Amazon’s Latest Experiments in Pricing

I love Amazon, because they are always experimenting.

Here are two experiments I ran across yesterday as I was browsing their website.

The first offer was an additional discount that is applied at checkout.  I hadn’t seen this on Amazon before. On this discounted listing, The Only Thing‘s price decreases 83 cents, representing another 3% off the price of the book. The offer appear to encourage customers to put things in their shopping cart. The amount is also odd, not seeming to be connected with the retail price or the discounted price.


The second offer was even more interesting. After I saw the offer above, I wanted to see if I could find a similar offer on another book. I assumed the offer would be made on other books that sold well, so I went to the bestseller lists and looked at business books.

The #1 title on the Amazon business bestseller list is a book called Bluefishing. Even more interesting is that the audio edition of Bluefishing holds the top slot right now. I wasn’t interested in the audiobook. I shutdown my Audible account a couple of months ago because I couldn’t listen fast enough to use all my credits, so I clicked over to the Kindle edition. I saw immediately two things I hadn’t seen before.

First, they were pushing this title on Kindle and specifically with a 25% credit toward other Kindle books in the “Great on Kindle” program. Second, I noticed that I had $1.00 in ebook credits. I had never seen that before.


I was interested in the Great on Kindle program, so I clicked on the Learn More link.


The copy was selling pretty standard benefits for ebooks – save where you left off, start reading now, adjust the font, text-to-speech integration, etc.

The primary benefit is the credits (which expire after 60 days), so I clicked through to see other ebooks where in the program.  There is page dedicated to the Great on Kindle offer.  The books were divided into six broad categories that you could page through. I would guess there are 100 to 150 books total across the whole program based on the duplication across categories.



This offer is pretty interesting, if you know a little history about book publishing.  In 2010, Amazon and the major book publishers engaged in some heated negotiations about the way ebooks would be sold. Publishers wanted to take control of ebook pricing, because they felt that Amazon had been abusing their power as the largest ebook retailer and forcing prices down. As retailer, Amazon wanted to continue to keep that power and felt that lower prices were better for customers. The flash point came when Amazon removed all of Macmillan’s books from their website for almost a week.  When the dust settled, publishers won the concession of being able to set prices for ebooks (and that turned into a huge anti-trust lawsuit between Apple with the major book publishers and the federal government, but we’ll save that for another day).

After publishers wrestled back control of pricing, the data showed pretty conclusively  that prices increases.  Amazon consistently offered pricing at $9.99 and lower for ebooks.  Looking through the Great on Kindle titles, you can see pricing at $11.99, $13.99 and even $14.99 for ebooks (and there are some titles priced lower than that too).

Without the power to do it directly, Amazon is lowering prices by offering in-store credits to use on future purchases.  The offer isn’t as direct as a lower selling price, but it lets them test if the indirect route to a lower price helps sell more ebooks.


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