How Amazon uses “surge pricing,” just like Uber | CBS News

Consumers looking for the best deals on everything from clothing to TVs have been well trained to price-check online, often starting at e-commerce behemoth Amazon (AMZN), which trumpets its aim to match “the lowest prices.” But beware.

So-called “dynamic pricing” has long bedeviled travelers by jacking up the cost of air fares and hotel rooms, and now it’s becoming common among online retailers. That technique, also known as surge pricing, could dramatically drive up the cost of items you want to buy online.

Jason Jacobs, founder of a company called Remodeez, learned this lesson the hard way. Every time the shoe deodorizer he sells is written up in a major market publication, the retail price soars on Amazon, he said. In the most recent instance, the $9.99 suggested retail price nearly doubled. Jacobs suspects that Amazon’s pricing algorithms push up prices as demand spikes.

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How Amazon uses “surge pricing,” just like Uber – CBS News.