Amazon Discount Tracker Camelcamelcamel Tips Users to Deals
Gareth Milner, a lance corporal in the British Army Intelligence Corps, planned to buy a 3D television from his local Sainsbury’s store until he received a Twitter message saying the same model was £35 (about $57) cheaper on Amazon.com. The tip didn’t come from Amazon, but from Camelcamelcamel, a website that tracks Amazon’s prices and notifies users about discounts. With Camel keeping watch over the e-tail giant, “I can look back at the historical price to see whether what they’re offering is a genuine discount,” Milner says.
Camel is a leader in the niche field of Amazon price trackers, including Keepa.com and Thetracktor.com, that go a step beyond coupon-cataloging sites such as DealNews and Slickdeals. Run by four coders in Oakland, Calif., five-year-old Camel graphs the prices of most items on Amazon going back months or years. Often, Amazon offers discounts of more than 30 percent that last only a few days, accounting for the hump-shaped graphs that inspired Camel’s name. The Camel browser plugins let people set alerts to receive notifications via social networks or e-mail when the price of an item drops to a specified point. The site has more than 180,000 registered users, though it doesn’t require registration to use its charts, and receives about 25,000 visits on a typical day, says co-founder Daniel Green. That number has almost tripled in recent weeks as the holiday shopping season has gone into full swing.
The Amazon discount tracker has an unlikely partner: Amazon, which funnels sales data directly to Camel. Green says those numbers show wide variation in Amazon’s prices. “They have a number of different pricing mechanisms that they’re playing around with,” he says. “Sometimes they will continue to lower the price until there’s one purchase, and then the price will jump right up. We’ve tested that.” Camel makes its money as part of Amazon’s Affiliate program, which kicks back as much as 8.5 percent of sales from customers the tracker refers. Market researcher Forrester estimates that U.S. companies will spend almost $3 billion for that kind of referral traffic, known as affiliate marketing, in 2013.
Amazon’s cooperation with Camel is an attempt to keep deal hunters happy while extracting as much money as possible from customers who aren’t price-sensitive, says Judith Chevalier, a professor of finance and economics at Yale University. Amazon faced public outcry in its early years for charging different customers different prices based on purchase history or other factors. Now it can instead change prices over time and let bargain seekers self-select through websites at a remove from its own. It’s in Amazon’s interest to keep the barrier to discounts high enough to discourage all but the most interested buyers, Chevalier says: “There’s an optimal level of inconvenience, and it turns out that that’s to have other people provide the service.” Amazon declined to comment for this story.
Green and his co-founders met while working for financial consultant Majestic Research, since bought by investment analyst ITG, in New York. “We were collecting lots of different data from different companies to sell,” he says, when it dawned on them how much information Amazon could provide. They launched the Camel website in 2008 and left their day jobs about a year later. The service provides just enough money to support the four of them, says Green, who wouldn’t disclose revenue or transaction-volume data. “We could definitely all be earning a lot more working for a real company,” he says, adding that Camel hasn’t taken outside investment.
The Camel founders say that while Amazon has been cooperative, they remain leery of tying their success to a continuous supply of data from one source. “Eventually, they will cut us off,” Green says. To prepare for that, the company is looking into tracking prices at other retailers, such as Wal-Mart Stores.