and it said $14.14.

But then I clicked through a second time (opening it in a new tab so I could look at it while typing in here) and it was… $12.63 WTF? Then it kept being 12.63 so I wondered if I’d imagined the 14.14.

I had an idea. I cleared my Amazon.com cookies and did it again. Now it’s $10.45.

Conclusion:
There is no discrimination here. It’s nothing to do with your Amazon accounts, or where you are. These are “featured” vendors, who have probably paid Amazon for the privilege of being the Chosen One on a certain proportion of click-throughs for that product.

Further conclusion:
With these Amazon marketplace products, always check that the page that comes up first is the cheapest option available…

76

C. Hall 12.22.08 at 5:47 pm

I get $10.45 not logged in, but I’m coming out of Europe, so who knows what they do in that case.

77

Anderson 12.22.08 at 5:49 pm

Amazon … that’s the one with the Republican CEO, right?

/surprise

78

Watson Aname 12.22.08 at 5:50 pm

Eszter, I think it’s worth reiterating the point about shipping speed. After all, on Amazon sourced products at least all anyone has to do to get free shipping is have a total order of $30 or something (I forget exactly how much). Low enough to be usually practical, but you often end up combining items. Which of course is part of Amazons plan with this, that you’ll just add another little something to get up to the free shipping threshold, but that’s a different marketing issue.

My understanding of the prime membership is that what it typically gains you is free 2-day shipping, rather than free regular shipping. If you buy things from them fairly regularly and want the fast shipping option, it’s going to potentially save you a lot of money. I suppose the same is true if you regularly buy items < $20, as the shipping cost might be high enough to total much more than $79.

Anyway, it seems that the analysis above is about right, that the different sources advertise lower prices but make it up on shipping, and your only advantage in this case as prime member is 2-day shipping vs. normal shipping (so really you should have been comparing costs with equivalent speed shipping charges, in which case you save money). This is basically the point of prime membership, isn’t it? I haven’t paid much attention to them, so I don’t know if their marketing of “prime membership” is misleading in this way.

79

Baptiste 12.22.08 at 5:52 pm

From France, from a French account, I get $14.14…

80

M. Gordon 12.22.08 at 5:53 pm

It seems fairly clear that the underlying price of the device plus shipping is about $17. Logging in at different times, or from different accounts, gives you offers from different vendors for more or less the same price, if you include shipping. This is a pretty common practice for vendors on Ebay, for instance: have lower face prices, but hide the difference by inflating the shipping. It’s pretty clear that this is not price discrimination, and that Eszter drew the wrong conclusions from her limited trials with the system. The price differences are entirely based on what vendor you get shunted to, which changes depending, based on some obscure algorithm, depending on whether you’re logged in, who you’re logged in by, when you refresh the page, etc. And the end result of the whole thing is: Prime members get to pay $17 and get two day shipping, non-prime members get to pay $17 and get 3 – 5 day shipping. There’s no overt price discrimination (no price discrimination at all, actually), and Prime members are getting a better value for their $17. So I think we can all safely go back to shopping at Amazon and put away our righteous indignations hats for another day.

81

steven crane 12.22.08 at 5:54 pm

personally i use adorama for all my online camera-buying needs (when i’m not picking up 1970s relics on ebay). i got a spiffy new Pentax K20D + a Sigma 17-70 lens delivered quickly, at reasonable prices.

o’course, when i shop locally for things like film and filters and other old clunky manual-focus lenses, i go to central camera at adams/wabash. i’m sure you’ve seen it from the train.

82

Jon 12.22.08 at 5:56 pm

$12.63 for me!

83

engels 12.22.08 at 6:02 pm

Another guess: price discrimination (on grounds of ability to pay) makes people angry because it seems to go against the rules of the game as we understand them. But those rules are more-or-less arbitrary and do not reflect any real moral principle (countries where haggling is common and where this kind of price discrimination therefore operates as a rule aren’t morally worse places for that). And perhaps these rules actually favour the rich. But I’m not sure.

84

Mike Kozlowski 12.22.08 at 6:03 pm

Eszter, you’re totally off-base on this. Here’s how it works:

Amazon sells things in several ways:

1. Directly from them to you. In this case, you can use your Prime and get free two-day shipping. (And non-Prime members can spend $25 or more and get free “Super-Saver” (aka slow) shipping.) On this product, Amazon charges $17.99.

2. As a broker for other companies. In this case, the other companies can charge whatever they want — they set their own prices and their own shipping charges independently. Amazon just handles the checkout process and merchant disputes, sort of like eBay for non-auction purposes; they don’t ship you the product or get your money, they just get a cut of the merchant’s money. In this case, you can see (by clicking on “31 used and new”) that there are a handful of Featured Merchants, all of whom are selling this for various combinations of price and shipping. In this case, they appear to sum out the same, on other items (such as that Rebel XSi) they don’t. Amazon has no control over what these people charge. And Prime, of course, doesn’t work with these people, because you didn’t pay them $79 for the free shipping.

3. With Amazon Fulfillment, which is what that Blue Proton ($17.13) price is on this one. I don’t really understand this arrangement, but basically Amazon takes the money and ships it, but you’re really buying it from someone else in some sense. You can use Prime on “Fulfilled by Amazon” orders, presumably because Amazon takes a large enough chunk of the pie (or that they bill back to their partner) or something.

4. Random non-Featured new and used people, who work like the Featured ones but don’t get front page placement.

Now where it gets weird is this: Amazon has some algorithm (they don’t say what it is, and it changes over time) for which merchant they show you immediately. It’s not always themselves — sometimes it’s one of the Featured Merchants. It seems like it’s usually the cheapest one, but in my experience, that’s not always true.

So in this case, if you don’t have Prime, all of them (except Amazon themselves, ironically!) end up being the same price after shipping, so they show you one at random. But if you have Prime, the one from BlueProton is the cheapest (since it includes two-day shipping), and that’s what they show you.

You’re not getting ripped off, you’re just getting confused.

85

Trey 12.22.08 at 6:10 pm

Also, I’m pretty sure that after Amazon got caught doing this in 2000, they pledged to never engage in differential pricing on their own merchandise again; whether or not you believe them is up to you.

86

David Moles 12.22.08 at 6:12 pm

Prime, $17.13. “Sold by BlueProton and Fulfilled by Amazon.”

On the right I see: “More buying choices”, listing DigitalEtc, eek Technology, ChiTek, etc. at a variety of prices that, with shipping, all add up to $17.13 — plus “Amazon.com – $17.99 & eligible for FREE Super Saver Shipping on orders over $25.” The shipping quote for DigitalEtc, etc. appears to be 3-5 business days.

