I ordered an SD memory card from Amazon the other day, and the price was a very cheap £5.00. Great, I thought, so I ordered it but was suprised to see that the postage was another £5.00. Seemed excessive I thought, but at least it will come quickly and probably be sent by recorded post.

But no, that's not what happened.

The item took about a week to come and was simply in a plastic envelope with a first class stamp. They must have had made as much, or more, profit through their "postage" costs as they did through the price of the item itself. Of course, this kind of practice isn't new. You commonly see it on eBay where the fixed price of items can be artificially low but with the money recouped through high postage.

But what's the impact of this?

For Amazon, I think it diminishes their reputation. The fact that it's from a 3rd party is a subtlety which will be lost on many users and I expect them to believe they are simply getting it from Amazon, and that Amazon are using this strategy of artificially low prices. That's not good for Amazon.

For Amazon Associates (on the Performance model, which includes 3rd party sales), it's a raw deal because the commission earned is on the price of the item not for the shipping costs. So if the seller has artificially low prices, the affiliate is missing out on the commission from where the profit is really made - on the postage.

Basically, it sucks.

Labels: affiliate marketing, amazon