Categories: News

Why are pantry staples so expensive on Amazon? Dynamic pricing.

Normally, a five-pound bag of Nishiki medium grain rice costs around $10 on Amazon. In March, that price shot up to $30, and then to $60. As of this morning, it’s back down—to around $20. What’s going on? It’s not just the limited inventory. The price of rice is fluctuating, The Markup explains, because sellers are relying on sophisticated algorithms that take information about consumer demand and use it to change prices, sometimes hour-to-hour, even minute-to-minute. That system is called dynamic pricing—and while it’s already commonplace for plane tickets, hotel rooms, and baseball games, we haven’t seen it yet for household essentials. Experts worry it can lead to extreme prices that gouge consumers or undercut less sophisticated sellers.

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