I do think there’s a bit of bait and switch here in that what my $79 is getting me is not in fact free shipping but merely an upgrade from standard to expedited. This is not price discrimination per se but it is misleading given that what they advertise is “Unlimited FREE Two-Day Shipping!”

Another way of looking at it — I don’t know how Amazon’s third-party merchant relationships work — is that the third-party merchants are squeezing out every penny they can by quoting a lower list price than Amazon but charging the same in total. Either way, though, I blame Amazon, since they’re the ones setting the rules.

The two-day shipping charge for DigitalEtc, by the way, was over $20.

87

sharon 12.22.08 at 6:16 pm

Aaahh. It’s… interesting, isn’t it, how you have these four top vendors and in every case the price plus postage adds up to exactly $17.13. A small bet that those four are actually all the same vendor masquerading under different names?

So I should revise my earlier comment and point out that I do think there’s something slightly dodgy going on here, just that it’s not price discrimination. Or, indeed, cheating the customer as such, since $17.13 does appear to be the cheapest price available regardless of how you arrive at it. Creating the illusion of competition where there isn’t really any is more like it, but hey, that’s marketplaces for you, innit?

88

Mike Kozlowski 12.22.08 at 6:16 pm

David, the third-party merchants are really third-party merchants, not divisions of Amazon. Amazon isn’t responsible for their pricing — those guys could sell for $3 and massively undersell Amazon (in this case, in fact, all of them are underselling Amazon by 82 cents), and it doesn’t mean that Amazon is ripping you off (unless you believe that Amazon is obligated to have lower prices than any other retailer).

All Amazon is doing is showing you its competitors on its front page, while extracting a fee from the competition for that.

89

Mike Kozlowski 12.22.08 at 6:22 pm

Sharon, similar prices is what you’d expect if this is an ultra low margin business where people are selling at the bare minimum price necessary to have any profit at all (which, well, it is).

If you look at a different product, you’ll see that Eek and Chitek/DTC are selling for slightly different prices there, but a ton of other places are all at the same (low) pricepoint. I suspect there’s a lot of incentive to be at the low pricepoint, since that’s the one that gets the placement.

90

Mikey in Plano 12.22.08 at 6:24 pm

Non-Prime membership: $12.63 from ChiTek

Have a link for “31 used & new available from $10.45” which lists the $17.13 price from Blue Proton, then the $10.45 (+ $6.68 shipping, for a somewhat suspicious $17.13 total) from Digital Etc, and so on for various other vendors. They seem to be listed in order from cheapest to priciest, including shipping costs, which for the Blue Proton item is free with “Super Saver Shipping on orders over $25.00.” So, you’re (Prime Members that is) paying yearly for free shipping on an item everyone can get free shipping on, under certain circumstances, or another vendor. I didn’t bother with Prime Membership when it came out, because most items fulfilled by Amazon could be shipped ground for free.

MicroCenter has “house-brand” memory, UBS flash drives and SD cards and such for very, very low prices. I picked up an 8GB USB drive for $6 or $7 from them. That’s from an actual store, mind you. Woot.com is another great place to pick up cheap memory, when they’re selling it, of course.

91

Laurence Gonsalves 12.22.08 at 6:27 pm

When not logged in to my Prime account I get $14.14 + $2.99 shipping from “eek Technology”. When logged in I get $17.13 from Amazon (with free shipping). It’s interesting to note that whether logged in or not I can get the item from eek for $14.14 + $2.99 shipping but when not logged in the price from Amazon increases to $17.99 (not including shipping). So the Prime account is actually discounting Amazon’s pre-shipping price to make it equal to eek’s, but it appears higher if you don’t account for eek’s shipping charge.

92

Dave 12.22.08 at 6:31 pm

I read somewhere [it might even have been here] that second-hand books are priced in this market by software, juggling demand and availability [and thus charging 000’s of $ for the last available copy…] Is there not probably something similar happening here? Battling spiders, as it were?

BTW, it’s telling just how much comment this post developed, given that what’s at stake in the most frequently-used example is the price of a cup of coffee. But then, hard times…

93

Kieran 12.22.08 at 7:03 pm

Looking at the page from my (non-Prime) account, it seems like Mike K is right: I got offered it at $12.63 + $4.50 (3-5 business days, I guess) in shipping from ChiTek. It says the item not eligible for AZ Prime, were I a member. Under “More buying choices” to the right of the page I see it’s available from Blue Proton for $17.13 + $5.58 in regular shipping (3-5 business days, again), from eek Technology for $14.14 + $2.99 shipping (3-5 days), or directly from Amazon themselves for $17.99 +$5.58 in (3-5 day) shipping . If I were a Prime member, of course, I’d get it in 2 days for the $17.99, having paid my $79 annual fee.

So if I don’t care about the vendor, my total-cost choices are, in effect:

1. $17.13, 3-5 days [ChiTek or eek Tech — NB same price in the end]
2. $22.71, 3-5 days [Blue Proton]
3. $23.57. 3-5 days [Amazon, not-prime]
4. $17.99. 2 days [+ pro-rated portion of $79 over all purchases this year: Amazon Prime]

I guess I’m not seeing where the price discrimination is. In particular, I shouldn’t expect to get 2-day shipping under my AZ Prime membership if I buy something via Amazon’s website but from a third-party vendor who doesn’t participate in that program. Am I getting something wrong?

94

jack lecou 12.22.08 at 7:06 pm

I do think there’s a bit of bait and switch here in that what my $79 is getting me is not in fact free shipping but merely an upgrade from standard to expedited. This is not price discrimination per se but it is misleading given that what they advertise is “Unlimited FREE Two-Day Shipping!”

“Unlimited Free Two-Day Shipping for $79”, you mean. Which seems pretty clear if you parse the word “Free” in the correct context. (Or self-contradictory in a really obvious way if you don’t.)

95

Bill Benzon 12.22.08 at 7:09 pm

14.14 non-Prime, 17.13 with shipping.

96

jack lecou 12.22.08 at 7:10 pm

2. $22.71, 3-5 days [Blue Proton]

My screen says “Blue Proton” is also eligible for Amazon prime (it’s shipped from their warehouse), so that’s seems like your best bet if you’ve got a Prime account (it’d be $17.13+avg. prime cost).

(N.B., the same card is available on Newegg for $13.99, free shipping.)

97

jabberwock 12.22.08 at 7:14 pm

$12.63 plus $4.50 shipping for non-prime on 12/22/08

98

Zamfir 12.22.08 at 7:51 pm

I guess the main issue is solved… I am interested by Sharon’s take, that all the $17.13 vendors are the same store under different guises (but probably not amazon itself). I guess that makes some sense, if you see an article priced at the same price three times you think that’s probably the right price, and others might be fooled by the low price/extra shipping trick.

