[philipkglass]

Regarding Amazon, I seem to recall reading similar accusations leveled at Wal-Mart around the turn of the millennium. Their low prices were going to destroy local small retail businesses, then they'd reap monopoly profits after the competition died.

It looks like the first thing happened but the second didn't. Prices might have rebounded a bit at a Wal-Mart after their initial arrival in a community, but they didn't rebound enough to match (much less surpass) the old prices of Bob's Local Hardware Store or Alice's Wine and Spirits.

It's hard to tell if Amazon's retail aim is genuinely predatory the way the author accuses it, or if Amazon's just planning to legitimately, sustainably live with lower margins than other retailers, by dint of huge scale and long term cost-containment efforts. They're investing in roboticized warehouses and have no brick-and-mortar retail locations apart from Whole Foods.

[PenguinCoder]

Thing is, the profit margin is still there or even greater for Wal-Mart than 'Bobs Local Hardware Store'. Wal-Mart items are generally poor quality (cheaper) and they are notorious for bullying manufacturers and distributors for meeting a target price. They often win in these cases, which keeps their prices lower. But make no mistake, some of the cheaper items are not the same items you would get from even another big box retailer, let alone the mom and pops that used to be in business.

[skybrian]

Yes, I've read elsewhere that they're often not the same items. Whether this is good or bad for consumers is hard to say. Are the corners being cut things that their customers care about? If the customers are happy with what they get, the lower price is a win, and Walmart is right to encourage their suppliers to economize where they can.

Of course, there are also places where quality shouldn't be cut, and other side-effects of the drive to lower prices (lower pay for workers, etc). But this still seems like a subjective judgment call to be made on a case-by-case basis, not an obvious black-and-white issue.

[dsfyu404ed]

It's not as simple as making caveman noises and saying "China junk bad" there's economic forces at play that dictate what does or doesn't go on a store shelf. Consumers usually want the cheapest. When everything is coming from the same five factories in China whoever has some other advantage (like economics of scale, lack or morals, etc) will be able to sell at the lowest price while still making a profit.

Most of the cheap stuff on the bottom shelf at $LocalStore can also be bought at Walmart. The difference is that at more specialized stores you have options other than "value-priced" and big box stores tend to have house branded products that are as cheap or slightly cheaper than the cheapest thing at a specialized store.

I can go to my hardware store and get Lenox blades for my reciprocating saw or I can get Black and Decker. I might or might not be able to get the lowest end product line from a reputable brand or some Chinese re-brand that's an unlicensed copy of said lowest end product line. At Walmart I can only get whatever the cheapest product line Black and Decker is because that's not their specialty.

In cases where there only consumer options available are the "value priced" options there's no difference. The one tube cutter you can buy at your local hardware store is going to be the same one you can buy at Walmart, Harbor Freight, or from an eBay drop shipper. If you want a Reed, Rigid or some other "professional" brand you'll have to go to somewhere else. If your local hardware store specializes in plumbing or HVAC you might find one but I wouldn't count on it.

[TheAceOfHearts]

There's still value in having local shops where you can just go and pick up whatever you need immediately, which is why I frequently buy stuff from Fry's rather than Amazon. Although it does help that they do price matching, so you can be certain you're getting the lowest price.