Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Mar 4 2014 22:59:00

Sellers Take Offense at Amazon FBA Pricing Lawsuit

By: Ina Steiner

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Emails are coming in about the Amazon FBA pricing lawsuit in "Shopper Sues Amazon over Merchant Pricing - Here's Why." According to the lawsuit, "Dr. Ekin and other Prime Program Members were harmed and deceived by Amazon's activity because they paid the $79 annual Prime Program membership fee solely for the benefit of free shipping. However, the prices of FBA items offered to them as Prime Program Members were routinely inflated to include shipping charges."

As the article explained, if a non-FBA seller lists a book for $10 with $3.99 shipping, an FBA seller may choose list the same title for $13.99 since shoppers won't have to pay for shipping on that seller's item since FBA items are Prime-eligible.

One reader used eBay as an example in explaining why she thought the lawsuit was unfounded. "It has always been since the beginning on eBay that sellers offering free shipping would incorporate shipping into the pricing. How can sellers lose money? One of the main reasons for free shipping was to make calculations easy for the buyer but never for the seller to lose money. Sellers must make a profit to stay in business. How can someone sue over how a seller prices an item. This is ridiculous."

Another reader was unsympathetic to the shopper suing Amazon. "Ina, I spend about $4,000 a year on Amazon. I do due diligence on all my purchasing. Say I am going to buy a NEST Thermostat, I first go to Amazon to see what their price is. Then I go to Nest to see what their price is. If Nest is the same as Amazon with free shipping, I will buy direct from Nest as an example. Support for the manufacturer is important so they stay in business.  I am 73 years old but very computer literate."

He said he wondered if the buyers discussed in the article also do due diligence shopping. "I feel I have never been stiffed by Amazon. In addition, I now see that Amazon often shows Merchant items before the vertical listing of items with Prime at the top of the list. You have to learn how to Dig for the best price and free shipping and look at the manufacturers prices to determine if the Amazon price is the best."

"Caveat emptor," he ended his letter.

Some sellers feel that if anything, Amazon encourages them to lower their prices rather than raise them. What do you think of this lawsuit, and what would you tell this shopper?




Comments (21) | Leave Comment | Permalink

Readers Comments

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: NullApps This user has validated their user name.
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Wed Mar 5 00:24:06 2014

If you don't pay for prime and want fast shipping you pay extra.  The seller or Amazon doesn't drop their price for you.  That fact alone makes this lawsuit frivolous.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

This user has validated their user name. by: Philip Cohen
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Wed Mar 5 01:00:55 2014

So, if there is effectively no such thing as free shipping, even on Amazon, what purpose does Amazon's Prime Program serve? What do buyers get for their $79? Is this just another deception, like one has come to expect from eBay?

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Ebay's Slow Death This user has validated their user name.

Wed Mar 5 02:53:16 2014

I think the point of Prime on Amazon is not so much the free shipping, but the fast shipping.

I order office supplies from Amazon, and get the free shipping when I spend at least $35. However, lately, it has been taking about a month to get my items. I guess my order goes to the back of the line, and when there are no more Prime orders to do, then they get around to mine.

Which is OK. I just order way ahead before needing something.

There is no such thing as Free Shipping! When are Buyers going to realize that? As has been mentioned before, if you go down to the Post Office and ask about their Free Shipping, they just laugh at you. Someone is going to pay for it, and Sellers can't afford to lose money.  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

This user has validated their user name. by: Ming the Merciless

Wed Mar 5 04:51:25 2014

If plaintiff wins case watch "free shipping" go bye-bye.

As has been pointed out here numerous times, it's "shipping included" not "free" shipping which simply doesn't exist.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Mr. Me This user has validated their user name.

Wed Mar 5 13:15:11 2014

There  is no such thing as "Free shipping" it is built into price of item, so unless seller wishes to lose money, price has to be raised to accommodate. and FBA can be costly to sellers.... cost to shop to amazon, storage fee, fulfillment fees, only makes sense for selling multiple small items
Amazon is the culprit here, pocketing the $79 membership . Hope the buyer wins the lawsuit and court determines the term "free shipping" to be illegal!

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: LAbay This user has validated their user name.

Wed Mar 5 13:19:48 2014

If Amazon sells Prime with a product price guarantee, then the lawsuit has precedence. It all depends on the fine print.

