[BizarroLand]

Amazon is basically allowing sellers to carry all the risk while product testing and marketing a product.

If it does well enough, Amazon can use the same manufacturer and release a branded "Amazon Basics" version that pops up in the same search for the same product but cheaper as Amazon doesn't have to pay someone else $112 for the listing and warehousing, and the original seller that did all of the actual "work" (as far as making it a profitable venture) is SOL.

Throw in a few dozen word salad named drop shippers who undercut Amazon in exchange for increased shipping times and the originator is wedged out of the market or cut to razor thin margins for years of effort.

Rinse and repeat.

[highwaylights]

Yes, but the argument is that drop-shippers aren’t really producing any value.

It’s not like they’re putting banners over their product pics saying “hey, you know you can buy this exact same product for like half the price on alibaba if you’re willing to wait a couple more weeks for it right?”.

I don’t like Amazon consolidating this much power either but if they can push you out of your business that easily you weren’t the critical component of it.

[BizarroLand]

Show me a business that Amazon couldn't destroy just for kicks.

Also, it's not like you have any choices. If you manufacture your products yourself, you have to fund a massive venture to handle the workload. If you outsource the products, then the companies you pay to manufacture your stuff can easily make knockoffs and then let drop shippers undercut you with inferior versions of your own products.

Look at a lot of the stuff for sale on Temu for instance. There are hundreds if not thousands of products that were invented, tested, and designed by Western companies that you can now buy a reasonable facsimile of on Temu for a quarter of the price.

This includes art work, enamel pins, battery packs, woodworking tools.

You're on a hard path either way, but if you make it to the point where you have a standout product knowing that at the final step Amazon can easily step in and price you out of existence, even if they had to take a loss on it just to destroy you, they could and there's not a damn thing you can do about it.

That should be broken up. Monopolies are bad. Monopsonies are bad. They are bad for the country, bad for the people, and bad for the flow of money.

I hope we see record fines against them and that everyone affected by this gets to be part of an earth shattering nuclear verdict.

[danielmarkbruce]

Apple Iphone, airpods, ipad, macbook. Google search. Coke. Boeing. Caterpillar. Goldman Sachs. AirBnB. Exxon. AutoDesk. BlackRock. CME. Costco. JP Morgan Chase. Mastercard, Visa, Nike, TSMC and a thousand others.

They started out as a retailer, and opened up a bunch of their infrastructure to competitors. The idea that they'd make it easy for competitors using their infrastructure to beat them makes zero sense.

[thghtihadanacct]

Those are good ones but i was thinking of local stuff like grocery (which they tried and are currently failing) and gas (not that i use it). Also, real services like plumbing, electric, vehicle maint. ... Angies list got that corner ;)

[danielmarkbruce]

The list is extremely long as you say. Amazon isn't good at much except cheap third party stuff made by contract manufacturers in china, books, and AWS.

[BizarroLand]

Most people responded by providing a logical response to my argument while discarding the semantics.

Semantically, what company that (Relies on Amazon to operate) couldn't they destroy on a whim?

[danielmarkbruce]

That's pretty circular. To the extent any company, A, relies on company B to operate, A can be destroyed by B, according the definition of "rely".

So the logical response wasn't to assume you were being circular. The logical response was to assume you were inferring Amazon is big enough and capable enough to squash any business.

[BizarroLand]

And yet it is obvious in retrospect that I didn't mean entirely independent multi-billion dollar empires, but that is the response everyone went with.

[eru]

How did Goldman Sachs '[start] out as a retailer, and opened up a bunch of their infrastructure to competitors'? Or am I misunderstanding you?

[whoknew1122]

The 'they' here is Amazon. This is how it should be read: "Amazon started out as a retailer, and opened up a bunch of their infrastructure to competitors. The idea that they'd make it easy for competitors using their infrastructure to beat them makes zero sense.

[danielmarkbruce]

Bad use of pronouns on my part. As another comment pointed out, I should have written "Amazon".

[eru]

OK, that makes a lot more sense. Thanks.

[8note]

I don't think Amazon could destroy apple or Walmart just for kicks.

