Using Amazon’s Biased Algorithms
Published by Abbi in Pricing Strategy, Amazon Algorithms
A recent report by ProPublica seems to have confirmed suspicions that Amazon's proprietary algorithms are weighted towards furthering its own retail business instead of necessarily offering consumers the best value deals. More often than not, Amazon leads customers to Prime-enabled and Fulfilled by Amazon (FBA) listings first, meaning independent sellers are less likely to get business for that product.
ProPublica's report reflects Amazon's incredible growth; as the number of Prime users continues to skyrocket, Amazon has also opened 120 new US based fulfilment centres over the past year. They also currently offering Prime Now in over 30 cities in the US, 9 in the UK and many more worldwide. As it gains even more of the retail share market, it is becoming increasingly essential for sellers to know how to work the system to ensure continued sales.
One such way is by using FBA. Whilst it can have its downsides, like storage fees, damaged goods and short-term holiday surge prices, if utilised in the correct way it can help boost profits. Working out which products will benefit from FBA, such as lighter and fast-selling items and eliminating stockouts, by regularly monitoring sales volume and price changes, will put sellers on track towards this.
Other crucial elements that sellers must consider are having an effective pricing strategy, collecting good reviews and enhancing product descriptions for search optimisation, in order to make sure their listings continue to be seen by consumers and to use Amazon's algorithms to their advantage.