Amazon Pricing Drives Me Bot-ty

by on July 28, 2014

Algorithms in Action

Steven Colbert is mad at Amazon. And so am I.

My gripe has nothing to do with Amazon seeking to recover 50% of e-book sales rather than 30% from Hachette, the nation’s fourth largest publisher. That struggle has already gotten national attention.

My battle is with the bots and algorithms Amazon uses to price its books. I can’t reason with them, because they are not human. Yes, it’s true. We have a book industry whose dominant market decides prices based entirely on a computer formula.

Algorithms vs. People

An “algorithm” is “a step-by-step procedure for solving a problem or accomplishing some end especially by a computer.” Amazon relies on algorithms to set prices for its books. Buzz Stone highlighted Amazon’s shift from human decision making to algorithms in his book on Amazon founder Jeff Bezos. Amazon employees who took pride in the ability of their personal judgment to guide readers were unhappy that their judgment was being replaced by computers.

Although I have published four books with the University of California Press, I only learned about the menace of algorithms when my revised and updated The Activist’s Handbook: Winning Social Change in the 21st Century was released last August.

Since the book retailed for $29.95, I assumed that, as with my prior books, Amazon would be selling it for 30% less, or roughly $20. UC Press sells over half its books via Amazon, and it’s Amazon that gets less profit from the discounted price.

But Amazon only discounted the book by 11%, meaning it sold for $26.69. And with other online companies like Powells.com matching Amazon’s price, my new book was not available anywhere for the 30% discounted price.

When I asked my publisher why Amazon was selling my book for nearly double the price of other books on activism (and over three times the $8.44 price of Alinsky’s Rules for Radicals) I learned about the “bots.” Bots are computer-generated web site monitors that Amazon uses to price books. Bots are part of the algorithm process. Bots decided that my book would sell just fine at a much higher price than competitors.

Well, it didn’t. But the algorithms eventually noticed this and reduced the book price in early November 2013 to just over $22. This nearly $5 price drop raised the book’s Amazon ranking from 820,000 to 20,000 almost overnight.

Having found a price point that attracted buyers, one would think that Amazon would keep the larger discount. But the bots decided otherwise. Within a month my book was back at $26.69, and then was kept at that price or even over $27 for most of 2014.

Sales suffered but the bots and algorithms didn’t care. And in a book culture where people now feel foolish paying full price, a mere 11% discount was almost an affront to potential buyers.

UC Press was powerless to change Amazon pricing. Hachette Book Group can go public with complaints against Amazon because it is a large corporation with Malcolm Gladwell and other media influential authors; UC Press and most other publishers cannot risk such a public fight.

Last week, I saw that for the first time since The Activist’s Handbook, 2nd ed.’s release, Amazon was selling it for the 30% discount of $20.41. Now’s the time to buy it! Because if the bots and algorithms have their way it will soon be back to $27, for reasons only non-human elements understand.

Randy Shaw is Editor of Beyond Chron.

Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw is the author of four books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. His new book is The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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