
How Bots Seized Control of My Pricing Strategy - obiterdictum
http://carlos.bueno.org/2012/02/bots-seized-control.html
======
jsackmann
In my experience: Amazon automatically discounts some books, a certain time
after their release. I've published several through their subsidiary
CreateSpace, and the two that sold more than negligible amounts were discount
the same ~28%. One eventually went back to my 'retail' and the other stayed
discounted.

Again in my experience, Amazon's discounts do _not_ effect the author's take.
At least in CreateSpace, the author's royalty is based on the retail price the
author sets.

------
revelation
There are really Markov chain generated books on Amazon? I guess it is
becoming a trash dumpster after all.

~~~
tomjen3
It certainly would be an interesting idea, and while it wouldn't be difficult
to write them, who in their right mind would buy them, much less not demand a
refund?

~~~
olefoo
It's one chain of a money laundering operation.

Multiple books are created at high but not too high prices. Stolen funds are
used to buy them; (through multiple intermediaries, work from home mules being
a favorite) and the profits are moved through multiple accounts as well.

The criminals don't care that they are giving a bunch of money to Amazon (it's
stolen remember), they do want the funds coming out to be clean, untraceable,
and usable.

The unfortunate thing being that Amazon's incentives are, in this case,
aligned with those of the criminals. And while I'm sure that Amazon regularly
helps law enforcement track down this sort of thing, I wouldn't doubt that
there exists a temptation to not notice that sort of misbehaviour.

~~~
Erwin
Sounds like this could be the plot of the next Stross book. In 2020, the
ordinary tax base has almost been destroyed. Everyone channels their illegal
earnings by generating and reselling Kindle books. The main character of the
book is a government bot program designed to analyze books and dig through
BitCoin chains to determine whether the transactions are fraudulent or
genuine. But as all goods have turned to electronic form, are they even any
humans at the end of these transactions? Everything changes when the computer
program has to analyze (some religious/philosophical book).

I wonder if anyone has written a book from the point of view of a computer
program (and not just yet another human-like AI in a strange glowing suit).
Stanislaw Lem's books may be close.

~~~
geoffschmidt
Or the Philip K Dick version. Everything changes when the program has to
analyze... itself.

~~~
brianobush
I believe it is entitled "Vulcan's Hammer"

------
jarek
Similar story from last year: "Amazon’s $23,698,655.93 book about flies"
<http://www.michaeleisen.org/blog/?p=358>
<http://news.ycombinator.com/item?id=2475854>

~~~
hakanensari
Fun, intelligent articles, but both glorify essentially dumb "algorithms" by
garage entrepreneurs that end up generating offers that will never sell.

------
pavel_lishin
I'm not sure how Amazon works; if they discount your book, and I buy it at the
sale price, did you just get shafted out of some money? Or do they make up the
difference?

~~~
femto
Advantage Instructions and Rules - Updated January 29, 2008 [1]

7.2

"You, the vendor, receive 45% of the List Price. You set the List Price, also
known as Suggested Retail Price, of your products, and all payments made to
you are calculated based on the List Price. If Amazon.com decides to further
reduce the sales price to the customer below the List Price, the customer
discount comes out of Amazon.com's percentage."

[1] [https://www.amazon.com/gp/seller-account/mm-product-
page.htm...](https://www.amazon.com/gp/seller-account/mm-product-
page.html?topic=200339300)

~~~
nirvana
Wait, Amazon takes %55 of the list price, and has control over the actual
price its sold at.

Meanwhile, Apple takes %30, and you have total control over pricing.

Yet whenever the iBookstore comes up here, people go on and on about the
"Apple tax" and how Apple is trying to drive authors out of business? By
taking Less?

~~~
Permit
I think my biggest gripe with the App Store is that there is no alternative.
If I want to develop an app for an iPhone I'm locked in to their system.

If I want to publish a book, I have a variety of options, both in the physical
and online realm.

~~~
Terretta
Jobs tried to get you to make HTML5 apps for the iPhone. He even gave you nice
ways to install them with their own icon and run them offline. But nooooooo,
you're having none of it. No HTML5 installable apps with access to native APIs
for you. You prefer to insist there's no alternative...

<http://sixrevisions.com/web-development/html5-iphone-app/>

------
Tichy
Doesn't Amazon ban you for selling non-existent books? Because otherwise it
has occurred to me that next time I look into buying a book, I could pretend
to sell it for a really low price and wait for a bot to underbid me, so that I
can buy it off the bot for very little money.

------
apieceofpi
"trust the tattooed hipster who wrote Amazon's pricing algorithm"

Am I missing some context here? Amazon is full of tattooed hipsters?

~~~
jeffbarr
> Look around.

I see no tattooed hipsters here.

~~~
groby_b
> light torch.

You've been eaten by a grue.

------
damian2000
This live amazon page here shows that the price for a book has been increased
artificially to $7.5 million due to bots ...

[http://www.amazon.com/gp/offer-
listing/0956205100?ie=UTF8...](http://www.amazon.com/gp/offer-
listing/0956205100?ie=UTF8&linkCode=shr&camp=213733&creative=393193&ref_=dp_olp_used&sr=1-10&condition=used)

(I got this via a tweet a few hours ago, and it seems like its still
broken...)

~~~
rplnt
Maybe it's just author trying to recover from personal bankruptcy.

------
wtvanhest
Is it possible to do the following:

Invent a fake book

Post it for a high price

Watch Bots price it up

Buy one from a bot

Sell the only real one far above the bot price

Profit? (because the bot owner must then buy the book to ship it to the person
who already bought it?)

~~~
jerf
If you can make that actually happen, the bot will end up canceling your order
and take the reputation hit. It's all a numbers game to them.

~~~
wtvanhest
I remember reading an article before which stated that the bots are able to
charge a higher price because they have a good reputation. I guess it depends
on how much you want to make. Maybe the bot would pay $1 extra, but not $20
extra?

------
gcb
If it has free shiping, why not buy 1.000 books for $10 and move them back to
your inventory?

~~~
aristus
I'm afraid to. :) they might buy them bulk and I end up with a load of books.
I forgot to mention this is print on demand which makes it even more silly.

~~~
gcb
What kind of scientist don't buy even one?

Buy one at a time and make a stock ;)