Aramco? Air Canada? Samsung? Memory Express? Digikey? McMaster Carr? McDonald's? The Big R? Cantillion? Texas Instruments?

"Show me a business" is quite vague

[berniedurfee]

Why not McMaster Carr or even Digikey?

I’m sure Amazon has put a sizable dent in their sales without even really trying.

Amazon now has special search tools for buying fasteners that make it easier to find exactly what you need.

Prices are cheap, risk is high, but prices are cheap.

[lostapathy]

> Amazon now has special search tools for buying fasteners that make it easier to find exactly what you need

Easier but they are no McMaster, by a long shot.

[callalex]

I have a lot of friends in the manufacturing business that range from self-employed to military-backed conglomerates. None of them use this tool. Are they all Luddite idiots, or is this Amazon search tool, backed by their swiss-cheese supply chain, just not that useful?

[exar0815]

Every cent Digikey looses they loose by being Digikey. Of all large suppliers, they are by country miles the worst and we try everything to avoid them. Farnell, Mouser, LCSC beat them handily. And their pages are already bad.

[tonyarkles]

Wow! I have had nothing but amazing experiences with DK over the last 20 years, especially compared to everyone else. Maybe it has to do with being in Canada, though. The DK warehouse is just across the border and when you order DDP I think they bring your stuff over by truck and then distribute it. Have not once ever had a surprise customs charge from them, while other suppliers have all screwed me in one way or another (lol always great when one order gets split into three boxes and UPS charges brokerage fees separately on each one)

[fshbbdssbbgdd]

It’s not connecting for me how breaking up monopolies is going to stop Chinese clones of Western products from winning price wars. It might change how the margin gets carved up between the people who make the clones and various middlemen but how would it stop the overall trend of cloned products?

[adaptbrian]

It's all about discoverability, you wouldn't find them, tree falling in the woods, no one is around. Does it make a sound?

[fshbbdssbbgdd]

I would expect if Amazon disappeared, since people can’t go there to search for products to buy anymore, they’d use Google instead, or some other product search aggregator sites. They’d presumably still list the cheap sellers first (or whoever pays for an ad slot). That would be a huge change in the e-commerce industry, FTC can argue it benefits consumers because the prices of everything will be cheaper without Amazon’s fees, but I’m not seeing how to reduces the prevalence of cloned products.

[eru]

We should encourage more price wars. They are good for customers.

[chii]

Except once the price war is over, the consolidation of market share to one or a few players means that there is a good chance of monopoly pricing.

Unless, if the price wars are never over.

[eru]

> Except once the price war is over, the consolidation of market share to one or a few players means that there is a good chance of monopoly pricing.

Almost never happens like that.

[zdragnar]

According to Amazon's rebuttal to the charges, 80% of all retail is still brick-and-mortar. Amazon has tried it a few times, but remains essentially an online only service.

If your business depends on potential competitors for it's existence, then being eventually forced out seems like a pretty natural conclusion.

[gmd63]

We're reaching the point in the economy where racing to the lowest cost, such as Temu, comes with great damage to the world. It's spyware that collects data on the american consumer across applications, and the products are made with illegal forced labor.

If people keep choosing to reward dishonest cheaters and criminals just to get something for lower cost, we are not in a good place. And either cheating or disguising the true nature of your company is becoming the easiest way to stand out in a commoditized world.

More important than how you vote is how you buy.

[pyrale]

> if they can push you out of your business that easily you weren’t the critical component of it.

Alternative suggestion: modern monopolistic corporations are disproportionately powerful. If they can topple a country to sell bananas cheaper, they sure as hell can kill a small business, no matter how relevant that business is.

[desert_rue]

These aren’t drop shippers. They are importing the product and paying to store that product before a sale is made. The shop is taking on a risk that the inventory won’t sell, and the customer gets the product far faster.

[abduhl]

What’s the problem here? If you don’t have a durable competitive advantage then you’re going to get eaten up. First movers should not get a license to continue to reap a profit in a competitive market absent real innovation, which would come in the form of reputation (trademark) or technology (patent). Drop shippers who can be displaced by Amazon in the way you discuss have neither. They already made a profit on the front end, so don’t feel bad for them just because they can’t continue to rent-seek.

