[jimmywanger]

Amazon does something even more insidious. Apparently if you're selling a cable or something and doing really well, Amazon will come out with a generic version of that which is cheaper, and they will be able to undercut your prices.

Basically, they're letting you validate the market and then jumping in once you've taken the risk and created the market.

[JonathonW]

This is pretty common in retail and predates Amazon (or even online shopping in general)-- for example, Kroger has Kroger-branded groceries; Best Buy has Dynex, Rocketfish, and Insignia for consumer electronics; Costco has Kirkland Signature everything.

Generics and private label brands are big business, especially in industries where consumers aren't brand sensitive (does anyone actually buy on-brand Motrin or Advil?). It's completely understandable that Amazon would want on that particular gravy train.

[reaperducer]

Amazon Basics rechargeable batteries actually have higher capacities than their name-brand competitors.

I saw Amazon Basics pants last night. But there's some places even I won't go.

[dazc]

Every supermarket chain in the UK does this to a greater or lesser extent, sometimes it's hard to distinguish the original packaging from the copy.

There is a German supermarket chain who take the concept to its absolute limit, basing their entire business model on it.

[jamiethompson]

Lidl and Aldi?

[thisisit]

> Amazon does something even more insidious.

> Basically, they're letting you validate the market and then jumping in once you've taken the risk and created the market.

I am not trying to defend Amazon but they also cut down the customer acquisition costs someone validating the market has to incur. So, it is now become a toss up between initial costs of finding and validating the market vs Amazon taking the sales data entering in direct competition. Which is better?

[singron]

Can't any company do that?

[jimmywanger]

Not every company has access to your sales numbers and revenue on those sales. They know very well how much revenue you're bringing in, it's child's play to them to price out your product and see that if their amazing supply chain network can undercut you while they still make a profit or break even just to increase market share.

Plus, if you're doing "fulfilled by Amazon" they know you're paying an extra 30% on your cost of goods for fulfillment. They can price all that in and figure out if they can sell it for cheaper, also fulfilled by Amazon.

[whamlastxmas]

You don't need inside access to numbers to do your own math and see if you can undercut someone else

[jimmywanger]

But when you have actual sales numbers and you already know what they're paying for fulfillment (fulfilled by Amazon) you can do way better math.

"He's selling 10k of these a day at 20 bucks, and he's giving us six bucks per sale. Can we sell the same thing at 15 bucks? Then it'll sell better and rank higher in the search results"

[Spivak]

I'm failing to see a problem with this. You're literally selling goods in someone else's store. Is it also a problem when grocery stores undercut and prominently feature their own brands?