AuctionBytes blogger Bob says Amazon's pressure on booksellers to lower their prices has an unintended consequence: sellers are exaggerating the condition of their books to try and squeeze enough profit out of selling on the site, leading to poor buying and selling experiences.
Revision of an old joke: "Six times I cut my Amazon prices and, still, I make no profit!"
By encouraging energetic micro-competition (meaning competition between numerous small-ish sellers), e-platforms mainly take one aspect into account - consumer prices. These platforms are constantly pushing those prices downward while most sellers witness ever rising costs (fees, supplies, shipping).
With this squeeze it's becoming more and more difficult to maintain a business that supplies a decent income and Amazon is leading this push to the bottom. Take Amazon's book category as an example, as this is pretty much where Amazon's story began.
Search for a book on Amazon. Most likely if it's a book you can think of - it's there (First Edition Gutenberg Bibles don't count). Notice that Amazon's default settings begin with the cheapest price which, not coincidentally, is typically the worst condition (Acceptable). In fact, if a buyer wants a "Very Good" condition book they might have to search through a few pages to find one.
At the same time, Amazon's seller rating system is really, really bad (can I say: sucks?). While 90% might be a fantastic grade for a high school math test, it's a deplorable selling statistic. Most buyers don't seem to recognize this. But as above, if a buyer does want to purchase from a seller with a decent rating, a person they can trust with writing accurate descriptions, they might have to search through a few pages to find them.
Searching pages and pages of listings to find a quality-condition book being sold by a high-rated seller can be a tedious chore for buyers. And this is where the problem blossoms.
Now, when you list a book on Amazon and when you get to the place to set your price, Amazon not only points out your lowest priced competitor (regardless of condition or rating), but they implore you to match that price! Worse, later on they'll send you messages about how you should drop your price by 30% to match the price offered by someone with an 85% feedback score (true story) who probably stores their books in a musty, bug-ridden basement.
All this while the big guys try to drive smaller sellers out of business by taking full advantage of their lower fees and bulk shipping discounts while paying minimum-wage employees to robotically list their books - thereby undercutting already low prices.
These issues lead to big problems for small sellers trying to pay bills.
Smaller sellers can't really compensate by lowering their costs. They can check out other venues for lower fees but there are only a few options - and each one has their own problems. They can't reduce their shipping costs (the post office, Fed Ex and UPS don't negotiate with the little guy). Many are already using unpadded Manilla envelopes to ship. They can't work more hours because they already suffer from sleep deprivation. And, really, how much cheaper can yard sale books be sold for? ("Sorry, a buck is just too high. I'll give you 87 cents for it").
So, what do sellers do? Well, many of them lie. They call their "Acceptable" or "Good" grade books "Very Good" (but with a low price) hoping their buyers won't note the difference. This is most obvious with the abundance of "Ex Library" books listed as "Very Good" or even "Like New" when, clearly, Amazon's own condition guideline insists that an ex-library book's best grade can only be "Good" (to be VERY good, a book must be unmarked and undamaged). How difficult would it be for Amazon to search their own listing for mis-graded Ex-library books?
Of course, this is one reason why finding an Amazon seller with a rating above the mid-90s is becoming increasingly difficult. Long term, this is simply bad for the entire business. It drives good, honest sellers (I'd even claim the best sellers) out of business, hands a near monopoly to the biggest and less reputable sellers and discourages buyers who are expecting a Very Good book while getting one with ink stamps, library-pockets and fingerprint stains.
I can't understand why this way of doing business is preferable to focusing on quality products and excellent customer service - and the higher prices needed to encourage both. Higher prices mean higher commissions for the platform and less work for the seller (it takes about as much time to list a hundred-dollar book as it does to list a penny book). And while some people will place the blame for all this on greedy sellers or apathetic buyers (or Russia, or China), this is clearly the model that Amazon has built its business around.
About the Columnist
Bob has been buying and selling online for almost 20 years. Some experts claim that his limited budget was the major cause of the 2001 dot-com crash. He denies the charge.