amazon + ??? = changing prices

I came across an excellent deal on SlickDeals yesterday – Sennheiser HD555 headphones for $69 on Amazon.  I took a look at comments and reviews and debated for about an hour before deciding to buy them.  When I added them to my cart, the price had changed to something like $120 (list is around $150 I think).  I was shocked, but I remembered a comment on SlickDeals saying that prices can fluctuate hourly.

Hourly?  Really?  I decided to check the page every few minutes over a period of a couple of hours.  The price dropped from ~120 to ~85 quickly, then rose to ~92 but with a free amplifier.  Then the price dropped to ~85 again.  One of the things I noticed is that sometimes it would say that it’s really another company selling for Amazon.  Even when it was just pure Amazon the price would fluctuate though.

If I had to guess a reason, I’d guess that they’d be using adaptive methods to choose vendors and set prices for themselves.  As a vendor, you can probably see when demand increases for an item and raise the price a little to make the best of it.  Normally I can imagine adaptive methods being bad in the general market, but with Amazon it probably gives informed people a pressure to buy.

I brought it up because it’s surprising and interesting.  It seems like most businesses focus on converting their brick-and-mortar ideas to a digital world.  Here Amazon is doing something that you can only (successfully) do in the modern world.  Also note that this differs from setting prices based on browser/OS, which is a lot like my impression of car salesmen.

Also, while looking into it I realized there are many excellent Amazon price trackers out there.  Although they only seem to check Amazon every few hours or so, they can send you alerts or give a custom RSS feed of deals.  For example, camelcamelcamel provides graphs of price changes over time, though you can see it missed the hourly fluctuations from yesterday.

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