Online prices



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Clearly the time is now ripe for my latest software start-up venture: a company that sells software that over-writes cookie data to make the online shopper look poor, indecisive, and highly price-sensitive. Viva the evolutionary arms race!
Now, how should I decide how much to charge for this product...?

SET Sail

10 years ago in industry there was a frenzy for reverse bidding in e-procurement: it did bring immediate results, but sellers learned fast and many refused participating in the commodization process.

as usual the newest mouse trap will work a while and then law of diminishing returns sets in.


Rather than investing in such dubious technologies, sellers should invest in something useful, like customer support or website optimalizaion and responsiveness.

Now sellers will spend money for price-maximizing engines, customers will spend money/time/ad-watching on countermesures, and we will be where we took of, with both sides just squandering some resources. I wonder if this type of arms race can bring something useful, too.

umghhh in reply to Rincewind_wizzard

if you are a moneybag chances are that you do not care. if you are poor you are not worthy investment in customer care. either way investing in this service seems to be a good choice at least in short term or as long the customers do not feel being stupid by allowing this


It can only work if businesses that use the software assume that customers are thick!

When customers find out that they have been overcharged or shortchanged, they will spread the message via social networks and online forums. They will also boycott the businesses.

Customer loyalty is the most important factor for lasting business success. Acquiring customers is very expensive and unless they stay and make repeat purchases, profits will remain elusive.

When a business earns trust, customers will make repeat purchases and refer their friends, so trust is the most important factor in building loyalty.

Without the glue of loyalty, businesses will have little chance of survival in today’s highly competitive markets.

Stuki in reply to Kjay50

How do you find out you were "overcharged" on a home insurance policy?

Really, the only way to beat this, is the two time honored traditions of either knowing and trusting the seller, or soliciting multiple bids. Online, the former will be rare, and the latter time consuming and inconvenient. But by signalling you are one of those who are unwilling to put up with some inconvenience to save a few bucks, why wouldn't sellers up your price a bit?

Two-Continental in reply to Stuki

Exactly, take the Japanese approach - quote as many sources as you have time/patience for, and make your choice from there. Increases competition among suppliers, and optimizes your lot as the customer.

mechanicum in reply to Kjay50

It's not that simple. Companies are becoming huge conglomerate monopolies. Look at the airlines or supermarkets. They can charge you whatever they want and they know you will be back, you have no choice.


My wife and I live in a neighborhood most Americans would call middle class, and about a year ago, we converted to Macs (from PCs). I can't say I have noticed any changes in the prices we have traditionally been charged on-line, but this article does make sense; if I were a seller, I would certainly be doing it. However, as a consumer, I don't consider it all that sinister. Rather, I think of losing on the roundabouts and gaining on the swings... we have two upscale supermarkets, and one that is in a lower-income, immigrant-rich sub-division within our zip code, all within a half-mile of our home. Prices for the same items in the lower-end supermarket are in some cases only half what we pay in the others; this is particularly true of meats, even though there is no noticeable loss of quality.
On-line, off-line... no difference. Businesses will do whatever they can to maximize profits.
So, caveat emptor is right. But I have no complaints.
This was an interesting article. Thanks.

The Energiser

Sounds like another reason to switch off cookies...

guest-iswnome in reply to Walker Rowe

cookies only represent information stored locally, why wouldn't businesses like amazon track all info in their databases, loaded with info and then use it the moment a user signs-in. But, I agree, some may be using info from cookies only and by blocking cookies, one can restrict that.

guest-iswnome in reply to Walker Rowe

businesses are mining data from social networks as well, so, we need software that posts dubious information that is not embarrassing enough for a fb post but good enough to make one look poor and careful with money.

Brendan D

The 'cash rich, time poor' may fall for this but all that will happen is that we will see retailers in each segment positioning as the 'consumer's friend' and promising consistent pricing. And what about the aggregators such as Kelkoo, what price will they display? Looks like a technology induced pipe-dream to me and internet retailers better get used to the new reality of lower prices and transparency - the customer is king!

Stuki in reply to Brendan D

Pipe dream, schmipe dream. Many, if not most, products bought are not comodities. Obviously charging people different prices for oil futures won't work, since pricing information is so easy to obtain. But for products like health care services, pricing based on perceived willingness and ability to pay are pretty much the norm.

And, as for many things on the interwebs, those billing for the porn peddlers have been engaging in this kind of "price discrimination" for at least 10-15 years already. As have, more indirectly, the movie studios with their differing DVD prices in different regions etc. As have fashion houses, with their outlets and different prices in different regions.

For any product where most of the cost is fixed up front, and the incremental cost of selling one additional unit is small; it simply makes sense. Why deprive some destitute in a third world nation of the opportunity to see Slumdog Millionaire, simply because all he can afford to pay is 50 cents, when making an additional copy only costs 25? But at the same time, if every too big to fail bailout recipient could watch it for the same price, there simply wouldn't be enough potential revenue out there to warrant making it in the first place.

umghhh in reply to Stuki

that is interesting that you mentioned dvds - when they arrived I was all hots: bought a tv set (prior to this I did not bother to have one as I do not watch tv), dvd player and few dvds because now I could watch stuff in original and w/o commercials - to my terrible surprise I found out that I had to twist my player (voiding warranty) if I wanted to see particular movie not available in Germany so purchase from US. now I do not bother to buy anything and I stopped going to cinema too - you lost a customer completely by trying to bully him. that is not awfully smart or is it?


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