I rarely buy on Amazon because the prices are usually better elsewhere. Everyone pays for free returns.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

This user has validated their user name. by: Tula

Thu Mar 6 01:12:12 2014

Tomato, tomahto. Free shipping is just the term used to mean shipping is included in the price. Anyone with half a brain knows this. It's been the accepted term here in the US, at least, for no having a separate shipping charge, regardless of whether or not it should be or whether or not it misrepresents the situation. Most people are smart enough to do the math and compare prices with and without shipping charges.

Like others have said, Prime is about fast shipping, not free shipping. Those who don't run businesses seem to think that a business actually making a profit is somehow evil and immoral. I'd ask them if they would turn down a raise from their employers. Businesses are no different. They're in business to make money, just like the employee who works for an employer.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Postthoughts This user has validated their user name.

Thu Mar 6 03:19:54 2014

My Kindle came with a free trial membership to Amazon Prime.  I have no intentions of renewing it when the trial period is up for the very same reason he filed his lawsuit.  

I understand why he feels cheated since he paid an extra $79 a year and isn't getting what was promised. He is still paying the same price as everyone else that pays for shipping.  Now add in the $79 for Prime and he is now paying more for those items than those that paid for shipping.  I call that being ripped-off.

Amazon is very misleading in  marketing the Prime membership and the free shipping benefit when really, the only benefit is,  possibly getting it 1 day sooner. I haven't seen anything that states Prime eligible items will cost more.   I think he has a valid point and Amazon needs to change the wording.  In it's current form, people are getting cheated.



Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: MADandCracked This user has validated their user name.

Thu Mar 6 05:21:05 2014

IF Amazon Prime only included fast and free shipping, it would not be worth the money. However, there are other perks to being a Prime member. Instant video for example is included with the membership. For streaming alone, Netflix charges $7.99 a month. So you're actually paying less for streaming plus you get fast ands free shipping. How is that a rip-off?

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: charcorvet This user has validated their user name.

Thu Mar 6 07:00:00 2014

The semantics of "free shipping" or "shipping included" have nothing to do with this. This is one sleezy lawyer and his client trying to force free shipping down the throat of 3P sellers (3rd party for the acronym-challenged folks who haven't had coffee yet)

I send an item into Amazon's warehouse to participate in the FBA program. It's NOT FREE to ship it in to the warehouse. It costs me money. So that item has to go up in price from the things I sell myself that I ship out of here and that the buyer pays the shipping on.

This nimrod is trying to extend the concept of "free shipping" to cover my items which AMAZON does not own and only warehouses for me.

He should simply avoid buying from 3P sellers on his Prime account. Use the options for the free services and Amazon-owned merchandise. And stop trying to force the rest of us to give them something for nothing.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: ewegolf This user has validated their user name.

Thu Mar 6 07:24:15 2014

"Free shipping is just the term used to mean shipping is included in the price." But a term that has been marketed and used to deceive as it has a much larger barbed hook than "shipping included."

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Moonwishes This user has validated their user name.
Web Site

Thu Mar 6 08:48:05 2014

This whole thing is silly. Was the buyer blind when deciding which item to buy from the list? I don't have a Prime account (which does cover many other things than just shipping). The price for each item is clearly shown on the listings page for each item Amazon sells. As they have always done, they list things from cheapest to most expensive and show what the shipping is if you don't buy at least $35 worth of goods when buying from Amazon or FBA. Nowhere does it indicate the cost if you use your Prime account as the only thing that changes is no shipping cost tacked on. So if the price of the first book on the list is $18.07 with $3.99 shipping and is being sold via FBA, the next is $18.08 + $3.99 by a regular 3P seller and then $18.10 + $3.99 when sold by Amazon. Where are they being deceived? They see all the prices, none of them are hiding, and I can't see that any seller has jacked up a price to compensate for the so called 'free' shipping. I trust the judge/jury in this suit, clicks open a few Amazon product pages to see that this is all a tempest in a teapot. It isn't Amazon's fault if they can't determine for themselves which is the cheapest price, the best feedback seller, and the best product listed. All three things that help you to make a determination of which item to buy. They are in sad shape if all they go by when purchasing an item on amazon is the price alone. Amazon isn't willy-nilly telling them which on to buy. If they got 'cheated' it was them cheating themselves.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: FREDDY This user has validated their user name.

