Amazon's $23.7 million book about flies

[Brian]

Fun blog post about how two third-party booksellers on Amazon Marketplace got into an automated bidding war, using algorithmic pricing software, which resulted in a textbook on the development of fly anatomy being priced at $23,698,655.33. Aside from being hilarious, it's an interesting look at how the third-party sellers on Amazon actually work.

[DavidW]

I say that yes, many big stores on the marketplace use algorithms to automatically update pricing.  But this is an unusual case, usually price matching is to have the lowest price.

The blogger's speculates that they don't even have the copy but hope to acquire it, and I think that's not likely.  Here's why: as a third party seller I can tell you that amazon allows two business days to ship the product.  And you don't get paid until you ship it.  You don't make any money by listing things that you don't have.  And most of the things that sell on amazon you would not make much money on individually anyway.

And most sellers don't price things up unless it's for a rare or hard to find item that people would fixate on value=price that you would pay.  This is really schilling and it's more a common practice with individual sellers than large stores.

[Scarpia]

In this case one sellers algorithm set the price to be 10% below the highest competitor and the other set it to 20% higher than the highest competitor.  As a result the price went up by 10% for each iteration.

I guess these robots are inevitable, no retailer has the time to check 30,000 listings every day, but what this one needed was some sort of exit condition to prevent the infinite loop.