Amazon started as online book store and has grown to be the worlds largest online retailer.
BBC Radio 4 You & Yours: Amazon price parity
Hosted today by Louise Minchin (better known as a BBC 1 Breakfast presenter), the program looked at whether price parity means you should shop around for the best deal or if you can still get a great price on Amazon. One retailer, Sam Hamilton who runs Zooron and MadJungle said yes you can buy cheaper from his website than on Amazon.
I’m not so sure that’s always the case but I gave the example of the Leith Tea Company who have a discount if you buy direct (as well as a loyalty scheme which you just can’t set up on Amazon). I also discussed how a retailer can set up bundled discounts on their website which you also can’t do on Amazon as consumers may be buying products from multiple retailers, plus of course if you have a specialist website you can tailor it to your market vertical.
Nice one Chris.
For Sam it was 15 % for us it’s 25% comission in Jewellery.
I’m sure there was another country that was investigating Amazon over the “Price Parity”. Would be interesting to know if they have dropped it in ALL countries.
German authorities were investigating too. Amazon Price parity was dropped across the whole of the EU, but still exists in the US.
Hi Chris, I listened to the programme live & was hoping that you would post something on the site about it….Can you give a bit more info about the prep work that ths BBC does with interviewees in this situation.. ie. are your comments/ soundbites rehearsed with them – and to what extent are you thrown in at the deep-end ?
In terms of the whole price parity issue- the reality is that Amazon have spent the last 5 years pushing prime (next day delivery) and Lockers to buyers; and pushing sellers into using FBA…. Essentialy, Amazon no longer have to worry about items being potentially cheaper on other websites – as they have effectively locked buyers into Amazon via the lockers & Prime… As well as locking sellers into Amazon with FBA…. (I have seen so many dvd sellers who have succumbed to FBA in the last few years- and I can’t see them going back to running their own websites as they did before)
Hi Mukesh, the way it works is quite interesting, and was somewhat different for Sam and me.
Sam’s comments were pre-recorded, so I have no idea if they were cherry picked, if that was the entirety of what he said, or if there were any retakes to get the comments perfect (and cut out any “errmms” and coughs!!)
I was sat alone in a dull room in the BBC Oxford Studio with a mike and headset talking to Louise who would probably have been in Manchester. Whilst the Beeb did let me know the content of the program I hadn’t heard Sam’s comments and although I had a rough idea of the type of questions these things can obviously take unexpected turns so you need to be mentally prepared.
My take on it is I suspect the BBC would rather I’d been harder on Amazon and said “Great, no price parity, shop around as Amazon’s not the cheapest”, but in reality they often are so I was happy to merrily say Amazon probably is a great place to buy most of the time.
If it had been a pre-record there’s always the danger of a single comment being broadcast which on it’s own doesn’t reflect a balanced view and that’s why I very much prefer live broadcast to pre-record if possible. (Although to be fair to the BBC they’re pretty unbiased and fair, but other news media we’ve supplied comments to in the past to aren’t quite so balanced!)
The other thing you have to bear in mind with live broadcast is you never quite know how long you’ve got and if breaking news will cut you off, so every comment has to get your point across and be a point at which you’d be relatively happy if the interview was terminated….
They were lightly edited to cut out the “Sorry what did you say? the Internet in China just cut out, can you say that again?” and also to remove Kevin’s voice (the assistant producer) who on the other end of the line as the pre-record happened on Monday. I got a call over Skype from BBC HQ who then bounced me into the studio where they were waiting to record. The whole process took 5 mins, no retakes and the one thing I am glad they did cut out was when Kevin started unexpectedly by asking me what I had for breakfast to get the sound levels right and that got a “errr… what?!? marmite… martime on toast” seeing as it was 9.30pm local time and the last thing on my mind and not quite how you expect the whole thing to start.
The only think I think we both forgot to mention to the general pubic is that Amazon take commission each and every time you sell and as Chris rightly said websites need to pay Google etc to generate traffic but where the independent website should be winning is that once they acquire the customer they can then market back to them for next to no cost using tactics like email marketing, promos or fliers in the parcels to trying to get the customer to repeat which would then increase your margin and reduce your costs pushing down the price.
Good to hear Tamebay getting some exposure.
And yes Chris I suspect the BBC did want you to give Amazon a bit of going over but you were quite balanced and measured as ever.
If memory serves you also made the key point that so many forget in that your Amazon fees include serious marketing/transaction costs that still have to be paid for when running your own website (e.g. PPC etc) so it is not automatically that much cheaper (certain categories excepted like Jewellery etc) off Amazon.
No mention of Flubit and their supposed business model which was a pity when looking at ‘price parity’ and ‘price discount’ issues.
I did suggest the show covered Flubit, but they said they’d covered them in an earlier program and to be honest there wasn’t time for me to squeeze them in without missing something more important out… if I’d had a little longer there’s tons more I’d have said like payment processing fees etc
I’d have also made the point that large retailers spend tons to drive traffic, but I know a lot of Tamebay readers are predominantly marketplace traders, have a website as a tick in the box and because they spend nothing on marketing can indeed offer much bigger discounts then those spending out on PPC etc. Also would have been interesting to discuss how to find small retailers on the likes of Google shopping etc…