Thu Mar 6 10:13:09 2014

Hope the lawsuit gets thrown out.
What you get for Amazon Prime is shipping included and 2 day shipping. That 2 days depends on holidays, weekends etc. They also do not count the day the order was placed.
Someone else charging less plus shipping may be the same and in some cases even less. DO YOUR HOMEWORK.
The only advantage of prime is the 2 day shipping. Which I read is going up $30.00?????
For most of my items ( Not FBA), I usually ship same day via priority mail. So probably the buyers who buy on the same day, receive both on the same day...
Prime is basically, for those that want it NOW, TODAY, THIS MINUTE.

Do students still receive free Prime ????  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Mr. Me This user has validated their user name.

Thu Mar 6 12:05:32 2014

So Amazon duped the poor sap into thinking that a mere $79 would induct him into an exclusive club where he would receive all kinds of perks such as "free" shipping , maybe even free foot massages and complimentary mimosas? well I hope that he wins the case and that the term "free shipping" is banned forever...... nothing is free (except the doggie-doo on his front lawn) it is all paid for by somebody!  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: jb5710 This user has validated their user name.

Thu Mar 6 12:07:41 2014

The whole thing is ridiculous - they are basing the whole Prime membership on free shipping only and that is only one of the things that Prime provides in many cases - and I'm saying many because in ordering from Amazon there are times when a person pays for shipping it depends on the circumstance and what a person is ordering.  One of the biggest reasons I'm a Prime member is to be able to watch free tv shows and movies it's fantastic to be able to watch many of the tv shows I've never been able to see and keep up with the new ones. Right Now I am watching the 1976 season of Upstairs/Downstairs.  I have ordered so many things from Amazon from paperback books up to items in the hundreds of dollars. When I order expensive items I usually check around & the majority of the time I find Amazon has the best deal and their return policy can't be beat and it's great to be able to read the reviews on their items - what a fantastic help that is in deciding on a certain product. I have never found any item that offers free shipping to be over priced that is just bunk. And their customer service is superior and above. Amazon is one of the best things the internet has to offer - people need to leave it along and let them continue to do the excellent job they are doing.  And as an after thought - purchasing Prime for the sole purpose of getting free shipping is defeating the whole purpose of what the whole concept of Amazon's Prime Membership is all about. We certainly do not want a small amount of contankerous people to spoil a good thing for the majority of us.  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: LaLaLa123 This user has validated their user name.

Thu Mar 6 12:21:00 2014

Silly people.  You can get ''free'' shipping if you spend over $35.  What you get with prime is faster shipping and the whole ebook/movie/tv thing which is pretty nice.

Drop your prime membership if you don't like it.  Ask for a refund.  Amazon would probably give it to you.

The advantage with shopping on amazon is that it's easy and you know that if the item doesn't work it's not a big deal.  That kind of service does generally cost more.  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

This user has validated their user name. by: permacrisis

Thu Mar 6 15:34:24 2014

Just knowing there's a lawyer like this out cruising around for dollars makes me never want to leave my house for fear he'll take it.

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

This user has validated their user name. by: Jessy

Thu Mar 6 16:40:55 2014

EBay is worst-run company I have ever seen: Carl Icahn

http://www.cnbc.com/id/101467290

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: Terry in Texas This user has validated their user name.

Thu Mar 6 21:51:59 2014

i've been a prime member for years and i do love the service. and i totally take advantage of the other offerings, especially the tv/movies/kindle books.

but i do my research when i need to purchase something. i check amazon and sometimes ebay (which i used to check first but not no more), i check google and websites. sometimes amazon has the best deal, sometimes not.

but their policies are easy. i've had 2 returns in the last 6 months and i swear it was easier to return the items than to buy them.  

Perminate Link for Sellers Take Offense at Amazon FBA Pricing Lawsuit   Sellers Take Offense at Amazon FBA Pricing Lawsuit

by: rudestar This user has validated their user name.

Thu Mar 6 22:08:48 2014

CNBC
''Jane Doe  moneyshot • 2 days ago
If Craigslist was such a wonderful sales forum, they would have monetized it by now. If you're selling an individual item (or a big, heavy item that would be expensive to ship), yeah, Craigslist is probably the way to go. If you actually want to make money selling online, ebay or Amazon is the way to go.

You sound bitter like a regular on the ecommercebytes.com message boards. If you don't want to pay the ebay fees which, if you're any good at selling or selling something that people actually want, you fees top out around 10.3%.

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