Why Does a Caucasian Dollhouse Cost Nearly 70% More Than an African-American Dollhouse?

If you were shopping on Amazon.com last night for a Fisher-Price “My First Dollhouse” with a Caucasian family, you would have been asked to pay $63.99:

If, however, you wanted to buy what looks to be a nearly identical “My First Dollhouse” with an African-American family, the price was only $37.99:

Amazon reviewers have taken note, and aren’t pleased:

When my son Solomon (11 years old) wandered past my computer last night as I was looking this over, he didn’t need any prompting: “That’s so racist!” he said.

Is it? What is it that we’re seeing here on Amazon — racial discrimination? Price discrimination? Neither?

When I went back to the site this morning, I saw that the Caucasian dollhouse price had fallen to $55.87:

But the shipping fee was now $7.99, for a total of $63.86. The shipping fee for the $63.99 offer was only $0.99, for a total of $64.98. So the actual price had fallen only $1.12.

But the price change reveals something more telling. The two prices were offered by two different third-party vendors: H Books and Toys and Electronics Club.

The African-American dollhouse, meanwhile, is sold directly by Amazon.

I would assume that Amazon had no intention of charging such a steep premium for the Caucasian dollhouse but by creating a third-party marketplace, has opened itself up to this kind of discrepancy.

I have a few thoughts:

1. Amazon may not even be aware of this discrepancy.

2. Perhaps Amazon had bought from Fisher-Price a certain number of Caucasian dollhouses and offered them at the same price as the African-American dollhouses but the supply ran out, with the order now deferring to a more expensive third party.

3. If Amazon isn’t aware and becomes so — or if an outcry were to arise — it may well step in to strike down the unequal pricing. I would also imagine Fisher-Price would have something to say.

4. There is evidence that white and black children both prefer white dolls. So, the controversial element notwithstanding, are we simply seeing a demand-and-price story here? 

5. I can easily see this scenario prompting a lawsuit, from someone, if only for show.

(HT: Younes Chajia)

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  1. RaqSam says:

    Well, is it racist? Then why not buying the cheap black doll house?

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  2. Chris says:

    The problem here is people (shoppers) not understanding how sales work on amazon. There are three “types” of sales on amazon. Those items sold by amazon (look at the image above on the African American dollhouse) , those sold and shipped by third party sellers (Caucasian dollhouse is sold by “h books and toys” in one image and “electronic club” in the other image, and finally third party FBA. FBA means fulfilled by amazon, in that a third part seller purchases products, labels them, and sends off to amazon for storage, picking, shipping. Amazon charges larger fees to this second group of sellers. Both of the sellers in the image do their own shipping, otherwise it would say sold by “x” and fulfilled by amazon, also the items would qualify for super saver if they were FBA.

    When an item is sold third party, the item is typically lower priced than An FBA item, but with a high “shipping and handling” fee, which can be whatever a seller wants. An FBA seller can ‘steal the buy box’ by being priced the same or lower than the combined item price and shipping fee (amazon will always give the buy box to FBA since them item will then show super saver on the listing and on the search listing page thereby increasing the probability of sale). This gets them on the front page of the listing with the single click to purchase going to the buy box winner.

    The market can flux on supply and demand, if the the sales rank is high, then high demand, but each individual seller may have a low inventory. But this only really plays out with super hot items. The reason for the ‘low invididual inventory’ is that most sellers are buying at Costco, on regular stores with coupons/clearance items. Combined a listing might have 200 items, but if the lowest rices seller has 3 left, the lists page shows three left (unless you click on other sellers). The other part of the disparity you are not accounting for is people lowering price to win the buy box. If two FBA sellers have different prices, the lower one will have the box (there are small exceptions here as amazon has an algorithm to share the buy box for prices that are within a few cents of each other).

