How Amazon uses psychology to trick you

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When shopping for something online, most people’s go-to store is Amazon. The perception is that Amazon, without fail, offers the products you want cheaper than anywhere else. In actuality that’s not entirely true, but Amazon has very cleverly tweaked its product pricing to make online shoppers think it is.

So how does the e-tailer trick you into thinking it’s the cheapest option for everything? By focusing on really popular products and discounting them significantly. That’s the finding of Boomerang Commerce, which did a study on the Price Perception Index and in particular how Amazon goes about pricing the goods it sells so you perceive it to be cheapest.

It works as follows: Amazon identifies the most popular items it sells and applies large discounts to those products, to the point where they are cheaper than the competition. Lots of people want these products, end up at Amazon because they are cheapest, and then walk away thinking Amazon is awesome because they got the best deal. (And they might have.) The more that happens, the more you think Amazon is the best place to go, and maybe you just start going to Amazon first and buying with confidence that you’re getting the best deal, without confirming that was the case.



Of course, that’s not always the case. Amazon can actually be much more expensive for particular unpopular or add-on products. The example Boomerang gives is HDMI cables and routers. The TV you purchase may be the cheapest at Amazon, but the HDMI cable you also placed in your cart can be over 30% more expensive than elsewhere. The most popular router may be the cheapest on Amazon, but the second or third most popular? Nope.

So, next time it comes time for you to purchase something online and Amazon turns out to be cheapest, why not try looking at a less popular alternative/brand and seeing how the prices compare. Chances are that super cheap Amazon pricing may be beaten if you don’t mind purchasing a product that isn’t a top seller.

[augustus hanesworth]

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