Monthly Archives: November 2011

Pricing anomaly by online book retailers in India

Last night when I was going through my Twitter timeline a tweet praised about the book “Get to the Top” by Suhel Seth. I admit, I never heard of this book, until I read this tweet. My loyalty towards Flipkart (have purchased 4 books from them so far!), made me first visit their website to check the book’s availability. After noticing the price (Rs. 175) on Flipkart, I just thought to compare their price 2nd website that was at top of my mind, Indiaplaza and I found it to be Rs. 163. Now, this made me greedy and I then landed on Infibeam website, where the prices were Rs.150!!!

Wow! Now this was amazing three closely competing online book retailers having such price variations that too with hardly any difference in services. The research inquisitiveness in me, propelled to just try out a few more websites and the results were pretty interesting, you could see them in the following images!.

I compared the book price on 6 online book retailers. The lowest price was Rs. 150, on Infibeam and the highest Rs.225 on Bookshopofindia.com. Now, that is a huge price variation for a commodity (hope you agree to this classification!), with hardly any difference in value proposition offered by retailers. One could argue I didn’t compare certain invisible parameters like deliver time period, convenience and reliability of payment gateways, customer support services or regular updates by mail / phone about the shipment.

The major firm oriented reasons for such huge price difference could be because of variations in any of the following:

  • Procurement cost from book publisher.
  • Operational costs (technology + manpower + stock keeping + delivery + etc.) of the respective players.
  • Branding costs.
  • Profit making philosophy of the firm.

However, in today’s Internet prone world, especially considering the target audience for such books, the question to be asked is whether those online book retailers could afford to have such huge price difference? More importantly, if they do have valid value propositions to justify the premium charges, how is it conveyed to the first time user? To be very frank, I being a decent Internet user and with reasonable knowledge about online services, couldn’t make out any justifiable difference on websites that were charging higher than the lowest charging website.

Now, lets analyze the situation from a customer’s perspective. Even if the user is not aware of these many online book retailers, a generic search would definitely guide the user to retailers. With the basic human intent of minimizing cost, I don’t think an average Internet savvy user would mind spending 5 more minutes to find a better bargain. As, it took me hardly 5 minutes to compare prices on 6 websites. So, once a user does a basic search when he/she finds such dissimilarity, on what basis do these online retailers expect the customer to make a decision? Especially, if I am a first time customer, how would I know that how bad the service would be from the lowest charging website or how exceptional would be the service from the highest charging website? In the context of this product category, even if a customer is a repeat buyer, I don’t see a reason why he/she shouldn’t try out a new service provider for a better bargain. This is a very rational decision situation for an utilitarian product with no emotions involved.

If you were at my place, which website would have you chosen?