Amazon’s customers are being convinced that the service has the best prices, while many other people buy for cheaper on almost any other service. Even the retailers’ websites often offer cheaper prices than the “best buying and selling service online”.
According to the results of a Sunday Times investigation, some independent sellers on Amazon state high prices for their products, saying their buyers it’s a super discount. In fact, many other online shopping services offer the same products for much cheaper. Some items have lower price tags even at the original retailers’ online shops, which is the most surprising thing.
The analysis done by the Sunday Times specialist followed a special warning by the Competition and Markets Authority that was spread before Christmas. It said that many online retailers tend to put higher price tags on their products before Black Friday that is advertised by many online shops, including Amazon.
Black Friday — the feverish sales day imported from the US which this year falls on November 25 — has proved a boon for internet sales and Amazon has been described as the first place to snap up “killer deals”. Those deals might not always be the cheapest, however.
Last week a pair of Ruark wireless speakers was being sold by 16 retailers on Amazon for £299 — the cheapest price available at the online store. However, the speakers could be bought for £20 less at an independent online store.
An Audio-Technica LP60 USB record turntable was offered by three retailers at £129 on Amazon on Thursday, the lowest price on the website among 11 sellers. It looked the best price, but the turntable could be bought for £99.99 at John Lewis.
One of the retailers, Nottingham HiFi Centre, which was selling the turntable on Amazon for £129, was offering the same product on its own website for £99.
Another retailer also offering the product for £129 on Amazon was selling it on its own website for £119.
Entering into agreements that limit price competition cheats consumers [and] is illegal
The CMA last week highlighted concerns that some online retailers might be withholding the best available deals from shoppers, and has written to a number of retailers reminding them of their obligations under competition laws.
There is no evidence that the retailers The Sunday Times looked at are acting unlawfully or that Amazon has been involved in any unlawful or unfair practice.
However, the CMA warned that any retailers found to be discussing or agreeing such price levels with competitors on Amazon or elsewhere would be breaking the law and would face severe penalties.
The watchdog has already fined one retailer £163,371 after it agreed a pricing pact with a competitor for sales on Amazon.
Independent retailers can use the Amazon Marketplace, which lists their items on the main site, alongside Amazon’s own items.
Among the products being sold this way last week was a Marantz Blu-Ray player, which was being offered at £429 — the lowest price — by three retailers on Amazon but was available for £399 from the online store HiFi Confidential.
Meanwhile, a Roberts Classic Blutune radio offered on Amazon by four different retailers for £89.94 last week was available for £67 from an independent online store.
A cream Smeg classic stand mixer offered on Amazon for £299 by three retailers was also cheaper elsewhere, with Appliance World offering it for £279.
One seller has claimed in an Amazon online forum that there are “unspoken” agreements between some rivals not to undercut prices, but there are always “one or two nitwits” who turn up on the Amazon Marketplace with cheaper prices “ruining it for everybody”. Price matching would only be unlawful if there was an agreement between retailers on a pricing strategy to try and jointly boost profits.
The independent sellers say they are simply matching the best prices in a lawful and highly competitive market, including those of Amazon, but the CMA wants to ensure that no retailers are agreeing pricing strategies with competitors to keep prices artificially high.
Stephen Blake, senior director of the authority’s cartels and criminal group, said last week: “Entering into agreements that limit price competition cheats consumers, is illegal and can have serious consequences for the companies and individuals involved.”
Dan Abrams, managing director at Eddy’s (Nottingham), trading as Nottingham HiFi Centre and Superfi, said Amazon was a highly competitive marketplace and there were no agreements between competitors in his sector on pricing.
However, he said, retailers might choose to match rather than undercut the lowest prices on Amazon.
He added that sometimes products might be sold more cheaply on a retailer’s own site rather than Amazon — which took a referral fee of between 7% and 12% of the sales price of most electronic products — and consumers needed to shop around.
“I am an Amazon customer myself and I love it. I get products at a good price and I don’t often shop around, but I never pretend to myself it’s the cheapest place,” he said.
“My advice to a consumer shopping for a product is to type it into Google and see what comes up.”
Richard McKinney, sales director of Ruark Audio, said the company suggested a price to its retailers, but they could choose to discount the product.
The CMA said it could not comment on specific cases of pricing but that it would assess all the material gathered by The Sunday Times.
Amazon said all sellers must “follow our selling guidelines and those who don’t will be subject to action including potential removal of their account”.