Business — 07 March 2014

Why Do Amazon Prices Fluctuate So Much

Many people are not aware of this secret that the shopping website for Amazon keeps changing its prices on a frequent basis. In some cases, you may notice a price drop on a daily basis. On the other hand, you may also find a few cases in which price fluctuations have even happened on an hourly basis. If you are purchasing a product from Amazon, you might go worried about your payments being too high. Have you wondered on the reason behind these frequently fluctuating prices on this shopping website? Check it out here.

As Amazon is competing with several other merchants, it is using the idea of robo-pricing to its advantage. There are some trading software tools that help in tracking competitors’ prices on various products and accordingly alter your prices to undercut them by a preset amount. Like other merchants, Amazon is also making use of this technology to fluctuate its prices often. Such software tools help a company in beating its competition, as it can set a price margin that 

For example, Amazon can set a margin in their pricing against a stated competitor. Whenever that competitor is tracked to cut its price, Amazon’s software tools also bring down the prices of same products on Amazon’s website. Additionally, the predetermined margin of keeping a lower price is also maintained. Thus, this helps Amazon constantly stay on top of the competition. This further helps in attracting various customers who believe that they would always find lowest prices on Amazon.

Sometimes, this strategy also helps in gaining more profits. A fluctuating price never lets a customer predict whether they would soon get a better or a worse deal. This makes customers settle on the price that they see on their screens at the time of their purchase. However, this settled price might ultimately be higher than what Amazon could have gained after a few minutes. Thus, there are several of these reasons that drive Amazon to bring price fluctuations.


About Author

Anupam Jolly

With a bachelor’s degree in technology and over five years of experience in online content generation and distribution, Anupam Jolly has been creating and editing content spanning across a variety of domains. An avid environmentalist, Anupam Jolly believes that if humans can degrade the environment, they can save it from disaster too.

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