Amazon is Playing You…

You’re being duped.

Amazon is throwing a long con your way, full of psychological trickery designed to make you believe that it, and events like its Prime Day sale, are the answers to your online shopping prayers. And you’re eating it up, hook, line, and sinker.

We all know what Amazon is, and most know that Prime Day is Amazon’s midsummer sale extravaganza, packed to the brim with exciting deals that are exclusive to paying members. Amazon has even gone so far as to encourage the labelling of this event as a holiday of sorts by remaining silent on any dissent about such a thing, instead calling this event a “two-day parade”. And the truth of the matter is, Amazon loves the idea of having a holiday dedicated to itself! It gives consumers an unneeded excuse to pull out their wallets and spend money when they otherwise would not. What’s more, studies have shown that people tend to spend more for special occasions (like holidays) than they would, otherwise. To add fuel to the fire, further studies have shown that purchasing something during a sale gives humans a dopamine reward in their brains that is similar to sex. The more a person thinks they are saving on their purchase, the bigger the reward that is released. This kind of conditioning leads to relating sales and savings to feeling good, making it so that we are more likely to consume during a sale in the future. Think Black Friday and Cyber Monday. Year after year, these retail events get bigger and bigger, and when you have had success one time you want more on the next go-around. It’s a cycle that Amazon has paid big money to understand, and counts on to bring you back time and again.

Purchasing something during a sale gives humans a dopamine reward in their brains that is similar to sex.

It is no secret that the retail season slumps during the summer. People are engulfed in the throes of celebrating the sunny weather, going on vacations, enjoying time with family and just generally stay away from shopping for “extras”. The problem with this for the retail industry is quite obvious: summertime means a decline in profits, stagnation, and fighting an uphill battle to bring shoppers into their doors (physically or virtually). To counter this, Amazon came up with their Prime Day event in 2015, to commemorate its 20th birthday. This event, which spans 48 hours and brings exclusive savings for their most elite members, is now an annual celebration of their own invention with themselves as the sole beneficiary. As a business plan, it’s pretty ingenious. Their only problem was marketing this idea to the masses, which turned out to be really pretty easy to do.

Using an aresnal of psychological warfare aimed at consumers, Amazon launched their attack to bring more and more shoppers in. They have spent years cultivating this “holiday” with the ultimate goal of becoming the choice one-stop shop retailer in the world. And it is working. Amazon is systematically attempting to take out the competition by dumping all their resources into collecting Prime members. See, their end-game is not to have the biggest and most profitable sale in history – that is just a nice bonus. What Amazon REALLY wants is more paying members. Members to whom they can continue selling MORE and MORE to over time. The key to success is repeat business, and Amazon is the undisputed champion in that area right now. “The real goal isn’t selling you a ton of stuff [on Prime Day],” says Jim Willcox, technology reporter at Consumer Reports. “It’s getting people to become Prime members, then they have a daily relationship with that customer.”

Without competition, Amazon can pretty much do whatever they want to their consumers. This includes shoppers as well as 3rd party sellers on the Amazon marketplace platform. Lest you forget, most of the products offered for sale on Amazon come from 3rd party sellers who have set up shop in hopes of reaching more customers. Eliminating the competition and making their platform the shiniest, most customer-centric entity on the planet drives even more business in Amazon’s direction and gives consumers of all kinds little other choice in where to shop, or sell, online. The Amazon monopolization of the online retail industry is well underway.

By now, you’re probably asking why this is such a bad thing? Having a singular place to go to online and get all your shopping needs met, AND partake in some great savings during the Prime Day sale (for one) sounds pretty swell! It’s not. Remember earlier when I mentioned Amazon is throwing a long con at you? This is part of it. Pschological and societal conditioning that Amazon, as an entity, has spent years cultivating has fooled people into truly believing that they are getting the best deals, saving the most money, and that everyone goes home happy at the end of the day. They are playing on our biological responses to generate profits. Amazon has spent a great deal of money studying consumer behaviors and consulted with some of the top behavior economists in order to construct their marketing plans. All designed to trick consumers (i.e. YOU) into spending money on Amazon, specifically, instead of anywhere else.

Further, Amazon has aided in re-characterizing shopping trends, like moving the Back to School frenzy even earlier than tradition has seen and forcing other retailers like Walmart and Target to follow suit simply to stay relevant. Amazon has capitalized on targeted marketing and opportunistic shoppers to draw you in, using cookies in your browser to follow you around the internet and customize ads for products sold through their marketplace based on your search history and browsing habits. They use subtlety mixed with overt advertising to ensure the first place you look for a product is within their website. They innundate shoppers with “BUY NOW BEFORE IT’S TOO LATE” schemes, creating an environment which allows consumers to justify spending money outside their budgets because “it was such a good deal”. What’s more, Amazon is counting on you to throw all of your eggs into its basket and make you feel good about doing so through all the smoke and mirrors.

