Amazon Changes Algorithm to Promote More Profitable Products, Says WSJ
It wasn’t’ too long ago that we reported on the government’s investigation into Amazon’s misuse of the “Amazon’s Choice” badge, and now the e-commerce giant has been called out by the Wall Street Journal for changing its algorithm yet again. According to several sources that worked on the “secret algorithm,” Amazon has been promoting products with greater profit margins for the last year or so instead of displaying products based on user’s search terms.
Despite internal opposition, Amazon’s Seattle-based retail team pressured the Palo Alto, California-based search team (referred to as A9 engineers) to boost Amazon-made products and other private-label brands that rank high in “contribution profit.” According to the WSJ, contribution profit is “considered a better measure of a product's profitability because it factors in non-fixed expenses such as shipping and advertising, leaving the amount left over to cover Amazon's fixed costs,"
As expected, Amazon is denying the allegations, and was quick to respond with a tweet after the news broke.