Another possibility could be that these stores have the same supplier and pay the supplier the same price, and use the same profit margin. Especially if they use bots with an algorithm that says “If some else sells the same article, lower your own price unless minimum profit margin has been reached”.

In markets where people price by hand I seldom see such a perfect convergence.

99

Randy 12.22.08 at 8:00 pm

Mike Kozlowski is right about this but I doubt Eszter or most of the commenters care about the actual facts involved. Eszter prefers to pretend Amazon is evil when the truth is Ezster was too lazy to bother understanding Amazon Prime when she signed up, and too lazy to bother doing even cursory fact-checking before launching into her diatribe. Willful ignorance is the term that come to mind.

100

Watson Aname 12.22.08 at 8:03 pm

@98 I think the ‘bot scenario is more likely than Sharon’s cotention.

Pricing information is both easily available and easily available to software in a lot of these markets. Even without automatic pricing, online availability radically normalized used book pricing, for example. I expect that these (particularly low-costz) consumer articles have behaved similarly, but with rapid updates.

I’ve noticed some items with near identical pricing (when shipping & taxes, if any, are accounted for) across large numbers of unrelated vendors. I can only imagine they are all watching each other, and have similar enough wholesale costs to have hit some sort of equilibrium.

I’ve also noticed some minor cleverness like pricing with $x.98 instead of $x.99, in order to appear earlier in lists sorted by price….

101

Eszter Hargittai 12.22.08 at 8:05 pm

Mike Kozlowski – You haven’t added much to what people already explained in the comments before yours. I get it. I am not confused. It may have been wrong to call this “price discrimination”, but I stand by the claim that what happened here is not okay as it leaves Prime users paying extra, which wasn’t what I signed up for when I joined. I won’t sign up for it again, that will work for me. Now I know.

Kieran – I don’t think you’re getting anything wrong here. It’s a question of how much you care about the “+ pro-rated portion of $79 over all purchases this year” part and whether you recognized previously (or care at all) that at times Prime members pay twice for shipping.

102

Watson Aname 12.22.08 at 8:11 pm

that at times Prime members pay twice for shipping.

It’s not the same shipping though, is it? How is it less accurate to look at that pro-rated part as paying for your “shipping upgrade”, as it were? I’d argue that it is in fact more accurate, when you consider that in some very real (but constrained) sense, “free shipping” is the normal case for amazon. You’re actually paying less, as people have pointed out, for the equivalent service here, not more.

As an aside, I don’t think it’s worth the $79 either, but that’s because I see little value in expedited shipping…

103

Mark Jaquith 12.22.08 at 8:20 pm

I get it that everyone is ending up with $17.13 based on different product price plus shipping options. Except that they are not. If you’re a Prime member then you have already paid for shipping so this product isn’t costing $17.13, it’s costing that plus the shipping you’ve already paid for.

No, because your Prime membership only gets you free two-day shipping for selected items sold by Amazon.

From their site:

Free Two-Day Shipping on more than one million in-stock items sold by Amazon.com.

This isn’t one of those items.

But as an apparent bonus, you get a free upgrade to two-day shipping, while only paying the regular shipping price. Everyone pays $17.13, but Prime members get two-day shipping instead of regular shipping.

104

jack lecou 12.22.08 at 8:26 pm

…at times Prime members pay twice for shipping.

How do you figure?

I mean, the equal comparison here is what it takes to get the item with 2-day shipping – $17.13 with Prime, but $20+ without.

Otherwise, AFAIK, to be eligible for Prime, items have to ship from Amazon’s warehouses (sold directly by Amazon, or “fulfilled by Amazon”). But then those same items are usually the ones eligible for the free “Super Saver” shipping too.

In other words, the choice you’re making with Prime isn’t supposed to be shipping charges vs. $79 for free shipping. It’s free shipping vs. $79 FAST free shipping.

105

Mark Jaquith 12.22.08 at 8:30 pm

I stand by the claim that what happened here is not okay as it leaves Prime users paying extra, which wasn’t what I signed up for when I joined.

No, no, no. You only paid once. This is being sold by a third party. You didn’t pay them $79 for your Amazon Prime membership. You didn’t pay Amazon for free shipping from third party vendors. You paid Amazon for free shipping for items sold by Amazon, and free two-day shipping for select items sold by Amazon.

As a bonus, Amazon will upgrade your shipping to two-day shipping, free, on select items sold by third parties, but fulfilled by Amazon. You pay the same shipping cost as everyone else, but you get it in two days instead of the normal shipping period. You’re not paying twice, because this is not one of the items for which you get free shipping with your Prime membership.

106

Dirty Davey 12.22.08 at 8:31 pm

@64:

In essence you’re accusing Amazon of deliberately not selling items itself for less than the price of what the marketplace vendors are charging, including shipping. All in an effort to job its prime account holders. That motivation seems unlikely to me, but of course that is a matter of opinion.”

Isn’t it more likely, if anything, that Amazon would prevent its marketplace vendors from undercutting it rather than that Amazon would refuse to undercut the vendors?

107

Mr Art 12.22.08 at 8:35 pm

Estzer, I think it would be reasonable to add a clarifying addendum to your original post, given that not everyone will bother reading the comments. In particular you can’t really argue

it seems to me that what’s going on here is that those with a Prime membership are being quoted a higher price.

given that it’s now clear you are being quoted the same price, and getting improved shipping.

108

Mark Jaquith 12.22.08 at 8:37 pm

To contrast, here is an item sold by Amazon that is eligible for Amazon Prime two-day shipping:

Kingston DataTraveler 4 GB USB Flash Drive

The price is $11.78, as of this writing. If you have Amazon Prime, you pay $11.78 total, and you get two-day shipping. If you don’t have Amazon Prime, you pay $11.78 plus shipping costs, and it doesn’t arrive in two days (unless you pay even more in shipping costs).

109

Timothy Burke 12.22.08 at 8:59 pm

I think one thing you can say with confidence is that the complexity of Amazon’s relationship with other vendors is sometimes a liability for the relation they’ve built with customers under their own name. This isn’t the first time that I’ve run into some confusing relationships on this score.

110

Kara S 12.22.08 at 9:09 pm

Just to clarify how Prime membership works… It does not offer free shipping all around, which has been clarified in previous comments. It does offer free two-day shipping for the flat rate of $79 for one year. Since my membership will expire in a little over a month and given today’s discussion here, I sat down to figure out if Prime membership is really beneficial.

