Why won't Amazon help you compare prices?

Amazon could tell you the lowest price for anything you want to buy on the Web, but it doesn't.


Mark Gimein
August 5, 1999 8:00PM (UTC)

One year ago, amid a typhoon of publicity, Amazon.com announced that it would buy a comparison-shopping service. With Junglee, customers would use Amazon's site to find the best prices for anything they wanted to buy on the Web.

Now, however, the price-comparison service, Shop the Web, sits forlornly in a corner of the Amazon.com site. Last month Junglee's founder, Rakesh Mathur, left the company. The service seems to barely work. And it's all too bad, because an Amazon.com shopping bot was an awfully good idea.

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On Wednesday afternoon I went shopping for a video camera (well, window shopping, actually) on Amazon.com. I settled on a Sony Hi-8 model with lots of neat features. The price quoted in Amazon's "Electronics" area was $799.94. Then I tried Amazon's shopping bot to see if anyone else was selling it for a lot less.

Shop the Web was hard to find, with its text link buried at the bottom of Amazon's front page. Strike one. Once I found it, there was no indication that Shop the Web could be used as a tool for comparing prices. In fact, Amazon spokesman Paul Capelli says it is "simply a tool to help people find and discover things they want on the Web."

Still, I typed in "ccdtrv66" -- the Sony model number. Shop the Web reported that another online store did stock the same model, for $799.00. A savings of 94 cents. Not enough to make me switch to a store I'd never heard of. Amazingly, the shopping bot didn't even tell me that the camera was available on Amazon itself! Strike two.

I decided to check Shop the Web's results with a competing shopping bot, to get a broader selection of merchants. Bottom Dollar returned a price of $749.95 from Shopping.com -- and $649.99 from the Camera Club. I suspect the $649 might have been a pricing mistake, but in any case, even the $749 price is substantially lower than Amazon's price. Strike three. (Full disclosure: Salon.com has a business relationship with Amazon's competitor, barnesandnoble.com.)

Actually, it's even worse. I fudged the results in Amazon's favor by testing Shop the Web using a product that it recognized. Trying to find toys on Shop the Web proved to be a useless exercise; it was unable to find Power Ranger action figures or Lego sets taken straight from Amazon's own catalog. And books? You guessed it. There's no book category.

In short, Amazon seems to have given up on comparison shopping, lending support to the carping of observers who were immediately skeptical of the idea that a Web megastore could provide unbiased price comparison. It's too bad Amazon didn't take the trouble to prove them wrong.

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From the start, Amazon has tried to position itself as an honest broker of information. Publishers raised their eyebrows when Amazon let customers publish negative reviews on its site. Isn't it Amazon's job to sell books? Yes, but it's not that simple. Customers who read a negative review of one book might buy another instead. And even if they don't, and Amazon loses a purchase, the e-retailer is likely to have another shot at winning that customer's business.

It's in Amazon's interest to get customers to think of its site as the starting point for all their Web purchases. That's where price comparison comes in. Let's say that a price-comparison section, featuring both products that Amazon sells (like toys) and ones it doesn't (like computers), is prominently featured on Amazon's site. What happens then?

Customers who use the shopping bot to find a product can get one of four results. The first is that Amazon doesn't sell it. That's fine -- Amazon has done the customer a favor, and she'll be back. The second is that Amazon does sell it, and offers the best price. That's even better. In that case she'll be happy to buy it.

The third possibility -- and I would argue that this will turn out to be the most common -- is that Amazon sells a product for a competitive but not rock-bottom price. (It can get -- and pass on -- good prices since the biggest merchants, such as Amazon, are the ones that get the biggest economies of scale and the best prices from manufacturers.) If it is off by a couple of bucks, many of its customers, I suspect, won't bother to go elsewhere.

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The final possibility, of course, is that the customer finds a much better price somewhere else. But if Amazon pointed her to the good deal, it's likely that she'll be back to check out prices at Amazon again.

I don't know if these were the scenarios that Amazon.com CEO Jeff Bezos envisioned when he shelled out 1.6 million shares to buy the shopping agent technology. I imagine they were -- but it also appears that this is a route that Amazon has abandoned. If so, then Amazon should just dump the comparison shopping feature -- there's no point in offering a second-rate service and hiding it to boot. If it hasn't abandoned comparison shopping, then it shouldn't. Done right, it's still as good an idea as ever.


Mark Gimein

Mark Gimein is a staff writer for Salon Technology.

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