Boxes filled with merchandise sit stacked before shipment at the Amazon.com Inc. distribution center in Phoenix, Arizona, U.S.
Amazon is expanding its reach into many businesses, but it may not be in the business of finding the best price for customers.
The e-commerce giant has been accused of favoring its own products and those of its paying sellers over the cheapest options, ProPublica reported Tuesday.
Over several weeks, ProPublica journalists looked at 250 frequently purchased products on Amazon and studied how the items were ranked in search. About 75 percent of the time, Amazon’s own products and those of retailers who pay for Amazon’s services ranked in the top suggested spots despite there being cheaper options.
For all 250 products analyzed, the average price difference between the top recommendation and cheapest option was $7.88.
In a comment, an Amazon spokesperson pushed back against ProPublica’s claim.
“With Prime and Free Shipping (which requires no membership and ships orders above $49 for free), the vast majority of our items ordered 9 out of 10 can ship for free,” the spokesperson wrote in an email. “The sorting algorithms the article refers to are designed for that 90% of items ordered, where shipping costs do not apply.”
It appears that Amazon is embracing the pay-to-play model, not unlike Facebook where publishers have seen organic reach drastically decline amid favoritism for posts by friends and promoted by advertisers, brands and publishers.
That isn’t surprising, given that Amazon’s in the business of making money, but it is arguably deceptive. Indeed, customers have the option to comparison shop by “price + shipping,” but shipping costs are omitted from its own products and those of paying vendors.
Amazon declined to comment on the deception but did tell ProPublica that its algorithm favors more than prices.
Customers trust Amazon to have great prices, but thats not all vast selection, world-class customer service and fast, free delivery are critically important, an Amazon spokesperson wrote in an email to ProPublica.
But for those vendors that cannot to afford or will not pay for Amazon services, some are finding the competition “insurmountable,” BareBones WorkWear chief operator officer told ProPublica, and abandoning the platform.
Retailers aren’t abandoning e-commerce or third-party networks, however. Beauty Bridge, a cosmetics company based in Nutlet, New Jersey, told ProPublica, that they hoped Wal-Mart would make a play for smaller online retailers, especially given its recent acquisition of Jet.com.