This Is How Amazon Loses

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Algorithmic merchandising leaves a bad taste in my mouth. Slowly but surely, it will erode trust for all the tech giants.

Yesterday, I lost it over a hangnail and a two-dollar bottle of hydrogen peroxide.

You know when a hangnail gets angry, and a tiny red ball of pain settles in for a party on the side of your finger? Well, yeah. That was me last night. My usual solution is to stick said finger into a bottle of peroxide for a good long soak. But we were out of the stuff, so, as has become my habit, I turned to Amazon. And that’s when things not only got weird, they got manipulative. Sure, I’ve been ambiently aware of Amazon’s algorithmic pricing and merchandising practices, but last night, the raw power of the company’s control over my routine purchases was on full display.

There’s literally no company in the world with better data about online purchasing than Amazon. So studying how and where it lures a shopper through a purchase process is a worthy exercise. This particular one left a terrible taste in my mouth – one I don’t think I’ll ever shake.

First the detail. Take a look at my search results for “Hydrogen Peroxide” on Amazon. I’ve annotated them with red text and arrows:

Amazon Hydrogen P.png

As you can see, the most eye catching suggestions – the four featured panels with large images – are all Amazon brands. Big red flag. But Amazon knows sophisticated shoppers like me are suspicious of those in house suggestions, so it’s included a similar product in the space below its own brands (we’ll get to that in a minute).

Above the featured items are ads: sponsored listings that are not Amazon brands, which means the advertiser (a small player named “Blubonic Industries”) is paying Amazon to get ahead of the company’s own promotional power. Either way, Amazon makes money. Second red flag.

By now, I’ve decided I’m not interested in either the sponsored brands at the top, or Amazon’s four featured brands, because, well, I don’t like to be so baldly steered into buying Amazon’s own products. Then again, before I move down to the results below, I do notice something rather amazing – Amazon’s familiar brown bottle of peroxide is really, really cheap – as in, $1.29 cheap. There’s even a helpful per oz. calculation next to the price, screaming: this shit is eight pennies an ounce cheap!

Well, I’m almost sold, but because I hate to be directed into purchases,  I’m still going to consider that similar brown bottle below, the one with the red label. Amazon knows this, of course. It’s merchandising 101 – make sure you give the consumer choices, but also, make sure the most profitable choice is presented in such a way as to win the day.

So my eye moves down the page to check out the second bottle. It’s from Swan, a brand I’ve vaguely heard of. Then I check its price.

Nine dollars and sixty nine cents.

Which would you buy? After all, this is a staple, a basic, a chemical compound. And you trust Amazon to get shit right, don’t you? I mean, a buck and change – nearly nine times cheaper? What a deal!

So…my eyes revert to Amazon’s blue labeled bottle. It wouldn’t have a four-star plus review if it burned your skin, right? And that’s when I notice the tiny icon next to it, which looks like this:

What’s this? Is this yet another annoying subscription service?  Ever since we moved to New York, my wife and I have tried to figure out Amazon’s subscription services (Fresh? Pantry? Prime Now? Whole Foods Delivery? Who knows?!). I’m already deeply suspicious of any attempt by Amazon to lure me into paying them monthly for a service that I don’t understand.

But…a buck twenty nine! So I click on the bottle, and the landing page is super clean, and there’s no obvious Prime Pantry mention. Plus, it turns out, that bottle from Amazon is the Whole Foods generic brand, which for whatever reason seems a bit better than a generic Amazon brand.  Did I just get lucky? Maybe  I can just get some super cheap chemicals delivered in a day to my door, and my annoying hangnail will be a thing of the past soon enough….Right?

Here’s the landing page:

Screen Shot 2018-10-10 at 8.34.10 AM.png

Looks great, the price is amazing, but…Uh oh. I can’t get this bottle of peroxide until Sunday. By then, I’ve likely lost my finger to a flesh eating bacteria. As I feared, this bottle is nothing more than a baited fish hook for one of Amazon’s subscription offers – which I find out, will cost somewhere between five and thirteen bucks a month. I’ve signed up for Prime Pantry by mistake in the past, and it wasn’t a smooth or enjoyable experience. No thanks. I click back to the original search results. Seems to me Amazon is gaming the shipping deals.

Well of course it is. I’m no longer a happy Amazon customer at this point. Now I’m just annoyed.

But what’s this? If I scroll down below the $9.69 bottle, there’s another choice, also from Swan, and, it seems, exactly the same, if one is to judge just by the image (and we do judge just from the images, let’s just admit it). This one costs almost half as much as the one above it. What’s going on?! Here’s an annotated screen shot:

Prime Peroxide.png

As you can see, there’s a lot going on. I’ve narrowed my choice down to two non-Amazon brands. They look nearly identical. The most significant difference, at least in terms of the information provided to me by Amazon, is the price – the top bottle is nearly twice as expensive as the bottom one. But the top bottle has a major benefit: I can get it nearly immediately! The bottom one makes me wait a day. Is the wait worth four or five bucks? Hmm.

