Amazonomics

Every morning I check on my Amazon account to see what I sold the day before and what shipped. May started very strong but then sales really dropped off. The reason? Amazon ran out of the most popular battery pack. Rather than just say they were out of stock, they let a number of third-party sellers offer theirs, at much higher prices. The $25 pack went up to $35 and as high as $49. And for me, sales for that model went to zero for two weeks. I felt bad for visitors and found out that Best Buy had them for $20, so I put in a link to their product page and could tell from Site Meter’s out links that a few people a day were following the link.

Last night Amazon must have re-stocked that product because the price was down to $20 (a new low for them, perhaps to match Best Buy), so I took away the Best Buy link. Already people are following the link again, and I will find out soon if people are buying again.

What amazes me about this is the inefficiencies of capitalism. Theoretically the internet should bring prices in line at a similar low level. While visitors to my web site knew not to buy, I am sure others must be buying from the higher priced affiliates. The Apple Store sells the same product for $50 and there are enough product reviews on that page for me to think they do a pretty brisk business.

2 thoughts on “Amazonomics

  1. The new low price worked. Three people bought that battery pack yesterday, one bought a differnt model, and I sold one book.

    I think people will pay $20 for just about anything. That’s a key price point. Over $30 and they start thinking about it.

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