    The last factor, and the ones that actually pertains in this case is that one item is being sold third party and one item being sold by amazon. Unlike the third party sellers, amazon picks up items at wholesale and sticks a few hundred in their warehouse, selling for somewhere around normal retail and at high volume. The other sellers purchase somewhere around normal retail and have jacked up their price to cover the item, cost of shipping to amazon, amazon sales fee, and misc costs (labels, shipping boxes, etc).

    How do third party sellers (FBA and non-FBA) make money? Three groups: impatient people who can’t be bothered to drive to the store (or the opportunity cost of them driving to the store is greater/equal to them paying double for the item); people who don’t live near major stores/shopping areas; or hot items that sell for double (search for the new leap pad on amazon, it’s selling for double retail right now, and good luck finding it at target or toysrus).

    I sell from time to time on amazon as FBA. I could do a lot more, but sales are sporadic (except toys in this season, but you have to pick the right ones), and your cash is locked up waiting on sales. Toys have a lot of flux if amazon isn’t selling the item, but once it does you have to drop your price, or at least hope amazon runs out so you show up in the buy box and can make a profit. I also have a regular job, and have yet to break in to doing it full time. You can double your money quick, or buy up the wrong item and have it sit for months unsold, in some cases dropping it to below retail just to move the inventory and avoid the long term storage fee. Haven’t found my niche yet, maybe then. I think that you have to get wholesale sources for goods to be able to really increase your profit, but enough people eek out on the margin between sale price in a box store, and 150-200% markup on their listing that it seems doable…

    Amazon FBA selling actually might be worth a podcast here, there’s some interesting stuff going on in the background. I will say that the downside is you can’t know how items are selling unless you daily track the third party sellers remaining stock, unlike eBay where you can search for the price an item has sold for. And Amazon’s customer service sides with the customer instead of the seller, which can lead to some dishonesty with buyers remorse (a seller can claim defect or not as advertised causing a refund no questions asked even though it is not the case, not a big deal as it can be dumped back into inventory most times). Look up skipmcgrath.com, he has a pretty good course on it, there are other courses but I can’t remember the names of those authors, some of the other authors focus on the back end, fixing wholesale goods or just the FBA portion.

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    • Chris says:

      Sorry for the typos on the previous post, I’m learning that typing a long comment isn’t advisable on an iPad, at least not with ‘my’ fingers… Back to the subject and to more succinctly answer the questions posed by Dubner:

      I have a few thoughts:
      “1. Amazon may not even be aware of this discrepancy.”

      Most likely a correct assumption, they only get involved if there is a problem with the actual listing, usually at the sellers request, the buyer typically only contacts amazon if there is a problem post sale (damaged good or incorrect listing/item). They let the sellers dictate the prices based on the seller’s desire to make a profit vs their desire to win the buy box and make a sale (incresing their sales if they do or have an item possibly sit in inventory if priced too high). The only thing throwing this assumption off is if a major news outlet picks up the story and blows it out of proportion, but that ‘rarely’ ever happens…

      “2. Perhaps Amazon had bought from Fisher-Price a certain number of Caucasian dollhouses and offered them at the same price as the African-American dollhouses but the supply ran out, with the order now deferring to a more expensive third party.”

      Probably, in this case they likely bought both and sold out of one, the lower price is reflected by the amount amazon set for items in inventory and their desire not to be seen doubling regular retail price (though they could for hot items) and desire to win the sale from brick and mortar stores. Unlike ebay, once an item sells out, you can’t see what the item historically sold for on amazon’s website.

      The higher price is due to a high demand toy being held by those assuming that parents would pay that cost since they are now hard to come by, the lower priced item is due to amazon currently having inventory. Starting to sound like a broken record here, sorry.

