
The High-Speed Trading Behind an Amazon Purchase - prostoalex
http://news.morningstar.com/all/dow-jones/us-markets/20170326515/the-high-speed-trading-behind-your-amazon-purchase.aspx
======
Spooky23
Sounds like a solution looking for a problem to me.

For all of this complexity, Amazon rarely has a significant price advantage
versus most retail stores.

From a customer point of view, competitive categories have a flea market
quality to them. For a company that is usually optimized for customer
experience, this is a weird science experiment.

IMO, they should make price adjustments less fluid. Require merchants to get
to the lowest price as soon as possible, and punish stupid resellers that
throw up divergent high/low prices by forcing them to live with it.

~~~
maxander
I suspect (here as with the earlier story about imposter goods on Amazon) that
the explanation for Amazon's behavior is that it doesn't have the resources to
moderate the system its created. Disallowing price adjustments altogether
wouldn't work for many categories- sometimes the price of milk just _does_ go
up, and retailers can't always just eat the difference. Disallowing _only
manipulative_ price adjustments would require either a sophisticated AI (which
would be liable to fail in perverse-looking ways) or an expensive team of
human analysts (which would at least only fail in plausible-looking ways.) But
until these sorts of issues really start effecting Amazon's bottom line, its
not going to touch them.

~~~
Spooky23
It's hard to know how it affects them because Amazon is held to a special
standard where making money isn't really a thing.

I know anecdotally that non-techie people whom I associate with increasingly
are wary about Amazon after getting scammed by fake phone accessories or
gouged by Christmas toy prices.

When you consider that Amazon is moving into new categories where trust is
critical, like food, this is going to hurt them. Every grocer peddles trust,
"we're good neighbors", etc.

------
rahilb
Once upon a time I worked at an ebook company. We were naively trying to
compete with Amazon (i.e. we sold every book we could get our hands on).

Sometimes we'd negotiate a deal with a publisher, and slash the price of a
book to a point where no one involved in the transaction was making money,
sometimes we and the publisher would be losing money... Without fail within an
hour the list price of the content on Amazon would be exactly what we set.

Amazon were/are prepared to eat the loss: I suspect this is the case for all
products that are sold by Amazon. It was a very effective strategy for them.
My company went into administration after just 9 months.

~~~
ortusdux
I once read the account of a student who gamed the bots sellers use to
competitively price their products in order to get cheap textbooks. The person
made a dummy seller account, setup a bot, and listed the books they needed. As
they lowered their listing prices, the real sellers' bots auto-price matched.
The student then bought all their books at ~1/10th the original price,
canceled any orders they may have received, and deleted their store.

~~~
i336_
That sounds heartwarmingly difficult to police...

------
ikeboy
I've used several repricers, it's a must when selling competitive products
with a large numbers of skus.

One thing I'll note is that there's up to a 15 minute delay before a price
change takes effect.

Also, Amazon will often "suppress" the buy box if no sellers have a good
price. You can still buy, but there's an extra step needed. "Other sellers",
then add to cart.

------
KKKKkkkk1
I don't see what's so special about continuously updating your price as a
seller. This happens in pretty much every grocery market in the Middle East or
Eastern Europe.

I also don't understand how the supposedly fierce competition between sellers
ends up yielding prices that are higher than offline stores. Seems the
reporter missed the true story.

~~~
tedunangst
Is it common to see a guy hawking $1000 tomatoes from an empty stall in such
markets?

~~~
dx034
No but that's also not what happens on Amazon. Prices may double but that's
also pretty standard for fruits & vegetables when supply doesn't match demand.

------
mirimir
Amazon’s $23M book about flies (2011)

[https://news.ycombinator.com/item?id=10289742](https://news.ycombinator.com/item?id=10289742)

------
thinkloop
It's interesting to know that products on Amazon might not be the lowest
price, or always close. I thought there was more manual price research and
setting, like Walmart.

~~~
Animats
Walmart can't change their prices as fast; humans have to re-label things. For
now.

Brick and mortar retailers can use radio-controlled e-ink shelf price tags for
minute by minute price changes.[1] This hasn't really caught on yet, but the
technology is ready.

[1] [http://www.eink.com/esl_tags.html](http://www.eink.com/esl_tags.html)

~~~
wfunction
> Brick and mortar retailers can use radio-controlled e-ink shelf price tags
> for minute by minute price changes.

