Amazon changes prices on its millions of products throughout the day.
Sometimes, that means altering the price of a single item several times over the course of 24 hours, according to a new report.
The report cited one case where the e-commerce giant changed the price of a wireless internet router eight times in one day. The price of the router fluctuated between $US185 and $US200, as shown in the graph below.
Amazon bases many of its price changes on the actions of competitors.
“What Amazon aspires to be is the fastest follower of the price leader,” said Jenn Markey, the vice president of marketing for 360pi, the price intelligence firm that authored the report.
Amazon has been estimated to alter its prices more than 2.5 million times daily. By comparison, retailers such as Best Buy and Wal-Mart make roughly 50,000 price changes over the course of an entire month.
360pi estimates that Amazon changes the prices of 15% to 20% of its inventory daily.
The retailer’s price activity can depend on the product, Markey said.
“Amazon has already secured significant share in electronics and enjoys popular perception of being the price leader, which generally translates to fewer price changes for products in this category,” she said. “The opposite would apply to home renovation products today, a category that Amazon appears to be targeting for share growth.”
Amazon also makes price changes according to the time of day when consumers are most likely to be shopping for a particular category.
“For example, there are more frequent price changes for video games in the evening than daytime,” she said.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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