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by cryptica
2513 days ago
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Amazon could drive companies within entire product sectors to bankruptcy simply by lowering the price of that product category on Amazon. The problem is that they can afford to do this in a sustainable way because they have so many other product lines. When other big chains like Walmart do similar things, it does not have the same effect because people don't go to Walmart to buy just one item. Amazon is different; if they lower the price of an item, consumers react quickly and that can put other websites which specialize in that item out of business. Then when all major competitors within the item category are out of business, Amazon can increase the price to any amount it wants and use the extra proceeds to continue the process with different item categories. |
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Selling below cost can be illegal dumping. But do you have any evidence that they're actually doing that, rather than them merely negotiating a better price for it than you and then selling it with thin (rather than negative) margins?
> Then when all major competitors within the item category are out of business, Amazon can increase the price to any amount it wants
Notice that this only works if nobody is willing to reenter the market when the price increases, which is rarely the case. Otherwise they have to maintain the lower prices forever.