How does that even work? You pick up the product and the price changes by the
time you go pay for it? Who would like that?

~~~
im3w1l
That's what you'd think. But with Best Price Just For You!™ technology, you
don't actually get the price on the shelf. You get the lowest listed price in
the last hour. If the price is raised you Keep Your Locked In Price™. If the
price is lowered you get the new better price!

~~~
ptero
IIRC one of the US grocers (stop and shop or Kroger?) actually tried that as
an ad for their store card: "you do not even know how much you will pay for
many products, but it will be a lower price". Needless to say this didn't run
for a long time.

------
whyenot
Here is a link without a paywall:

[http://news.morningstar.com/all/dow-jones/us-
markets/2017032...](http://news.morningstar.com/all/dow-jones/us-
markets/20170326515/the-high-speed-trading-behind-your-amazon-purchase.aspx)

~~~
sverhagen
Sorry for the off-topic, but why is this available free on Morning Star, and
paid-for on WSJ? Don't assume Morning Star is ripping WSJ, so is the pay wall
a lie (for this (sort of) article)?

~~~
rgbrenner
the author works for wsj.. both wsj and dow jones newswires are owned by news
corp. The article was published on dow jones newswires, which morningstar has
subscribed to and is paying for.

So the answer is, morningstar has paid for this article.. and they've decided
they can make it up using ads or other sources of revenue.

~~~
nodesocket
Wonder how much morningstar pays to syndicate? E.G. how much advertising
revenue until they break even?

------
downandout
I try to put this on all WSJ articles that make the front page. Here is a
direct link to this story that will auto-kill the paywall:

[https://m.facebook.com/l.php?u=https%3A%2F%2Fwww.wsj.com%2Fa...](https://m.facebook.com/l.php?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fthe-
high-speed-trading-behind-your-amazon-purchase-1490532110%3Fmod%3De2fb)

If you want a draggable bookmarklet that will bypass the paywall for all WSJ
articles, go here:

[http://salzeko.com/wsj/](http://salzeko.com/wsj/)

It would be nice if HN would make a change to their link submission code so
that it automatically changes WSJ URLs to use the Facebook redirect
workaround, since they are the one major site that disabled the Google
workaround. But until then we have to do it this way.

~~~
TheSpiceIsLife
Or _pay_.

~~~
downandout
Most people on HN are not WSJ subscribers. Given that the purpose of posting
links on HN is to be able to discuss them, WSJ links should either a) not be
posted here, or b) they should have a paywall workaround automatically built-
in. The entire reason that the "web" link exists is because it was assumed
that sites would not risk being deindexed by Google for cloaking, and would
therefore disable their paywalls when Google was the referrer. WSJ is the only
major site that has chosen to brazenly run afoul of Google's cloaking policy
(sadly, they have not yet suffered the consequences). So they warrant special
treatment here, and by implementation of the "web" link, HN has already shown
that it is willing to assist in paywall bypass.

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berberous
Off-topic: Am I the only who can never load the comments on WSJ articles? This
is across browsers (Firefox/Chrome) and platforms (Windows/Mac/iOS), and even
with adblockers turned off. This article says it has 36 comments, so it must
be working for most, but I can't seem to figure out why it never works for me.

~~~
pirocks
Works for me. Sorry that this comment isn't very helpful. Do you still get the
same problem on different network/region/country?

------
QuadraticFizz
Does anyone have a mirror? The article is behind a paywall.

~~~
jeron
[http://news.morningstar.com/all/dow-jones/us-
markets/2017032...](http://news.morningstar.com/all/dow-jones/us-
markets/20170326515/the-high-speed-trading-behind-your-amazon-purchase.aspx)

------
israrkhan
This is a very unfortunate trend where sellers are selling not based on the
value of the item/service, but demand/need of the consumer. It has been a
common practice in airline industry, and upto some extent in healthcare. But
now this practice is creeping into online shopping too. This can soon fall
into unethical territory. Imagine an item, that costs $1. Just because it
could be life-saving for someone, or someone needs it badly, you sell it at
much higher premium. You are not charging for your service, but exploiting
other people need.

~~~
bognition
you've just described capitalism

~~~
pmorici
Or price gouging. In capitalism if the price rises too high sellers should be
motivated to bring more supply to the market.

~~~
alasdair_
Assuming the seller lacks a monopoly, that is exactly what happens.