Based on the 10 orders that I’ve placed since joining Prime…
I would have paid $72.34 total in shipping for standard 3-5 day delivery. If I chose two-day delivery for my orders, I would have paid $146.89.

I’m a Prime member so I paid my $79. As determined by some commenters, the Amazon Prime eligible items may have standard shipping built into the price (the main reason for the supposed price discrepancy). If that’s the case, let’s assume that I paid $72.34 in built-in standard delivery costs. $79 + $72.34 = $151.34.

So at this point it’s roughly a break-even situation. However, from this point on, any purchases will clearly make Prime more beneficial. Essentially, the more purchases, the more cost effective Prime is.

Will I renew my Prime membership? Probably. For a couple of reasons – my items usually arrive the next day, not in 2 days; purchasing via Amazon saves me time and gas costs since the closest major retailers are 50+ miles away; and Amazon Prime prices tend to beat most major retailers when factoring in shipping costs. And I can share my membership with family members making it more cost effective in the end.

Hope this helps some understand the situation a little better.

111

Mark Jaquith 12.22.08 at 9:42 pm

Kara, your calculations only work if the items you got were (a) available from Amazon and cost more than $25 (so Super Saver Shipping would have been free), or (b) being sold by third parties, where your shipping wasn’t free (and your Prime membership was just upgrading you).

Any items you bought that were sold by Amazon and eligible for free two-day Prime shipping and cost less than $25, you saved both the regular shipping cost and the “upgrade to two-day shipping” cost. Remember, for eligible items sold by Amazon, your shipping is two-days AND is free (as opposed to a free upgrade to two-day shipping at the regular shipping price).

112

Eszter Hargittai 12.22.08 at 9:56 pm

Mr Art – Good point, I was going to do this earlier, but had a meeting to attend. I have added an update.

Timothy Burke seems to get a larger level issue here.

113

Kieran Healy 12.22.08 at 10:01 pm

Hi Eszter –

Kieran – I don’t think you’re getting anything wrong here. It’s a question of how much you care about the “+ pro-rated portion of $79 over all purchases this year” part and whether you recognized previously (or care at all) that at times Prime members pay twice for shipping.

I’m sorry, I still don’t understand. It’s clear from the discussion that you weren’t quoted a higher price for the item itself, just because you were a Prime member. Instead, the item might have been available cheaper (and shipped to you more slowly) from 3rd-party vendors, whereas Prime shipping only covers stuff shipped from Amazon’s warehouses. So how do you figure that “at times Prime members pay twice for shipping”? When would this happen? The purchase options listed @93 above are all for the item + standard shipping, sometimes shipped from Amazon, sometimes not. They range from $17.13 to $23.57 with 3/5 day shipping, except for the Prime option which is $17.99 for the item and 2 day shipping, given that you’ve paid your $79 for the year. Obviously if this was the only item you bought all year with AZ Prime, then you’d effectively have paid $17.79 + $79 to have the thing shipped to you in 2 days. On the other hand, if you buy from Amazon every day and always have it shipped Prime then you’re effectively paying about 22 cents for 2-day shipping on that item. Whether the $79 Prime Membership is worth it depends on how often you use the service and how much you value 2-day shipping over the pay-as-you-go 3-5 day and free >5 day alternatives. But I don’t see where you’re getting charged twice for shipping at any point.

114

Eszter Hargittai 12.22.08 at 10:04 pm

Kieran, by “twice” I was referring to the shipping cost that one’s already paid by paying the $79 plus the shipping cost built into the $17.13 (or $17.99). Why is that not paying for shipping more than one time?

115

Kieran Healy 12.22.08 at 10:06 pm

Why is that not paying for shipping more than one time?

Because the people who pay $17.13 get the card in 3-5 days, and you pay $17.99 and as a Prime member get it in two days. Your Prime membership guarantees you get it much faster. That’s what you’re paying for, right?

116

Watson Aname 12.22.08 at 10:08 pm

Wait, OK. So if you’re a Prime Member you have to take 2-day shipping on what you buy, whether you want it or not?

That’s what it looks like (I can’t verify, not being a member). Or at least you can’t opt for slower shipping at a lower price. You might be able to specify 3-5 day or whatever it is, but at no savings.

So if this is correct it really is only worth your while if you value the expedited shipping enough you’d pay for it (at least more than $79 worth) anyway, or you like to order lots of things less than the ($25?) free shipping threshold, and don’t want to wait and aggregate them.

117

Eszter Hargittai 12.22.08 at 10:09 pm

Slower shipping for this product for a lower price is not an option for such customers.

Oops, no, I had that wrong. It looks like you can click on the “used and new” link, get the product cheaper and then pay for shipping separately and end up with the $17.13. So yes, you’re paying the same in the end that way, but there’s still the cost you’ve already sunk into supposed postage covered for the year.

118

Watson Aname 12.22.08 at 10:20 pm

Oops, no, I had that wrong. It looks like you can click on the “used and new” link, get the product cheaper and then pay for shipping separately and end up with the $17.13. So yes, you’re paying the same in the end that way.

So this all boils down to Amazons $79/yr for free 2-day shipping not really being worthwhile for you? Plus a dash of confusion due to Amazon’s multi-layer approach being more opaque than it could be?

119

Michael 12.22.08 at 10:24 pm

Here’s what I got, signed on to the Amazon US site from the UK:

Transcend 8 GB SDHC Class 6 Flash Memory Card TS8GSDHC6
Other products by Transcend

List Price: $32.99
Price: $10.45

For what it’s worth … or maybe better, what’s it worth?

120

curious citizen 12.22.08 at 10:26 pm

Perhaps if instead of typing, ‘free’ 2-day shipping for $79 p/yr, we typed, ‘$79 flat-rate 2-day shipping for a year on all eligible purchases’, everything would be fine and we could simply ask, ‘am I likely to want more than $79 worth of 2-day shipping this year?’ If so, great, I’ll get it, if not, fine, I’ll pass.

121

Eszter Hargittai 12.22.08 at 10:27 pm

Your Prime membership guarantees you get it much faster. That’s what you’re paying for, right?

I thought I was paying for shipping for the year. That’s not the case as here I’m paying for shipping again.

122

Watson Aname 12.22.08 at 10:33 pm

Eszter, prior to purchasing the $79/yr plan were you aware of the free shipping options available without this plan? I ask this because I’m trying to understand how clear this is to someone not familiar with their system. This is difficult for me, as I had used it regularly before there was an “amazon prime” so when they started flogging the prime membership I had a look at what was offered and quickly determined it wasn’t useful to me.

