In response to Barney Jopson’s FT article on “robo-pricing” the following hopefully places a positive response to the use of high-speed trading tools.
The stock market crash in 2010 can be blamed on the algorithm malfunctions allowing stocks to drop close to zero, so could similar techniques used on Amazon, to aid selling, cause a similar flash crash or worse?
The introduction of complex algorithms and computer technology to the stock market has developed it into a multi-billion dollar industry, with the Dow Jones turning over $6 billion last quarter. Amazon is already an extremely popular selling tool and shows growth even through economic downturn; it showed a total revenue of $49 billion in 2011. Using a proven, high speed trading tool on Amazon, along with clever pricing rules to ensure profit, is a safe move. These pricing rules can also ensure that inventory clear outs are not possible when rogue accounts are a threat.
As e-commerce generates significantly more revenue with significantly less overheads than its retail counterpart, why wouldn’t we want to develop tools to further reap rewards from online selling.
Through careful management from development teams flash crashes should easily be avoidable. To answer the original question, why not harness modern technology to increase the size of your slice size of the Amazon cake.