The NYTimes has finally discovered that under capitalism, sellers can price their products however they want. Earlier this week they published a story on books being listed on Amazon.com at prices ten times or greater than the market rate.
I know, I know, this has been going on for years, but apparently it was news to David Streitfeld.
Many booksellers on Amazon strive to sell their wares as cheaply as possible. That, after all, is usually how you make a sale in a competitive marketplace.
Other merchants favor a counterintuitive approach: Mark the price up to the moon.
“Zowie,” the romance author Deborah Macgillivray wrote on Twitter last month after she discovered copies of her 2009 novel, “One Snowy Knight,” being offered for four figures. One was going for “$2,630.52 & FREE Shipping,” she noted. Since other copies of the paperback were being sold elsewhere on Amazon for as little as 99 cents, she was perplexed.
“How many really sell at that price? Are they just hoping to snooker some poor soul?” Ms. Macgillivray wrote in an email. She noted that her blog had gotten an explosion in traffic from Russia. “Maybe Russian hackers do this in their spare time, making money on the side,” she said.
The wild book prices were in the remote corners of the Amazon bookstore that the retailer does not pay much attention to, said Guru Hariharan, chief executive of Boomerang Commerce, which develops artificial intelligence technology for retailers and brands.
Third-party sellers, he said, come in all shapes and sizes — from well-respected national brands that are trying to maintain some independence from Amazon to entrepreneurial individuals who use Amazon’s marketplace as an arbitrage opportunity. These sellers list products they have access to, adjusting price and inventory to drive profits.
Then there are the wild pricing specialists, who sell both new and secondhand copies.
A decade ago, Elisabeth Petry wrote a tribute to her mother, the renowned novelist Ann Petry. “At Home Inside,” published by the University of Mississippi Press, is now out of print, but late last week secondhand copies were for sale on Amazon. A discarded library copy was $1,900. One seller offered two copies, each for $1,967, although only one was described as “Nice!” All these were a bargain compared with the copy that cost $2,464.
The general consensus on Twitter is that this is a sign of some kind of money laundering activity. After all, these books aren't just being listed, they're actually selling at the inflated prices.
That is how I initially approached this story, and in fact, I had this whole intro that referenced a romantic comedy, but I'm not convinced that it is applicable.
One of the subplots in the 1999 Hugh Grant movie Mickey Blue Eyes involved Grant's future father in law using the auction house where Grant worked for a money laundering scheme. A truly awful painting was sold at a high price, and the sale was used to transfer funds from one accomplice to another.
If the movie were set ten years later, they could have used Amazon.
But now I am not so sure that is the case. Yes, money-laundering operations have been found on Amazon.com before, but it's not at all clear that is what is going on here.
Instead, these prices remind me of the weird over-priced gadgets that people have wasted their money on.
The Juicero, for example, was an $700 that took DRMed juice packets and performed about as well as squeezing the packets by hand.
People not only bought the Juicero sight unseen, the company picked up $70 million in capital investment based on nothing more than hype.
If people are eager to buy a Juicero and invest in the company then (in the absence of any evidence to the contrary) it is just as likely that the high-priced book sales are just as legitimate.
Yes, i don't understand it either, but that is true for many topics.
What do you think?
image by Coffee-Channel.com