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Algorithmic Prices on Amazon

I’m trying to write 38,000 more words on Ten Gentle Opportunities (basically, the rest of it) by Worldcon, so I won’t go on at length about this, but today I stumbled on some information on a topic I mentioned briefly several years ago: The weird way used book prices wobbulate around on Amazon. As it happens, the goofuses are apparently using software originally developed for high-speed stock trading. Techdirt explained the process in a little more detail last year, providing us (finally) a clue as to how a mild-mannered book on the genetics of certain flies could come to command the super price of $23,698,655.93. Lots more out there if you’re interested.

In short: If you define your book’s price as 1.270589 times that of your competitor’s, and your competitor defines his price as 1.270589 times yours, well, you’ll both be rich in no time…or at least pricing your books as though you were. Fly genetics never had it so good.

What remains a bit of a mystery is why you’d want to price your books above your competitor’s and not below. Unless…the game is to buy the book from your competitor when you find a buyer so dumb as to buy the book from you, at 1.270589 times the price they could get it elsewhere. It’s likely that the fly genetics book was not in either seller’s hands at any point.

Such clueless buyers may exist–after all, people are still installing smileys and comet cursors and anything else on the Internet labeled “free.” This implies that the magic number 1.270589 is in fact the atomic weight of Sleazium, which absorbs certain subatomic particles, particularly morons, better than anything else ever discovered.


  1. Aki says:

    “the goofuses are apparently using software originally developed for high-speed stock trading.”

    Maybe based on Gaussian copula? 😉

    “Recipe for Disaster: The Formula That Killed Wall Street”

  2. Suep says:

    Seems likely. I know of at least one seller on eBay who does exactly that. Some people are real jerks… 🙁

  3. Rich Dailey says:

    I read somewhere that sellers with huge positive feedback from buyers will price a book that they do not have higher than their competition. Return buyers will pay a little more for the piece of mind of doing business with a familiar seller.

    Seller buys from the competition. The competition ships to the end user. Could explain why I’ve received used books with strange return addresses that were not the seller I conducted the transaction with. And no price on the packing list. Just a thought.

  4. Rich Dailey says:

    Re: Clueless Buyers – And then again, we recently witnessed thousands of people post pictures of their credit cards on twitter, so stupid is still a bug that remains unpatched.

  5. Elvis Newton says:

    While we are talking Amazon. What is the M.O. of sellers that advertise a POD book BELOW the price set by the author ? I have a friend who, 2 weeks ago, posted a $99.00 technical book via Createspace on Amazon. He owns the ISBN. In less than a week, there are 7 other sellers advertising the book at discounts. Amazon told him that the sellers had “used” books, which is impossible because he hasn’t sold any yet ! What is going on ? Do they get orders and then try to convince the author to sell them a copy at authors discount ?

    The book in question :

    1. Might be more bot behavior. The botmaster may assume that used books are out there, and once an order comes in will try and find one. If no book can be found, the software can generate an email saying, “Sorry, that copy has been sold!”

  6. Elvis Newton says:

    Bots, that is interesting since it is automated, they just keep on top of every new listing.

    I talked to him last night and I know the real reason. He checked off Amazon, Createspace and “Bookstores and Other Dealers” on his distribution list so these are “other dealers” who can order from Amazon with some discount off list price which is then less net to him. I think he believed he was selling to physical stores but unknowingly is allowing on-line “dealers” to undercut his list price. If the list price is important, he shouldn’t have done that since these “dealers” are all virtual. In this case, I suspect he is OK with the net even with it going through the dealers. Having all these dealers listing it at different prices does give the impression (to the uninitiated, as I was) that it is selling since so many have it “in stock”.

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