How Amazon Convinces You That It Has the Lowest Prices on Everything

When you're looking to buy an item, your first thought is probably that it's cheaper on Amazon.

It certainly appears to be that way and a recent report explains how Amazon creates the perception that everything is cheaper through them—even if that's not true.1

Introduction to Price Perception Index (PPI)

Most people assume that Amazon has the lowest prices across the board, but they don't. The report, from Boomerang Commerce, identified Amazon's main tactic when it comes to undercutting prices. Amazon determines the most popular products on their site and then consistently prices them under the competition. For example, you might find a popular TV on Amazon that's cheaper than another retailer, but the accessories that go along with it could have their prices jacked up to make up for it. Or if you're looking for a much less popular TV, the price could be pushed up as well. The report explains:

Amazon may not actually be the lowest-priced seller of a particular product in any given season, but its consistently low prices on the highest-viewed and best-selling items drive a perception among consumers that Amazon has the best prices overall — even better than Walmart.

This is called price perception, and Amazon employs this clever tactic for bringing in and keeping customers. It's something you should keep in mind the next time you go to buy an item. Remember, shop around a little. Just because it seems like one place has the best prices it doesn't mean they do. Amazon does have some great deals and ordering from them is pretty painless, but always do your research.

read more : http://lifehacker.com/how-amazon-convinces-you-that-it-has-the-lowest-prices-1679558935

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