Also confounding: The bottom bottle has its price broken out on a per ounce basis – 32 cents, exactly four times more than the 8 cents-an-ounce bottle I just looked at from Amazon’s Prime Pantry. Ouch! Now I’m really annoyed, and confused. My eyes dart back up to the $9.69 bottle. As I’ve shown with the empty red circle, there’s….no per-ounce breakdown shown by Amazon. It does tell me that this particular bottle is 32 ounces, whereas the bottom one is 16 ounces.

But why not do the math for me? A quick calculation shows that the top bottle comes out to about 30 cents an ounce – two cents less than the bottom bottle. Why not show that fact?

This, folks, this is algorithmic merchandising at its finest.

Amazon knows exactly how many clicks it’s going to take for me to reach shopping fatigue. Not “on average for all shoppers,” or even “on average for each shopper who’s ever considered a bottle of hydrogen peroxide.” Amazon knows all of that, of course, but it also knows exactly how long it takes ME to get fatigued, to enter what I like to call “fuck it” mode. As in, “fuck it, I’m tired of this bullshit, I want to get back to the rest of my life. I’m going to buy one of these bottles.”

And because there’s no per-ounce breakdown of the 32-ounce bottle, and because that makes me suspicious of it, and because hell, who ever needs 32 ounces of hydrogen peroxide anyway, well, I’m just going to buy the $5 one.

Ca-ching! Amazon just made a nearly seven percent markup on my purchase. It took five clicks, 15 seconds, and a vast architecture of data and algorithmic mastery to make that profit. Each and every time we purchase something on Amazon, that machinery is engaged in the background, guiding us through choices which insure the company remains the trillion dollar behemoth we know and…

Love?

***

Do you love Amazon anymore? For that matter, do you love Facebook, Google, or Twitter? Interactions like the one I’ve detailed above are starting to chip away at that presumption. Personally, I’ve gone from cheerleader to skeptic over the past few years, and I’m broken out into full-blown critic over the last twelve months. I no longer trust Amazon to have my best interests at heart. I’ve lost any trust that Facebook or Twitter can deliver me a public square representative of my democracy. I’ve given up on Google delivering me search results that are truly “organic.” And YouTube? Point solution, at best. I can’t possibly trust the autoplay feature to do much more than waste my time.

What’s happened to our beloved tech icons, and what are the implications of this lost trust? In future posts, I plan on thinking out loud on that topic. I hope you’ll join me. In the meantime, I think I’ll stroll down to CVS and buy myself another bottle of hydrogen peroxide. By the time Amazon’s comes, I’m sure my hangnail will be a distant memory. But that taste in my mouth? That’s going to remain.

***

Update: Many readers have pointed out that I missed the fact that the top package of peroxide was, in fact, a two-pack. True that, and it would have changed my on-the-fly calculation around which to buy, given the per ounce comparison. However, it would not change the fact that the act of not adding the per ounce calculation directly on the page somehow discolored that choice. 

Also, a rather rich post note: The bottle I did buy never came. It was “lost” – and Amazon offered me a refund. Sometimes it pays to just hit CVS. 

(cross posted from Searchblog)

25 thoughts on “This Is How Amazon Loses”

  1. I’ve been on Amazon Prime for 2-3 years. Not one time has my purchase ever qualified for next day or expedited delivery. Mostly it is 7,8,9 days.

    1. I ditched Amazon awhile ago. I like supporting local businesses and I hate supporting power hungry tech giants.Everyone reminds me of the money they save…but some things are more important. It is up to us to be vigilant about our freedoms…we haven’t been to good at doing this. It is time to start now.

  2. The top swan product is actually a two pack as per description, and the image on amazon shows one bottle as being 32oz, so 64oz all together… Though I don’t know why anyone would need that much.

  3. “The most significant difference, at least in terms of the information provided to me by Amazon, is the price – the top bottle is nearly twice as expensive as the bottom one.”
    Its twice the quantity as well…

  4. The non amazon products you mentioned are from third party sellers. The one making money from it is the third party seller. Know your facts before coming up with such silly theories.
    The Amazon brands have a much better price when bought in bulk. Its hard to make money on single items which is why they prime pantry.
    Other services like Prime Now, Wholefoods Delivery are free with Prime and there is no extra charge.
    Amazon is a type of company that works hard to charge customers less.
    Know your facts first, the comment.

  5. John, since you seem to be neurotic about Amazon’s “merchandising”, go and check out a dozen other ways Amazon leaves bad tastes. I’ll give you one starter: check out simple “widget” electronics (mostly from China). Anything from LED flashlights to bug zappers, etc. Clue: the excessive 5 star reviews. Then check when these 5-star reviews were input. Sometimes 40-50 “reviews” were input in the same hour. And weirdly enough they are all “verified” purchases. I’m not sure how that is possible, but whatever. They are all written in *nearly* perfect English, but syntax and cadence are off. They “feel” like fake reviews, is the only way I can describe it. They glowingly mention some attribute which “normal” Americans wouldn’t care about. Just small details, but huge when they all overstuff the ballot box. Then the 3 REAL 1-star reviews mention the truth: The thing is pure junk, and “How’d this thing get all these 5-star reviews?!?!” Anyhow, I could go on and on about Amazon too. They could EASILY rectify this problem, but they don’t care. I’ve even called their CS and again, they just don’t care.

