Most people are aware that prices change. However, I wonder if people are aware how often they change or even how to combat it and still get the best deal.
Nearly every online vendor uses a variation of dynamic pricing. Those vendors that supply the platform for 3rd party vendors like Amazon, Ebay, Walmart, among many others are even more subject to dynamic pricing. Mostly this is penny-ante stuff but it does add up at the end of the month. and sometimes it can be substantial.
Dynamic pricing, charging what the market will bear, price gouging, or what ever you label it, has been in the news lately. A high profile event that has even got the attention of congress is the reselling of concert tickets at very high markup. Sometimes going for thousands of dollars.- Robert Jennings
What’s dynamic pricing? An operations management scholar explains
by Owunc Yilmaz, the Conversation
Whether you’re booking a plane ticket at the last minute, hoping to snag seats for a popular concert or looking to go to a lackluster preseason football game, you might encounter what’s known as dynamic pricing.
Using this strategy, companies adjust what they are charging in response to demand. They can cut or raise the prices as high as the market will bear in real time to maximize the money they make through sales.
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Dynamic Pricing, Explained: Why Prices Are Changing More Often
We just went through a pandemic and are still feeling the effects as serious supply issues have greatly affected prices. And of course, most of inflation is caused by dynamic pricing. Most economists call it the supply and demand curve and swear it is the natural order of things. But is it really? Well, it depends.
Dynamic pricing is merely another name for charging as much as others will pay. And sometimes that is just pure price gouging. Should it be illegal? Well, sometimes it is. During natural disasters price gouging is strictly illegal but sometimes enforcement is lackadaisical. But it does it limit the most egregious.
The Ethics of Price Gouging
Just because you can, doesn't make it right. I myself have been involved in dynamic pricing for many years as a long-time Amazon 3rd party seller. We use it to average prices as prices on the platform change literally every second. Amazon themselves have implemented an algorithm to help sellers moderate their prices by setting a lower and upper price for their products. But it still depends on the seller themselves.
However Amazon has started removing a seller's listing if prices are too far out of what is reasonable. However it is an imperfect practice and I have found that they want me to sell below cost because someone else was able to sell at an unreasonable low price. I myself restrain my prices from being outrageous but try instead to maintain a constant reasonable return.
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But this idea doesn't hold for many, as it has been estimated that somewhere around 50% of price increases fueling our current inflation were not warranted by wholesale prices and other costs. So is that price gouging? It's hard to tell so the best practice is for us is to protect ourselves.
Maintaining good customer relations, on the part of corporations, is becoming a thing of the past. Big companies in a monopoly or oligopoly situation, as we are in with most industries today, have found that it's cheaper to lose customers than provide adequate customer service. When consumers have little choice, many corporations just don't care about their customers.
This paper from the Business Ethics Quarterly, on The Ethics of Price Gouging, discusses the ethics of price gouging in depth. - Robert Jennings
How To Mostly Get The Best Price
There are many ways to skin this cat that I haven't thought of or seen. My apologizes to my fellow cat lovers. It's just a saying. Not sure why anyone would want to skin a cat anyway.
1. Pay attention. Don't just one-click it. Oftentimes, the best deal is hiding in plain sight. Platforms who earn a percentage of the sale have the incentive to hide lower prices to maximize profits. Take your time.
2. Consolidate your orders to get free shipping. Most websites have a minimum order for free shipping.
3. Separate your orders to get coupon savings. Sometimes coupon savings are not available on multiple items just the first one.
4. Some websites like Amazon, Walmart, and Instacart have their own credit cards that typically give 5% back on every purchase on their site.
5. Check multiple websites for the best price. That includes 3rd party seller's own websites. The fees for selling on most platforms like Ebay, Amazon, Walmart etc. can be substantial.
6. Use shopping tools like browser extensions that find the best price. There are a bunch of them out there. Some search engines have a shopping mode.
7. Don't be in a hurry to buy. Prices change all the time. A number of apps will notify you of price changes. I particularly like The Camelizer. It is a browser extension that shows you the price history on Amazon. I use it in the Brave browser.
About the Author
Robert Jennings is co-publisher of InnerSelf.com with his wife Marie T Russell. InnerSelf is dedicated to sharing information that allows people to make educated and insightful choices in their personal life, for the good of the commons, and for the well-being of the planet. InnerSelf Magazine is in its 30+year of publication in either print (1984-1995) or online as InnerSelf.com. Please support our work.
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