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You May Not Be Seeing Amazon's Best Prices

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Brick-and-mortar stores have taken a tremendous hit in the last ten years, thanks in large part to online megamalls like Amazon.com. But we’ve become so used to the idea that the best deals are found online that we may not even check to see if that’s true. A new study, presented at the 25th Inter­na­tional World Wide Web Conference in April, suggests that Amazon’s featured sellers often charge more than their competitors.

This stealth de-bargaining is the result of two algorithms colliding. First, there’s algorithmic pricing, in which a third-party (3P) seller uses one of several formulas to determine how to price each item. Some sellers may opt to undercut the competition, charging less than the current lowest price, but others may choose to charge more, banking on the fact that you won’t notice or care. 

Next, there’s Amazon’s internal algorithm, the one that determines which seller’s product will be featured in the “Add to Cart” box, also known as the Buy Box. The algorithm does take an item’s price into account, but it also considers a seller’s ranking, positive reviews, and participating in Amazon Prime.

Image Credit: Wilson, Le, and Mislove, 2016.

Researchers at Northeastern University wondered how common algorithmic pricing was, and if it was helping or hurting shoppers. Over the course of two extended site “crawls,” the researchers captured pricing and 3P seller information on 1641 of Amazon’s best-selling products. 

Their results suggest that algorithmic pricing, while not common, gives sellers a significant advantage. Buyers? Not so much. “Amazon has a rel­a­tively low number of algo sellers—from 2 to 10 per­cent,” lead author and computer scientist Christo Wilson said in a press statement. “But they cover almost a third of the best-selling products offered by out­side mer­chants, so the impact is large.”

These high-profile sellers don’t always rise to the top by offering the most stable prices. Wilson and his colleagues found that the prices of 333 of the 1000 products they tracked changed once a day. Prices for 170 of those prod­ucts changed more than three times per day, and 50 changed more than eight times per day. “The prices of products offered by algo sellers were almost 10 times more volatile than prod­ucts with no algo sellers,” Wilson says. 

Nor are featured 3P sellers’ prices necessarily better than those of the competition. “We found that 60 per­cent of sellers using algo­rithmic pricing have prices that are higher than the lowest price for a given product,” Wilson says. “Now, 70 per­cent of the time they only raise the price by $1, but there are many cases where the price increase is on the order of $20 to $60. So you really have to take that extra step and click through to the list of all sellers for a given product if you want to find the lowest price.”

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These Are the Top 25 U.S. Cities With the Lowest Cost of Living
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Coastal cities like New York and San Francisco bustle with excitement, but residents pay plenty of hard-earned cash to enjoy perks like Central Park and world-class museums—and to pay their sky-high rents. If you’d rather have a full bank account than a hipster ZIP code, consider setting down roots in America’s most affordable region: the Midwest.

Niche, a data analysis company, has ranked the 25 cities with the lowest cost of living across the United States—and the top 10 are all located in America’s heartland. Their selections were based on factors including access to affordable housing, food and fuel costs, and median tax rates, all of which were gleaned from U.S. Census and Bureau of Labor Statistics data.

Indiana was the most-represented state in the list’s top 10 section, with Fort Wayne, Evansville, and South Bend nabbing the first three spots. The remaining cities were mid-sized metropolitan areas in Kansas, Ohio, Iowa, and Illinois, all of which offer urban conveniences at a fraction of the cost of their coastal counterparts. After that, other cities in the mix included municipalities in Texas, Michigan, Alabama, South Dakota, and Minnesota.

Check out Niche's top 25 list below, and visit their website to view their methodology.

1. Fort Wayne, Indiana
2. Evansville, Indiana
3. South Bend, Indiana
4. Topeka, Kansas
5. Toledo, Ohio
6. Wichita, Kansas
7. Akron, Ohio
8. Cedar Rapids, Iowa
9. Davenport, Iowa
10. Springfield, Illinois
11. Rochester, Minnesota
12. Dayton, Ohio
13. Springfield, Missouri
14. Wichita Falls, Texas
15. Kansas City, Kansas
16. Odessa, Texas
17. Cleveland, Ohio
18. Indianapolis, Indiana
19. Abilene, Texas
20. Sioux Falls, South Dakota
21. Montgomery, Alabama
22. Lansing, Michigan
23. Des Moines, Iowa
24. Brownsville, Texas
25. Warren, Michigan

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Switzerland Flushes $1.8 Million in Gold Down the Sewer Every Year
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Switzerland has some pretty valuable sewer systems. As Bloomberg reports, scientists have discovered around $1.8 million worth of gold in the country's wastewater, along with $1.7 million worth of silver.

Scientists at the Swiss Federal Institute of Aquatic Science and Technology examined sewage sludge and effluents, or discharged liquid waste, from 64 water treatment plants and major Swiss rivers. They did this to assess the concentrations of various trace elements, which are "increasingly widely used in the high-tech and medical sectors," the scientists explained in a press statement. "While the ultimate fate of the various elements has been little studied to date, a large proportion is known to enter wastewater."

The study, which was recently published online in the journal Environmental Science & Technology, revealed that around 94 pounds of gold makes its way through Switzerland's sewage system each year, along with 6600 pounds of silver and high concentrations of rare metals like gadolinium and niobium. For the most part, these metals don't harm the environment, researchers say.

With gold and silver quite literally flowing through their sewers, is there any way that Switzerland could turn their wastewater into wealth? Scientists are skeptical: "The recovery of metals from wastewater or sludge is scarcely worthwhile at present, either financially or in terms of the amounts which could be extracted," the release explains.

However, in the southern canton of Ticino, which is home to several gold refineries, the "concentrations of gold in sewage sludge are sufficiently high for recovery to be potentially worthwhile," they conclude.

Switzerland is famous for its chocolate, watches, and mountains, but it's also home to major gold refineries. On average, around 70 percent of the world's gold passes through Switzerland every year—and judging from the looks of it, much of it goes down the drain. As for the sewer silver, it's a byproduct of the chemical and pharmaceutical industry, which is a cornerstone of Switzerland's economy.

[h/t Bloomberg]

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