In your case, did it seem like this was the only way to save on shipping?

123

Mike Kozlowski 12.22.08 at 10:39 pm

You’re not paying for shipping. If you want to buy this from Amazon directly and don’t have Prime, you pay $17.99 plus shipping. If you want to buy it from Amazon directly and do have Prime, you pay $17.99 and get free two-day shipping.

With this particular item, though, there are other people who sell it for cheaper than Amazon, so buying it directly from Amazon isn’t your best bet. Yes, some of the people who sell it for cheaper happen to do so from Amazon’s own site, but that’s not qualitatively different from Newegg selling it for cheaper.

Since you’ve had it explained to you that these third-party sellers aren’t Amazon, I’m not sure what your complaint is. Do you think that Amazon shouldn’t list third-party merchants?

124

Kieran 12.22.08 at 10:42 pm

I thought I was paying for shipping for the year.

No, you were paying for unlimited 2-day shipping for the year.

That’s not the case as here I’m paying for shipping again.

Please explain to me where there is an extra shipping charge. Amazon quotes a price (from their own stock) of $17.99 for the item. You get that shipped to you for free, in two days, given your Prime membership. Other vendors may have different price (item + shipping) combinations, but they’re not covered by Amazon Prime. How is Amazon double-charging you?

125

Kara S 12.22.08 at 10:55 pm

Mark, I’m not sure I’m following you. I looked at it from the perspective of someone without a Prime membership (paying for shipping w/ every order) and someone with the Prime membership (one flat rate for shipping). And also used the assumption that standard shipping costs are built-in to the Prime cost of the item – the premise of this article. (However, I personally don’t think that’s true and believe that I saved a lot more in shipping costs than my previous post leads one to believe.) I based my calculations on the shipping cost tables on the Amazon Help page. If I had an order of books, I took the standard cost + the number of items cost. That’s how I determined the non-Prime shipping costs. Then I used the two-day shipping costs to determine my savings when I use Prime because Prime offers the free two-day shipping. Essentially, I tried to answer the question of whether I was better off w/out Prime, paying shipping each order, and waiting 3-5 days (or longer over a weekend) for my order. (I’ve concluded that I am as long as I order things regularly.) Typically, I avoid the 3rd party sellers, simply because of reliability. Every thing that I’m interested in purchasing from Amazon is Prime eligible. I should have noted that I purchase mostly books with only a few things over $25 and eligible for Super Saver Shipping (not that I would want to wait 10 days for my order anyway!).

Watson Aname, When you’re a Prime member, you pay once a year for shipping ($79). You don’t get charged again when you place an order. So if I see an item eligible for Prime and it costs $11.25, my total cost for that order is $11.25, no shipping cost. I get my item in 2 days, saving $12 in shipping. I also have the option to upgrade to next day shipping for $1.99/item. Prime is beneficial if you already order things on a consistent basis.

126

jack lecou 12.22.08 at 11:00 pm

To break this down. a non-Prime member pays:

Base item price: let’s say $10
Base shipping fee: $7.13
Extra 2-day cost: I get $10.98

So, if you look at it a certain way, a non-Prime member pays “twice” to get 2-day shipping too: the base fee, plus the 2-day fee.

But that’s not really what’s going on. The right way to look at it is that the 2-day shipping fee is just broken into two parts, one of which is already included in the $17.13 price.

The same goes for Prime – the $79 doesn’t cover ALL your shipping costs, just the extra part that gets you up to 2-day shipping.

127

Watson Aname 12.22.08 at 11:13 pm

Kara S.,

Yes, I understand how it works. Of course you can obviously get free shipping without prime membership as well, with certain conditions. My question was directed motivated by Eszter’s comments in these threads, which suggest that perhaps she purchased a prime membership without understanding exactly what she did or did not get for the $79/yr, and what her other options for free shipping were. It is interesting in context, asking if instead of price discrimination amazon is practicing misleading advertising.

For example, your statement:

I looked at it from the perspective of someone without a Prime membership (paying for shipping w/ every order)

Is completely atypical in my experience. I order things fairly often from amazon, do not have a prime membership, but I have never paid for shipping because I make certain to order only when I have enough value in the order to qualify it for free regular shipping. Since this threshold is fairly low, it is not difficult.

So relative to my practice, your prime membership gains you nothing in price, but it does allow you to get things more quickly (at least probably, but I’ve often had things arrive within 2 days regardless) and also to order something under $25 by itself and not pay shipping. It may also be true that you can get free shipping on some things with prime membership that do not qualify for regular free shipping. Is this true? If so, it hasn’t affected me.

128

Kara S 12.23.08 at 12:30 am

Watson Aname, I randomly checked some items that I’ve ordered via Prime, and some are not eligible for Super Savers Shipping even though purchased / fulfilled via Amazon. (Not sure of all the technicalities of why or why not an item would be eligible.) In reflection, I think that’s one of the reasons I decided to try Prime for a year – not everything I wanted to purchase was eligible for free shipping. Also, I don’t think Prime is for everyone. It all depends on your purchasing habits etc. And, again, in my situation, where we live isn’t convenient to major retailers, and shipping companies are notorious for stretching the delivery limits, whereas with Prime the purchases are flagged as express and actually get here in the proper time frame, many times sooner. :)

129

Laleh 12.23.08 at 1:02 am

$12.63 for me, and I am not a prime member, though I spend around £4k-5k on amazon.co.uk and around $400-500 on amazon.com every year.

130

Eszter Hargittai 12.23.08 at 1:58 am

Eszter:
I thought I was paying for shipping for the year.

Kieran:
No, you were paying for unlimited 2-day shipping for the year.

That includes free shipping period. This is confirmed by the following in an email I received from the Director of Strategic Communication at Amazon that includes the following: “Prime members receive free shipping”.

I’ll update the post with the following bit from this correspondence as it’s relevant to the post and I’m happy to have it noted prominently:

“Amazon is a marketplace of many sellers, and while sellers are free to set their own prices for items they list, every customer pays the same for every individual offer. “

I stand by what I said earlier about the shipping issues in this case, but I can’t think of additional ways to explain it so I’ll stop.

131

jeremy hunsinger 12.23.08 at 3:01 am

I get $10.45, dunno why. I refuse prime. I buy quite a bit of stuff through them.

132

Matthew Kuzma 12.23.08 at 3:37 am

You are absolutely right that by charging you $17.13 for the product, they are effectively cheating you out of your purchased unlimited shipping. In fact, I wouldn’t be surprised if they go to lengths to make sure some vendors include shipping into the retail price of certain (particularly low-ticket) items just so they can offer you free shipping without actually giving you any discount or costing them any money.

