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On e-commerce sites (such as Amazon and Newegg.com) pricing in some products will be hidden until you click a link to display the price in a modal/popup, or you are required to add the item to your cart to view its pricing.

Amazon hiding the price

I'm curious about what the reasoning behind this is and what impact this could have on customers and users of the site?

I've read that sometimes this is due to the seller's pricing not being in line with the Manufacturer's recommended pricing and therefore can't publicly display their price, is this always the case? Is this pattern for other purposes, and if so what would those be?

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As far as I can tell, amazon does not hide prices, at least not for books. –  Marjan Venema Mar 5 '13 at 6:54
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3 Answers 3

up vote 16 down vote accepted

It's explained in Amazon's website, in this page Why don't we show the price?:

Retailers like Amazon have the legal right to set their own prices independently, but some manufacturers place restrictions on how those prices may be communicated. Because our price on this item is lower than the manufacturer's "minimum advertised price," the manufacturer does not allow us to show you our price until you take further action, such as placing the item in your shopping cart, or in some cases, proceeding to the final checkout stage. The steps required depend on the details of the manufacturer's minimum advertised price policy. Taking these steps allows Amazon to show you our price consistent with our goal of always offering you the lowest possible prices on the widest selection of products.

This won't require you to purchase the product. You can easily remove it from your cart if you decide not to buy it.

We realize that this is an inconvenience and are regularly working to educate manufacturers on how their policies impact our customers. We welcome your comments and suggestions in our forum on this topic.

This is certainly a not user-centered design decision, and as such, is bad for the overall user experience, there are two disadvantages that stem form this decision:

  1. The price information (which is probably the most important piece of information after the product name) is hidden two-three clicks away
  2. You loose the ability to do price comparisons for product categories that include these type of products, either in the same site or through other comparison sites.
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Newegg.com provides a similar explanation: "Manufacturers occasionally suggest that products be advertised at their suggested retail price. When we decide to sell items for less than the suggested price, the sale price can only be shown in your cart." –  Matt Obee Mar 5 '13 at 9:45
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I wonder if this habit becomes widespread, and users would come to see this as a sign of low prices, would retailers use this mechanism to elicit false expectations of selling below advertised price, while not actually doing it. –  Dvir Adler Mar 5 '13 at 13:49
    
Do we know that this explanation is real, and not something orchestrated by the retailer+manufacturer to improve sales? –  Andrey Mar 5 '13 at 14:27
    
i really fail to see how this could possibly increase sales. i would simply NOT add an otem to my cart or even worse go to the checkout page just to see a price. especially if its an ecommerce site i shop infrequently. –  DKOATED Mar 5 '13 at 18:54
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I worked for a certain large online retailer for several years. I can tell you there's a continual back-and-forth going on between retailers and manufacturers on the issue of Minimum Advertised Price (or MAP). It's literally discussed at almost every meeting with a manufacturer. A few years ago, letting customers click to see the price instead of adding to the cart was quite a controversial idea among manufacturers, let me tell you.

Retailers want to show the price to consumers as early and often as possible, and they want the flexibility to aggressively discount when it serves their purposes, even though this cuts into their margins. The main motivations: matching a competitor's price or needing to reduce inventory.

Manufacturers, on the other hand, believe that advertising their product below a certain (totally arbitrary) price threshold will degrade the perceived value of their products and ultimately degrade their entire brand. They're quite superstitious about this. They constantly talk about Price Erosion - more on that later. In essence, manufacturers try their best to maintain artificially high prices on their products for as long as possible, and one way to do this - they think - is to keep perceived value as high as possible by hiding prices. Convoluted logic for sure.

Retailers are not legally required to hide the price, but as you might imagine, continually defying manufacturers' wishes does lead to repercussions. Amazon, Newegg, and the rest know that hidden prices are a bad customer experience so they try to strike the best balance they can. Lately, that's taken the form of click here or add to cart to see the price.

SIDE NOTE:

Price erosion is a natural phenomenon during the lifetime of many consumer products, unless supply is constrained or demand stays high. Some companies have built such strong brands that they rarely need to worry about soft demand. This makes their products virtually immune to price erosion, and as a result they don't need to hassle retailers about MAP. Apple is a prime example. Retailers rarely need to cut prices on an Apple product in order to get it moving off the shelves. Why? Apple has a reputation for high quality and better overall user experience compared to the competition. It turns out people are willing to pay more for this. Shocking, I know ;-)

EDIT: Hiding Price to Increase Demand

There are actually times when this will work for a little while. Usually on products that have a lot of price volatility. The theory is that we've gradually acculturated to think hidden prices imply higher value. But it's the exception to the rule. As a manufacturer, you're much better off building a good product than trying to play little games with the price.

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Websites do this for multiple reasons, but I assure you none of them do it from a usability point of view.

I have friend on one of the websites that does that (none of which you mentioned) and he says that sales drop on some items if they display the price for certain items.

However, other prices are not displayed because of the "minimum advertised price". Basically sellers prohibit amazon and others to display a price under a certain threshold for a particular item. The workaround is not to advertise it and show it once you add it to the basket. This also prevents search engines to catch them when they crawl the web.

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