For 3rd party sellers on the platform, it is an entirely different kind of game that is played. The draw to the Amazon marketplace for sellers is the potential of reaching billions of customers each month. Sponsored ads, branding, attractive listing pages, options for Fulfillment by Amazon (let Amazon pack and ship everything for you – all you have to do is send your products to them), and a competitive market paint a beautiful picture full of dollar signs and sunshine. Wrong again. It costs money to make money, obviously, but on Amazon this concept is taken to a new level. In a word: Fees. Subscription fees, per-item fees, referral fees, closing fees. It costs $39.99 per month for a Professional Selling Plan on the Amazon marketplace, or you can opt for an Individual Selling Plan which has no monthly cost. The trade-off is that you are then charged $0.99 per item sold. On top of that, a referral fee is charged on a per-item basis, as well. This fee ranges from 6% to 20%, or as high as 45% if you are selling Amazon devices, but usually settles in the range of about 15% of the sale price of an item. Referral fees can also be charged as a minimum referral fee up to $2, depending on the category the item falls under. Amazon bills Sellers whichever referral fee is higher. Then comes the variable closing fee. For each media item sold, Sellers also pay a standard fee of $1.35. These fees add up fast, and cause Sellers to mark up their pricing just to be able to make any money and stay in business.

Take GoodBulb, for example. This listing for a 2 pack of LED 3-way light bulbs is listed at $22.99 on our Amazon store. Taking into consideration the cost of shipping this product to an Amazon facility, plus the cost of special packaging required by Amazon to house produts in their facility so the products are prepped for quick and hassle-free shipping, plus the cost of Amzon selling fees, plus the actual cost we paid to manufacture these bulbs all play into the listed price of $22.99 on this platform. Now, lets migrate over to GoodBulb.com for this same item where you can purchase it for $8.52 each. You can find examples just like this for billions of products from millions of brands selling on Amazon.

Now, let’s talk about the environmental impact Amazon is having on our planet. With their Prime membership promise of Free 2-Day shipping, and with thousands of new Prime members signing up every day, the culture of “want it, need it, gotta have it now,” is creating an entirely unsurprising issue of environmental damage from the inefficient shipping model that is so attractive to buyers. This culture has inspired Amazon to cater to the consumer even more by rolling out free 1-day and same-day delivery for Prime members, as well.

“I don’t think the average consumer understands the environmental impact of having something tomorrow vs. two days from now. The more time you give me, the more efficient I can be. The time in transit has a direct relationship to the environmental impact.”

Patrick Browne, UPS director of global sustainability

With the announcement in May 2019, of offering members free one-day and same-day delivery with no minimum purchase, Amazon left no choice for other retailers but to follow suit, or suffer for it. Other retail giants, like Walmart and Target, have had to step up and roll out their own programs to meet the consumer demand for instant gratification. Such programs have, unfortunately, come at an added cost to the environment by way of increased carbon emmissions. “I don’t think the average consumer understands the environmental impact of having something tomorrow vs. two days from now. The more time you give me, the more efficient I can be,” says Patrick Browne, director of global sustainability at UPS. “The time in transit has a direct relationship to the environmental impact.”

UPS revealed that the e-commerce frenzy had seen a decline in the number of packages dropped off per mile in 2017, resulting in an increase in trucks on the road, and with that an elevated level of greenhouse gas emissions as a direct result. Meeting the demand for 1-day delivery programs will only impact these numbers even more. A faster turnaround on getting packages to their destinations means less time and ability to ensure courier services can fully load vehicles for the most efficient deliveries. This means more vehicles on the road making more trips to bring more products to consumers on demand. Boom. Carbon emissions increase even more.

Another side to faster delivery is the cost to consumers. But, it’s FREE Prime delivery, right? Wrong. This is yet one more smoke and mirrors tactic employed by Amazon to draw customers to their gates. Free never really means free. Someone is going to foot the bill, and that cost is almost always passed along to consumers in the end. Amazon has absorbed the cost of offering free shipping to its members for years, and their willingness to do so has shown to be worth it as they have grown exponentially over the past 20 years. Shipping costs for Amazon have climbed into the billions of dollars per year, and that cost seems likely to continue increasing as Amazon continues growing. However, despite the promise of free shipping for customers, what you likely don’t take into consideration is that the shipping cost is almost always built into the advertised price of the product you are buying. This is either directly done by the 3rd party seller offering the product on the Amazon marketplace, offset through your annual Prime membership fee, or seen in the actual advertised price of an item. One way or another the cost to ship that product to you is being accounted for somewhere along the line.

So, what was the point in telling you all of this? Was it simply to deride Amazon as a whole and try to convince you to abandon your Prime membership in light of hipster ideals? No. Absolutely not. There has been a lot of harping on Amazon in the media lately for reasons that, honestly, make a lot of sense. A multi-billion dollar company skirting loopholes to avoid paying taxes when the average Mom & Pop shop is forced to close its doors from an inability to keep up; Jeff Bezos’ personal relationship status and how much his ex-wife won in their divorce; how Amazon has become a retail giant that is aiming to put all others out of business. These are all sensational stories with merit, sure. Amazon has done a lot to garner the attention it has been given, and it has been a place that has launched insanely successful businesses for people, as well. With the negative, there is generally some positive, however do not lose sight of the fact that Amazon’s main goal is take your money.

And if you are going to spend your money, why not spend it in places that will put it to good use? Companies like GoodBulb, who’s aim is to make a difference in this world by setting aside a portion of every sale made in order to provide life-saving light to families living without electricity and eliminate dependency on kerosene. Companies who focus on giving back to this world rather than taking from it. There is so much more to life than meeting your immediate demands. While the convenience of having anything you desire in your hands in less than 2 days is enticing, the real-world impact of the “need it, want it, gotta have it now” mentality is yet to be seen to its fullest extent. So, next time you hop online to make a purchase, for whatever it may be, consider the bigger picture and maybe take a moment to look elsewhere to fill your needs. And don’t let yourself get duped.