Also, while the particular arrangement of cost + shipping seems to vary across the board, and that may be for something as innocently manipulative as trying to catch consumers with different thresholds of price or shipping, it’s worth noting that Prime members are consistently given the highest price before shipping, minimizing the value of the Prime membership, in this case at least to $0.

133

Mark Jaquith 12.23.08 at 5:06 am

I thought I was paying for shipping for the year.

Only for items sold by Amazon. This is the part that’s tripping you up and making you think you’re paying double for shipping. You’re not, because you paid Amazon $79, not the thousands of third parties which offer their products through Amazon’s site.

Amazon Prime gets you one, both, or neither of the following:

• Free shipping
• Fast shipping (upgrade)

For eligible Amazon Prime items sold by Amazon, you get both. For ineligible items sold by Amazon, you just get free shipping. For select items sold by third parties but shipped through a partnership with Amazon, you get the fast shipping upgrade for that merchant’s regular shipping price. And for select items sold by third parties and shipped by third parties, you get neither free shipping nor a free two-day shipping upgrade.

So in some cases, you have no benefit. In some cases, you save money. In some cases, you get faster shipping. In some cases you save money and get faster shipping.

There’s more than $79 worth of value to be had here if you use the site with any frequency, and if you favor items sold by Amazon that are eligible for Amazon Prime. However, I can see how you feel you were cheated if you were under the impression that you were paying for free shipping for everything sold on Amazon.com — because that’s not what Amazon Prime is.

134

Rebecca 12.23.08 at 5:16 am

I have a prime and a non-prime account, and saw the prime account come up at 17.12 an the non-prime come up with 10.45 + 6.68 shipping, or 17.13. I never saw the 14 dollar price come up. If you look at the “Used and New” pricing it will slow you all of the prices sorted by price + shipping cost ascending. So even though the item price may be less, the total cost is higher.

We will now double check everything, but I believe that Prime is still a good deal.

135

RW Rogers 12.23.08 at 5:26 am

That includes free shipping period. This is confirmed by the following in an email I received from the Director of Strategic Communication at Amazon that includes the following: “Prime members receive free shipping”.

It sounds like you are being obstinate and quoting Berman out of context. From the amazon.com website, which you apparently never bothered to read before signing up or since:

Eligible products will be designated on the product page, in the order pipeline, or at check-out. Generally, most items eligible for Super Saver Shipping are also eligible for Amazon Prime Shipping benefits. The program is limited to products sold by Amazon.com and by third-party merchants participating in the Fulfillment by Amazon program.

The following items are not eligible for expedited shipping under Amazon Prime:

* Amazon.com Gift Cards
* Oversize or heavy items*
* Items regulated as hazardous materials
* Other items with special shipping characteristics*
* Products sold by third parties, such as Target, or through third-party areas, such as Amazon Marketplace.

It’s all there, in black & white. Nothing “shady about it.” By the way, had you bothered to do even a minimal amount of fact-checking about Amazon Prime before posting, you would have discovered not only that webpage but articles about the effect of Amazon Prime on the bottom line for the company.

More importantly, a simple note to Amazon would have cleared up your original misconception. My own inquiry appears to have elicited the email you received from Berman about 2 hours later. As you are a professor of communications, one would think that you especially would understand the idea that “to communicate is the beginning of understanding.”

136

The Raven 12.23.08 at 5:32 am

Amazon.com is not a free market and is not subject to normal competition. There is no “elsewhere” to go. Neither is iTunes (90% royalty on independently distributed music), audible.com (similar), PayPal (arbitrary payment practices), EBay (hassling small sellers), Craigslist (criminal hangout). Krawk!

137

Zamfir 12.23.08 at 8:43 am

Amazon.com is not a free market and is not subject to normal competition

Why? I can hardly think of a shop that is more subject to competition: if there is any shop somewhere in the whole world that will sell and ship things to me cheaper, I can and do switch in a few minutes.

Ezter, if I understand you correctly, you’re saying that Amazon puts part of the shipping cost in the product price, so that Prime (or Super Saver) users profit less then they thought they would. I think you are right about that, but I don’t think that’s cheating in any way. Which part of the price is called “shipping” is rather arbitrary, and when you signed up for Prime you had already perfect information about the way Amazon makes that division.

In another light: Prime gives you a discount, called “shipping”. There is no reason why that discount should be the true shipping costs to Amazon, as long as you can find out, before signing up for Prime, what the discount is going to be.

138

Dave 12.23.08 at 9:22 am

Wow, 136 comments on the question of who’s ripping who off for less than the price of a cup of coffee. Priorities, folks, priorities…. At least try to make some general points amidst the squawking.

139

jack lecou 12.23.08 at 1:57 pm

Ezter, if I understand you correctly, you’re saying that Amazon puts part of the shipping cost in the product price, so that Prime (or Super Saver) users profit less then they thought they would. I think you are right about that, but I don’t think that’s cheating in any way. Which part of the price is called “shipping” is rather arbitrary, and when you signed up for Prime you had already perfect information about the way Amazon makes that division.

Yeah. I wouldn’t say “perfect” information, exactly. But I still don’t get where the beef is.

Because of the availability of various free or reduced price (slow) shipping options on some items, it’s obvious that some part of the markup on (at least) those items probably goes to help defray shipping costs.

Eszter, the only way I can parse your remarks to make sense (“That includes free shipping period.”) seems to have you saying that you expected Prime membership to entitle you to a discount of that basic shipping markup off the listed price, and then free 2-day shipping on top of that.

I’m just not seeing how that was promised, even implicitly.

140

justcorbly 12.23.08 at 2:06 pm

Prime Shipping is a shady product…

That’s an unwarranted accusation.

Amazon clearly indicates that Prime applies to items sold and shipped by Amazon, and that it does not apply to items sold and shipped by other vendors selling via Amazon.

I’ve used Prime for a number of years and have never found it confusing or deceptive. When I buy something at Amazon from a non-Amazon vendor, I’m clearly told that the puchase is not elegible for Prime shipping.

Prime pays off for me because I easily buy enough from Amazon each year to more than cover the annual Prime fee.

141

neudoxis 12.23.08 at 3:22 pm

Eszter, I think your irritation is entirely misplaced. Prime pays for 2-day shipping and reduced rate on overnight shipping. Ground shipping for non-members is already free for orders over $25. Prime members are shown the Amazon item first. Prices for items sold by Amazon are exactly the same for Prime members and non-members. The $79 fee is a miniscule cost for instant gratification.

