Dozens of online sellers erroneously set product prices at one cent earlier this week, thanks to a software glitch at repricing software company Appeagle, which helps sellers in online marketplaces automatically adjust prices to keep up with their competition. The glitch affected prices displayed on Amazon.com and Buy.com, Appeagle says.
The penny prices appeared for about 15 minutes on July 17 before Appeagle was able to work with Amazon.com Inc. and Rakuten Inc.’s Buy.com to fix the problem, says Zee Mehler, Appeagle’s chief marketing officer. Amazon was able to cancel orders that were to be shipped through its Fulfillment by Amazon program, in which Amazon warehouses and ships goods for retailers, and Appeagle assisted clients in stopping most other orders placed on Amazon and Buy.com, Mehler says. Neither Buy.com nor Amazon immediately returned requests for comment.
Some of the affected sellers’ competitors were ordering the one-cent goods, and some by the dozens to take advantage of the prices, he adds.
For orders that couldn’t be stopped, Appeagle assisted sellers by contacting buyers in an effort to recover some of the shipped goods, and it has issued credits totaling less than $25,000 for unrecoverable orders, Mehler says. Appeagle’s clients sell a wide range of products, including consumer electronics, art work and firearm accessories.
The glitch stemmed from Appeagle’s attempt to quickly update software that controls how its clients set prices on e-marketplaces, Mehler says. “A small but impactful bug was caused because we pushed an update faster than we should have,” he says.
For the past several years, Appeagle has used a software application programming interface from Amazon to pull information such as sales volume and sale prices from Amazon.com, then update clients’ retail prices based on the profiles its clients set in order to sell the most products at the best price. If other merchants are selling high volumes of goods in a client’s product category, for example, it can use Appeagle’s software to automatically lower prices and stay competitive.
But as part of a project to update how sales and pricing data are managed through Amazon’s Marketplace Web Services, Appeagle didn’t test thoroughly enough to see if prices were being set accurately, Mehler says. As a result, about 5% of Appeagle’s clients, or fewer than 100, did not have their minimum and maximum price levels properly set, causing their prices to fall to one cent.
“We should have tested more thoroughly, and in the future we’re going to conduct far more vigorous tests,” Mehler says.
The faulty pricing impacted a smaller number of clients on Buy.com, Mehler says. He didn’t provide further details about what caused the problem on that e-marketplace other than that it was related to the process of updating software.
Buy.com is No. 36 and Amazon is No. 1 in the Internet Retailer Top 500.