[conjecTech]

I have been fascinated by the price of oats recently. The 8lb box of oats I have been buying from Amazon for several years suddenly went from $15 to $32 in July. Paying $4/lb for grain feels excessive given that meat is cheaper than that in most of the country. I went looking for an explanation expecting there to been some huge crop loss, but found oat future prices have been relatively stable at around $0.15/lb. I looked at other prices, and whole foods even charges $3.6/lb for their store brand and something like $2.5/lb for bulk goods. I distinctly remember buying the same bulk oats for $0.59/lb in 2017, right around the time Amazon bought whole foods. And oat futures prices are only up about 30% since then.

I think retailers would like us to believe these increases are just them passing through rising commodity prices from inflation, but I am increasingly convinced it is collusion, either implicit or explicit, to increase margins. The most compelling evidence this is happening seems to be Costco, which generally sets its prices at near-fixed 15% markup hasn't experienced nearly the same increases and is selling similar products at less than half of that price.

I think the entire thing is indicative of a growing disconnect between the cost of commodities and what consumers are paying due to increased consolidation and collusion among retailers.

[edmundsauto]

This may be due to how Amazon's "stock" works. Was it for sale by Amazon or a 3rd party?

I have a(n unsupported) theory that gung-ho retailers try out amazon from time to time, in an effort to expand. Maybe they hire someone who knows how to sell there. They price based on how they do in store, then after a few months do a reconciliation and realize how much money they lose due to amazon's ads/stocking/shipping costs. Then they raise prices.

Each time this happens, you see massive fluctuations upwards as they have to cover their cost + amazon's charges. Then a competitor gets a new ecomm/marketing/growth person who sees an "opportunity" because all the competition has priced things way too high. That person pitches leadership on how they can sell more items without much more effort ("thanks Jeff Bezos!"), but the actual understanding of how much it costs doesn't come until a couple of months later.

[conjecTech]

Its sold by amazon.

[dcchambers]

It also doesn't really make any sense to buy a cheap pantry staple or cereal grain like oats online and have it shipped to you. The base product is so cheap but it's heavy so traditional consumer shipping is expensive (and wasteful/bad for the environment).

There's a very good chance much of that price increase is due to increase cost of shipping. Even if Amazon gives you "free" shipping - they're building that price into the price of the product... They're not eating the shipping cost on a low margin item like a cereal grain.

I can buy organic locally grown oats at my expensive local health food co-op for less than $2/lb...unchanged from years ago.

[conjecTech]

Deliveries of any reasonable size reduce vehicle miles travelled for goods. If a delivery driver can do 50 deliveries in a 10 mile route, that is much, much better than each one of those people driving to the store and back. I live in Brooklyn and Amazon has a grocery logistics hub less 5 miles from me. My carbon footprint is just fine.

[lotsofpulp]

Amazon pricing is not a reliable source of changes in cost of goods sold, especially if not shipped and sold by Amazon. Plus you are pricing in home delivery.

I would use a retailer known to keep margins as low as possible like Costco as a better gauge. I buy rolled oats all the time, and between Costco and Trader Joe’s, I have not noticed any pricing swings in oats.

[conjecTech]

Agreed Amazon isnt the most reliable, but as I said, I corroborated this at a few other stores. Costco generally has fixed markups for its products (15%), as does Trader Joes. The fact that you haven't seen price fluctuations there aligns with my conclusion that the price volatility isnt being driven by increases in the cost of goods, but rather retailers who think they can trying to increase margins.

[vikingerik]

Don't put too much stock in just one Amazon listing. That doesn't reflect reality. Amazon listings fluctuate in price all the time. Maybe some algorithm decided to bump that one listing in hopes that regular orderers would keep buying it out of inertia.