I do want to caution about buying sensitive electronic equipment from Amazon because their packaging is minimal. Check out B&H, Beach or Adorama. Shipping prices vary. Be aware that products like Canon cameras have prices that are dictated by the manufacturer. If you find an item priced lower than most other retailers, it may be grey market.

(I’m not affiliated with Amazon other than as a happy customer. )

142

Donald A. Coffin 12.23.08 at 3:29 pm

Transcend 8 GB SDHC Class 6 Flash Memory Card TS8GSDHC6
Other products by Transcend
——————————————————————————–
List Price: $32.99
Price: $12.63

143

eudoxis 12.23.08 at 5:27 pm

Eszter: “The issue concerns being pointed to different vendors with different product and shipping costs that all seem to add up to the same $17.13. This still means that those with a Prime membership end up paying more for the product on the whole when including shipping costs already paid for the Prime membership.”

No, the Prime membership pays for the difference between ground shipping and 2-day shipping. And, it’s a bargain.

144

The Raven 12.23.08 at 5:44 pm

“The best money is made by charging for services you never
provide. Enjoy the feeling of power.”–Clipcoin’s Guide for
Capitalists
, Mammon Press, Hell, 400th anniversary edition, ©2000 CE.

Caw!

145

Eszter Hargittai 12.23.08 at 6:14 pm

Unlike those of you who insist on repeating the same points over and over again, as I noted earlier, I’m not going to engage in that activity since stating the same thing repeatedly doesn’t seem to change people’s mind too much. Some of you think I don’t get it while others of us are equally convinced that you don’t get it. Voila.

I put the order for the camera in through B&H (same price) as it came highly recommended by several people (not just here but the various other venues through which I’ve been talking to people about this experience). It comes with free overnight shipping so I should be able to play with it soon.

146

Mike Kozlowski 12.23.08 at 11:18 pm

You got ripped off — I mean, you paid $79 for Amazon Prime, but anyone could have gotten free shipping from B&H, so you double paid.

147

Jon 12.23.08 at 11:35 pm

“I’m not going to engage in that activity since stating the same thing repeatedly doesn’t seem to change people’s mind too much.”

Ah, isn’t the free flow of ideas and debate in the blogosphere great.

148

Total 12.24.08 at 12:50 am

Some of you think I don’t get it while others of us are equally convinced that you don’t get it.

The latter has a membership of around 1. The former has a membership of an indistinct but much larger number.

149

John S 12.24.08 at 4:43 am

Late to the game, but here goes.

Usually these price discrepancies/third-party vendors happen with products outside of Amazon’s core products (book, music, movies). Usually when this happens, I’ll go double-check the price on buy.com or froogle or similar sites. Sometimes I get a better price, sometimes not. If not, I then go directly (not through Amazon) to the 3rd-party vendor listed by Amazon–sometimes the price/shipping combo is cheaper that way.

When ordering larger electronics stuff it’s almost always better to go through good-rep specialized retailers (B&H, Crutchfield, etc.) since you can deal with them directly if there’s a problem. For rinky-dink $20 stuff, the big benefit of ordering from Amazon (even with the higher price and prime shipping) is that you’re getting a very reliable retail experience 99% of the time–two days, tracking info, email notification, decent packing. Not so much with the third party vendors–when I’ve ordered low-price stuff from these third-party people, shipping was variable, sometimes taking 2-3 days just get the item into the mail, and sometimes the packaging sucked (eg, a cell phone battery not in a box or even a bag, just rattling around the packaging material).

Moral–I don’t think Amazon should offer 3rd party vendors–it dilutes their rep for reliability (and evidently “fair” pricing [for some])–and if you don’t like the whole shipping/price combo for that item, use froogle, etc. to get the bestest price and save 79¢ or so.

150

Bob Monsour 12.24.08 at 12:43 pm

Can’t wait to hear about the camera. I just hope it arrives intact. Kidding…

151

Cognitive Dissonance is a b---- 12.24.08 at 3:23 pm

Eszter, perhaps the reason people keep repeating the point is that you are, in fact, just wildly off base here. Since you continue the ludicrous slander that there’s something “shady” about Amazon’s Prime service, the critique headed your way is wholly warranted. The “per se” qualifier to the daft price discrimination claim is also inane.

There’s nothing shady about this. Amazon is following a simple and sensible algorithm here:
1. IF Amazon doesn’t directly supply the product AND user is a Prime member, then show the lowest priced supplier that supports the Prime shipping option.
2. IF Amazon doesn’t directly supply the product AND user is not Prime member, then show the lowest price supplier.
3. In both cases, show all supplier options, showing the lowest price available before the click-through, so that consumer can choose from the full range of options.

What on earth is shady about that? Moreover, showing lowest price available from all suppliers pre-click-through goes the extra-mile to be transparent about choices and alerts you to potentially better deals. It also certainly does not, as you claim above, “leave prime users paying more.” Prime subscribers have the same lowest-cost options as everyone else. They just have the additional option of an outside vendor who is willing to honor Amazon’s prime shipping.

152

MarkUp 12.24.08 at 5:35 pm

”Eszter, I think your irritation is entirely misplaced. Prime pays for 2-day shipping and reduced rate on overnight shipping. Ground shipping for non-members is already free for orders over $25.”

No, ground shipping is already included in the price – orders under a certain threshold have an added charge and some items after paying an added fee get additional service[s].

Prime Shipping is a shady product…

That’s an unwarranted accusation.

Most marketing ploys are “shady” in that they strive to get one to spend more, often on items not needed.

“I’m not going to engage in that activity since stating the same thing repeatedly doesn’t seem to change people’s mind too much.”

Uh, isn’t repetition one of the main tools in the marketers box, be they selling DSLR’s or political candidates? I mean, read my lips; trust but verify lest I feel your pain and then will be reduced to needing to change my way of thinking to a faith based system of hope™.

153

Dan 12.24.08 at 5:51 pm

“Prime Shipping is a shady product though and I don’t recommend enrolling in it.”

Shady? How so? It’s the best thing since sliced bread. I only wish Amazon would tweak their search function to allow it to return only items that are “Prime” eligible.

154

Eszter Hargittai 12.24.08 at 7:25 pm

The latter has a membership of around 1. The former has a membership of an indistinct but much larger number.

Shows how closely you’re reading the comments. Plus a cute naivete about the idea that all correspondence about an issue occurs in the comments to a Crooked Timber blog thread. I mean, sure, there are some great discussions here, but conversations do actually occur elsewhere, too.

a simple note to Amazon would have cleared up your original misconception

You didn’t read my original post very closely, and I quote: “I sent Customer Service three notes already, but nothing helpful has come back so far.” I didn’t write this post until it was clear I wasn’t getting anywhere with Customer Service.