      “3. If Amazon isn’t aware and becomes so — or if an outcry were to arise — it may well step in to strike down the unequal pricing. I would also imagine Fisher-Price would have something to say.”

      doubt it, the only thing they could do is order more and stock them in the warehouse, if there are any to be had by the supplier. Once an item hits third party it is kind of like eBay, those sellers who react quickest to supply and demand will up the price to match. One thing amazon could do is just shut down the listing of the third party seller or force the item to ship back to the seller, not sure if they would do that as the products appear correctly listed and without defect (wouldn’t know for sure unless I purchased one and inspected it, so that’s obviously a guess, but is likely).

      “4. There is evidence that white and black children both prefer white dolls. So, the controversial element notwithstanding, are we simply seeing a demand-and-price story here?”

      Yup, just not for the reasons you are assuming or insinuating. Except I don’t know too many kids who do their own Christmas shopping on amazon, so I’m not sure why the first part of the question (or all the outrage) is relevant.

      “5. I can easily see this scenario prompting a lawsuit, from someone, if only for show.”

      Not sure who would get sued here…?

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  3. Derek says:

    The black family costs really close to 3/5 of the white family.

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  4. erol says:

    I don’t have kids and know very little about doll houses in general… but are there any mixed race doll houses? Maybe a lack of racial integration at the production level is a bigger issue than a 3rd party Amazon seller jacking up the price?

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  5. Stephen says:

    Amazon is innocent here, for a couple reasons.

    A) As noted, they are not the seller of both items at both prices. 3rd party sellers have a different price for one than Amazon has for the other. There are so many factors at play with different sellers being involved, that it’s hard to know where to start.

    B) The guilty party is probably all of us. As pointed out, there is a 3rd party seller offering both items at different, “racist” prices. Point #4 (That this is a supply and demand story) is right. It’s entirely possible to explain this story by pointing out that we already know from studies that white dolls are preferred even by non-white individuals, for whatever reason. More importantly, in my mind, is that to use Amazon to buy a dollhouse for your child at Christmas means a few things:

    1) You have access to a computer (more likely if you own one, which is more likely if you have money)
    2) You shop online (You are tech-savvy enough to do it, and you are financially savvy enough to either have a credit card, an online payment account, or at least a prepaid gift card)
    3) You have enough money to buy a dollhouse.

    I would say that all of these things point to wealthier-than-average individuals, which points to a whiter-than-average subset of the population interested in buying white dolls for their white kids.

    C) The interesting thing is that a very plausible scenario makes the white dolls cheaper: the supplier anticipates all of this and makes too many white dolls which ultimately requires a sale to clear inventory. Is it more “racist” if the white dolls are cheaper due to higher supplies or more expensive due to higher demand?

    Moral of the story: Make your dolls green and blue if you want to avoid racial controversies stemming from a misunderstanding of supply and demand.

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  6. Stephen says:

    I would also point out that if I was interested in this dollhouse, and Amazon was the only place to buy this dollhouse, I wouldn’t hesitate to buy the cheaper one. To me, the pricing is less interesting than the buying decision.

    I completely understand why the retailer might sell different toys for different prices since they just show up as items with different barcodes in the final analysis and the goal is to sell every item at the profit-maximizing price. The real question isn’t why the two toys might sell at different rates when they are priced the same, but why buyers are willing to pay a “race premium.”

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  7. Keni says:

    I am African American. The African-American Fisher Price item is not offered year round — or at least — is not available in most markets year round. Here’s my dilemma. I was unable to get an African American version of this product. I don’t mind a Caucasian doll for my children. I decided to just get the Caucasian version and order replacement parts for the African American dolls. Unfortunately, Fisher Price doesn’t carry the African American replacement parts for the doll — nor do any of the accessories sold for this product have African American dolls. I think that people of color are not represented well in the toy market. Check Ebay or Amazon for just the 3 little African American figurines for this item, and you’ll find them priced at close to $80 while the Caucasian counterparts are $10/$12. Here’s what’s unfair…. why should my child have to wait for a holiday to find a doll that looks like her?

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  8. RJGombach says:

    How much for the dollhouse with an interracial family?

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