[letsdothisagain]

The anti-competitive bit is they have all the sales information that would typically be a trade secret for a company.

Go ahead, call up your local 7-11 and ask them what their sales were for the quarter. They'll tell you to fuck off.

[abduhl]

But Amazon is the 7-11 (and more)! It is the customer facing part of the business that houses and delivers the beef jerky to the ultimate customer. 7-11 sees that jerky sells, that lots of brands can sell jerky, that consumers don’t seem to care about the brand of jerky as long as it says teriyaki, and so 7-11 now sells 7-11 basics teriyaki jerky.

The FBA middlemen are more like traveling salesmen - they take an order, send it in to HQ, and HQ ships it to the 7-11. They don’t do anything but take orders. They are Tom Smykowski - they take the plans to the engineers!

You’re complaining that the storefront that the goods are sold through has its own sales information. The amount of sales you have through Amazon may be a trade secret, but it is not a trade secret from Amazon.

[havnagiggle]

If we're coming up with brick and mortar analogies, it's got to be grocery stores and generic branded items. Kraft Mac vs Great Value.

It's hard for me to say Amazon shouldn't be able to do it while every grocery store can, but there seems to be a quantitative difference because of the ridiculous number of options online vs the finite shelf space of a brick and mortar.

All the same economic games are played. Items are placed on specific shelves to drive specific sales, etc. Sale numbers are known by the store and they get their cut.

The distinguisher is supposed to be in the quality. Premium vs generic. That doesn't seem to play out healthily in Amazon's marketplace.

Maybe one difference is the consumable nature of the grocery products vs what one typically buys online (Amazon batteries as opposed to an animal carrier). Or maybe we have given up too much with the consolidation of grocery chains the last few decades and that is equally problematic.

[LeonB]

I think that a lot of the same problems exist in generic brands at supermarkets. Supermarkets already have a lot of ways to pressure suppliers, and “own brand” products are weaponised extensively.

I’m all in favor of suppliers competing with each other, as that’s in the best interests of society overall. But when the platforms/marketplaces themselves participate in that competition they have tremendous advantages, which is anti-competitive, and it benefits no one but themselves.

[jtbayly]

But Amazon refuses to be the actual seller taking the risk in the first place. They aren’t buying jerky from anybody and then selling it. Until they decide to make their own based on the actual seller’s data.

[ipaddr]

But should barr them from selling a line of similar products.

[cowsandmilk]

Your local grocery store has store brands that compete with the name brands. Your local grocery store also charges for shelf placement.

Amazon is actually more open than other stores about this information, giving product rankings so that you could decide to knock off popular products too.

[BizarroLand]

Except that overlooks Amazons intentionally messed up search function. Amazon, unlike grocery stores, doesn't really put all of the items into the same location.

On amazon, if you want to browse "electric bike tires with motors" you will have to browse through dozens of full electric bikes, electric scooters, hoverboards, tires without motors, tricycles, and all sorts of close but not quite what you're looking for items to find 1 that you might be interested in.

Want to price shop them? Good luck finding others to compare with.

It would be like looking for a 5 lb bag of white sugar in the grocery store so you go to the sugar isle and finding 1 half pound bag of brown sugar amongst all of the flour and seasonings and honey and agave nectar and sweet n low in the first 100 feet.

Any grocery store organized like that would fail and be replaced by a company with decent organizational flow.

But amazon makes money by charging the vendors on its market for visibility, in addition to listing fees, storage fees, and whatever else.

Amazon has a perverse incentive to not show you, the customer, what you are looking for when there is anything else close enough to what you are looking for that they will make more money for selling to you.

There isn't a better word than evil for this, even if it is the benign sort of evil that only added to the chaos and misery of the world without directly harming anyone.

[hellojesus]

Also, in direct response to the Gp, grocery stores buy sales data that contains their sales + their direct competitors down to the product level. It is anonymoized but freely available.

Edit: Also companies like Google scan emails for information. Amazon stopped including prices in their emails because Google was getting a direction stream of sales data with full costing info.