The thread has definitely been useful regarding my confusion, because it clarified that the results were due to different vendors. The idea that not everything is eligible for Prime shipping wasn’t news to me, I already knew that. Instead of assuming that I’m clueless, you could go back and read my comments and try to understand where I’m coming from (or try to understand Prime enough to know where I’m coming from, clearly some of the comments above don’t get the details of Prime and that’s why they don’t understand my point).

By the way, if you don’t think your comment is worthwhile enough to sign your name and email address then I’ll have to assume it’s also not worthwhile enough for our attention.

155

Total 12.25.08 at 8:09 pm

Four!

156

Keith M Ellis 12.26.08 at 12:27 pm

Eszter, you are, actually, confused about this. I’ve just read all the comments carefully, as well as checked Amazon’s prices. Not to mention that I think well of you and think that there’s many opportunities to be confused and some of those opposing you in this debate are also confused.

Bottom line: Amazon isn’t charging “Prime” members “twice” (or merely more) for shipping than non-Prime members because non-Prime members are never offered lower base prices for items than are Prime members for Amazon’s own items.

Furthermore, a Prime membership doesn’t just give members an upgrade to two-day shipping for free (not including the cost of the membership, of course), it also really is free shipping on all items that are eligible that would not otherwise have had free shipping (because they weren’t part of a sufficiently large order).

Some people have tried to understand your objection by assuming that you incorrectly thought that “free shipping” in the Prime membership meant that shipping from 3rd party vendors would be free. I don’t think that’s where your confusion lies. I think that your confusion lies in the fact that those 3rd party vendors have base prices that are less than Amazon’s. And from that you conclude that you’re paying for shipping implicitly in that price, and then also paying for it with your Prime membership.

And this may be the case. It also may not be. It might be the case that Amazon has higher overhead than the others’. The deeper problem here is in the assumption that there’s a discrete shipping price at all with any of these vendors, Amazon included…that Amazon’s base price is greater than the 3rd party vendors doesn’t mean the shipping is included in it any more than it means that the much higher cost at a brick-and-mortar retailer includes “shipping”. The cost is higher, for whatever reason.

Muddying the waters is the fact that all the vendors have retail+shipping totals that are the equal to the Amazon base price (which is what the Prime member pays, total). This is simply the result of the fact that they are competing with Amazon and each other to have the lowest possible price. Note that the non-Prime Amazon customer pays the highest amount (when shipping is included) in this particular example of this item. None of them are likely to actually be paying the amount quoted to their shipper. Again, it’s a mistake to think that there’s a discrete shipping cost on a per item basis that you can then quantify as being the amount you’ve paid for with your Prime membership. Another vendor I use offers “expedited” order fulfillment. Does that mean that the $2.99 I might pay for a particular order to be “expedited” is what it cost that vendor to “expedite” that order? Of course not.

The only comparison that has any relevance at all is the comparison between what Prime and non-Prime members pay for the same item, not including shipping. And it turns out, they pay the same price. Therefore, Amazon is giving you exactly what they said they’d give you for your Prime membership: free two-day shipping on many items that are sold directly by them. Whether that’s worth $79 a year depends entirely on how you use Amazon. If all your purchases would have qualified for their free shipping anyway, and you never wanted them shipped within two days, then it’s not worth it. If many of your purchases wouldn’t have qualified for the free shipping, and especially if you often choose two-day shipping, then it’s worth it.

Given what I’ve written above, if you still have objections, could you try to explain them more clearly?

157

Eszter Hargittai 12.26.08 at 2:18 pm

Keith, thanks for reading all of this carefully and responding in kind. Since I know your intentions, I’m happy to engage in a conversation about this and will email you off-blog with more on my perspective.

158

Nigel Kersten 12.26.08 at 3:13 pm

It seems a little rich to spark off a conversation like this by claiming Amazon discriminates on prices and then decide you want to take it offline when people point out the errors in your reasoning Eszter.

159

Total 12.26.08 at 3:31 pm

Five messages gone!

160

justcorbly 12.26.08 at 8:47 pm

Most marketing ploys are “shady” in that they strive to get one to spend more, often on items not needed.

That, MarkUp, is an odd way of defining shady.

Where I come from, shady means dishonst or criminal. Trying to get me to buy something I may not actually need is neither.

I’ve seen no evidence that Amazon Prime is dishonest or criminal. Is it intended to increase Amazon sales? Sure, but that’s not shady. It’s clearly explained that Prime applies only to items shipped by Amazon, and it’s also clearly explained that it does not apply to the many other vendors who sell on Amazon.com.

161

MarkUp 12.26.08 at 10:27 pm

… is an odd way of defining shady.

Trying to get me to buy something I may not actually need is neither.

Odd perhaps, but not inaccurate. Perhaps I see more gray in the definition of “shady” than you. If I thought it to be outright dishonest/untruthful/criminal I would have stated such, but since I do not see it that way I stuck with shady. Maybe that is not a new and improved way to see it but it is how my eyes work. Alas, trying to get you to buy what you don’t need can be both dishonest and criminal – not that I am saying this instance is in particular – but when first introduced neither were subliminal frames in film. One has to wonder though as pointed by others as well, about the social conditioning we have all been receiving in these areas; need, need it faster, status associated with having and having faster and the ultimate costs incurred along the way. I must stop here and go play with the lump of clean coal Santa brought me yesterday [via FedX overnight by 10am service of course].

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justcorbly 12.27.08 at 12:30 am

Trying to convince people to buy what they don’t need is the essence of a market economy. Otherwise, we’d all still be living in one-room huts in scattered villages walking out to the fields every morning. Human are never satisfied. Marketing just takes advantage of the trait.

As for social conidtioning, well, we all have to take responsibility for the things we allow to be done to oursevles. If people are conditioned by advertising, then they, at least, ought to be clever enough to recognize what’s going on. Frankly, though, I don’t see any difference between being conditioned by an ad and conditioned by envy over the neighbor’s Shiny New Toy. It’s just the way we work.

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MarkUp 12.27.08 at 1:20 am

”Frankly, though, I don’t see any difference between being conditioned by an ad and conditioned by envy over the neighbor’s Shiny New Toy.”

Where did that bout of envy come from? It wasn’t there yesterday. Yes, good folk do regularly push us towards coveting our neighbors stuff, but that doesn’t make it “just the right thing to do” does it? Where did the “one room hut” come from? Nothing wrong with a clear view of the stars or a good cave is there [as long as they have HD cable and a front loading washer]?

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