[newsclues]

"This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+."

Is this not just a market effect of saturating the market with competition because suddenly running a business is comparatively easy (communications technology, platforms and existing logistics and production networks) to any other era.

I can probably start a company drop shipping crap on Amazon in a short amount of time with a smartphone from my bedroom. The barrier to entry has dropped, rather quickly.

[berniedurfee]

Very similar to the music industry, where technology has made producing music so easy the market is growing by tens of millions of new songs every year.

The slices of pie are getting very thin indeed. Especially when there are only a few pie delivery services to choose from and they take their slice first.

[deepsun]

In efficient market every business must have razor-thin margins, otherwise competitors squeeze into it.

Good fat margins are a result of an ineffective market.

[hnlmorg]

So Amazon making good fat margins on every small business that sells on Amazon is demonstration of an ineffective market. And hence why the FTC are stepping in.

[hellojesus]

What? Amazon is offering lower prices to consumers, which is why they're winning business.

If other competitors could get their costs as low or lower than Amazon's, then they could enjoy those margins themselves.

[hnlmorg]

I cannot speak for every location, but Amazon isn’t the cheapest in the UK. I would say it is about average.

Where Amazon wins is the range of stock and its next day deliveries. Which means most people default to Amazon because it’s quicker and easier than shopping around. But you can definitely get cheaper if you were to shop around.

Also by Amazon owning the whole pipeline, from stock to delivery, they can squeeze costs down and thus improve their margins. For example, I guarantee you that other online retailers are paying more to ship their products than Amazon are.

[hellojesus]

I agree fully, but Amazon is still the "cheapest" when you consider the all in price of cost_of_goods+cost_of_delivery|want_goods_in_fewer_than_two_days.

Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created.

Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider.

[berniedurfee]

Yeah, that’s really the anti-competitive part. The vertical integration is so incredibly difficult to compete against.

At some point you have no choice but to give them a slice of your revenue and some control of your product, lest your access to customers is severely limited.

Kinda like app stores.

[deepsun]

Comparing to Apple, Amazon margins are thin.

[hnlmorg]

You’re basically comparing despots though.

[SenAnder]

Amazon inflating rates after capturing the market, permitting counterfeits, and penalizing sellers offering lower prices off-Amazon, has nothing to do with market efficiency or commoditization.

[hellojesus]

> and penalizing sellers offering lower prices off-Amazon

Why shouldn't they be allowed to do this? If you want to sell on their market, you promise not to undercut them.

Amazon exists as a discovery tool for consumers. They don't want third party sellers to get free advertising. That isn't anticompetitive.

[SenAnder]

You've explained what gives Amazon the leverage to set such terms, and why they'd want to set such terms, but you haven't explained why preventing other platforms/sellers from competing on price isn't anti-competitive - you merely asserted that it is so.

[hellojesus]

It's not anticompetitive because they aren't restricting competition off their platform. They are simply stating that to participate in their marketplace you must adhere to a set of rules.

It is no different than Nike, who requires no discounts on specific products, etc. Amazon isn't prohibiting selling on non-Amazon platforms. Amazon is prohibiting undercutting them if you choose to sell with them.

How is that anti-competitive?

[SenAnder]

> It's not anticompetitive because they aren't restricting competition off their platform.

Yes, they are. They are using their influence and market power to prevent others from competing on price, using the threat of economic retribution on their platform. If this isn't anti-competitive, then nothing short of sending assassins on your competitors is.

[hellojesus]

Nonsense. They are only able to influence your behavior if you use them. It is completely self selected.

It is the exact same thing as is argued by social media companies: they have the right to moderate the content posted on their platforms because it's their platforms. You can do whatever you want on your own site.

[starluz]

Not saying it’s right but this has been their business model from day one back when it was just books

[midoridensha]

There should be some tough laws against selling counterfeits, with harsh penalties.

[reuben364]

Simultaneously, there must be harsh penalties for abusing that system. See Samsung's use of a patent on display technology to label third party displays as counterfeits, despite not using that patent nor misrepresenting themselves as Samsung screens.

https://www.youtube.com/watch?v=A002AesVaFk

[xphilter]

Running a business being easy is limited to these low-value drop-ship businesses. Running an actual business is hard. What they’re doing is just arbitrage: buying in bulk from Ali Baba and selling individually on Amazon. No value would be lost if these companies went away. Compare that to a bookstore or cafe being closed in your town.