    1. Amazon actually has improved this a lot in the last year or two. There are still instances of this review abuse, but it’s much rarer than it used to be.

      Also, though it only supports your point that this is something fixable by Amazon, it is possible to quickly check the quality of receive by using the FakeSpot service.

  6. I am reallty trying to understand what are you complaining about and failing. I honestly would just go out and get it from target or nearby dollar store, mostly because it is immediate and like you said, it is a basic product. Most of the time shipped things from Amazon are cheaper and better then what you get in the store.

  7. I will say this: I’ve done Prime Pantry a couple of times. It’s not a subscription thing per se, it’s a fixed-shipping-price-per-large-box thing. So it’d cost you like 5.99 to ship that bottle of whatever in a needlessly large box, but you also could fill that box up with additional prime pantry items and the shipping cost would still be 5.99

    It’s a decent deal, but your core thesis is still correct: it’s confusing and annoying, and it’s hard to justify when the entire point of Prime is free shipping

  8. Hm, I remembered Prime Pantry being a non-subscription thing, but apparently now there are subscription and non-subscription variations. Even more convoluted than before. Fun.

  9. Good article. Great writing. I agree with your POV…disconcerted over the whole tech mess. Not to be all conspiracy theory here, but these algorithms are driving a wedge of ignorance in our culture all while making a few very, very rich.

  10. This does sound like paranoia. Do you really think AI is that smart? Maybe your hangnail stopped you thinking clearly.

    BTW you don’t have to buy from Amazon, but you do have to own a phone from Google or Apple. Shouldn’t that make you mad?

  11. I really tried to put myself in the authors shoes to understand this complaint and I’m frankly unable to empathize. It boils down to not listing the price/oz on one of the listings (the one that is flagged as best seller)? And the genesis is an overarching distate for private lable brands? I doubt there are many consumers who are (i) price sensitive and (ii) anti-store brands as these are inherently incongruous. Besides, when you go to CVS you will see the same thing, products that are paid for by brands positioned to catch your eye, alongside CVS private label goods. I guess it makes it more palatable because you are afforded less information in CVS and therefore don’t feel the sponsorship aspect is so much in your face? To each their own.

  12. Have you ever tried to comparison shop by unit price at a grocery store? It’s not much better since the unit size will randomly change between products (and often even the whole means of quantifying, such as volume vs. mass). Also, if the product is on sale, the unit price could take the sale into account, or not. This is hardly a uniquely ecommerce problem, let alone Amazon.

    Add to that the fact that grocery stores are at least merchandising everything themselves. Third party Amazon listings are at the mercy of how well the seller populates the structured data that drives things like unit pricing display. Amazon will certainly manipulate your user experience to drive conversion, but I think you’re partially seeing ghosts here.

  13. 1) My first thought is that this a “first world problem” if there ever was one. If anything, this is proof of how spoiled for choice Amazon and the like have made us. “Woe is me, I can’t find an option that deposits a bottle Hydrogen Peroxide in my hands in a day for practically nothing!”

    2) That said, yeah, I get it. Parsing the dizzying array of sellers, programs, and shipping contingencies is an annoying project that one is forced to undertake almost anytime you buy something from Amazon.

    3) I think you’re attributing too much malevolence to the Amazon “algorithm”. There may be less method to the madness than you think. For instance, the failure to include a price per ounce in one instance is almost certainly because the third party seller didn’t populate the necessary fields in their listing. That may be a failing of Amazon for not insisting on a certain level of thoroughness, but it’s almost certainly not some sort of devious scheme to “trick” you.

    4) It helps to categorize Amazon item listings when approaching a listing. Broadly:
    a) Local shippers. These are the programs like “Fresh”. It doesn’t make sense to deliver a dollar worth of bananas to you for free, so these require either a subscription, minimum order size, or both.
    b) Amazon warehouse shipping. These are usually eligible for 2-day shipping, but often require bulk buys of inexpensize items.
    c) 3rd party sellers. These are a mixed bag. Occasionally they’re the best option, but are often out to capitalize on the ignorant or lazy with high prices or shipping costs.

    5) Overall, cheap (especially cheap and heavy) items like the one highlighted in this article are the worst ones to buy online. The labor and shipping costs involved with getting you a $1 bottle of hydrogen peroxide dwarf any potential profit margin. That means all options are going to force you into some sort of expensive compromise (either buying way more than you need, overpaying for the item, or paying a high shipping/handling fee). Until Amazon invents a teleporter, this will probably be true for a long time to come. The clear choice here is to walk a block to your local pharmacy and save yourself the headache.

  14. I’m still trying to determine why they need two different “Our Brand” versions of hydrogen peroxide, Mountain Falls and Solimo.

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