[ameister14]

They aren't being eaten because of innovation, they are being eaten because of monopolization.

[trogdor]

The person you are responding to was saying that dropshippers are being eaten because the products they are selling lack innovation.

For example, Amazon cannot swoop in and sell a cheaper Amazon Basics version of a product to which you own a critical patent.

[ameister14]

I'm aware.

They are really saying, though, that without barriers to entry and in a competitive market, players that don't innovate don't survive.

>First movers should not get a license to continue to reap a profit in a competitive market absent real innovation, which would come in the form of reputation (trademark) or technology (patent).

The problem with that is that this is not a competitive market, so the player that wins is not innovating, they just have market power because of their size.

[hellojesus]

But that is definitionly winning the competitive market. Amazon has a competitive advantage because they have the largest inventory and almost always the cheapest prices, or at least speedy delivery for a marginally increased cost.

That is the definition of winning a competitive market. The consumers win.

[ameister14]

The FTC is arguing that Amazon is actually raising prices, so no, consumers don't win.

You don't need to have lower prices long term if you control the market.

[berniedurfee]

But they do, right? At the very least they turn a blind eye to the countless counterfeiters.

[BizarroLand]

The problem is being both the platform and a competitor.

They have an inside advantage that no one else on the planet outside of ebay and Alibaba (and its ilk) have.

It entrenches them and enriches them unjustly. They make profit off of their competitors and have the option of destroying anyone who rubs them the wrong way without repercussion. The capitalistic market cannot speak on the matter as there is a monoposonistic gatekeeper on the market path.

[danielmarkbruce]

They started out as the competitor. They have always been that. They opened up their capabilities to competitors. They didn't have to.

[BizarroLand]

They didn't open their capabilities to competitors. That is completely false.

No one who sells on Amazon is a competitor. If you are selling on Amazon you are a customer, and every once in a while, Amazon comes in and starts selling your goods for less than you can because they decided they would make more money without you in the picture.

For a little proof, try to find Ammoon products on Amazon. They used to be everywhere. And the information isn't exactly public but there was a falling out between Ammoon and Amazon and now you can't buy Ammoon products on Amazon, but you can find Lekato and Sumimma and Joyo and Cuvave knock offs of the exact same products, and not long after this happened, Amazon started selling cheap guitar pedals under their Amazon Basics brand.

You may say, sure, whatever, but the primary product Ammoon sold was the cheapest ($35) looper pedal on the market.

Amazon undercut that price (to $26.50) and also booted their closest competitor and biggest customer in the guitar pedal looper segment.

Who would defend that kind of scummy action?

[danielmarkbruce]

In an enormous number of cases Amazon both sells products and the same exact product from a different supplier, and they sold the product before opening up the store to others. That's the definition of a competitor.

The fact that they didn't sell every single product on planet earth doesn't mean they aren't a competitor. They are practically in the "easy to manufacture by a third party in china consumer products" market. If a company adds so little value that Amazon's 5th rate people (The best minds at Amazon aren't sitting up at night worrying about the guitar pedal looper market) can beat them, they aren't adding value. And, one single distribution channel (the amazon website) doesn't define a market (with almost zero exceptions, amazon's website not being one).

[chii]

> And, one single distribution channel (the amazon website) doesn't define a market (with almost zero exceptions, amazon's website not being one).

if amazon captures a large ratio of people buying goods online, i would certainly consider amazon itself a market. But unless they also control some other aspect of the online market, it would be hard to claim they're a monopoly tbh.

_Anyone_ can setup an e-commerce site and sell online. Amazon doesn't quite fully control the hosting, IP and backend servers completely!

[jupp0r]

Where's the harm for consumers here? All I see is that I can now buy guitar pedals for a fraction of the price. Isn't consumer harm the point of anti trust?

[BizarroLand]

Shortsightedness is the harm.

How many companies will not enter the market because of Amazon's monopoly? How many products will never get invented because of the awareness of the system?

And even with this, with a monopoly it is not a race to the bottom. Once the monopoly is in place, you can raise the costs to whatever you want and the market has no choice but to grin and bear it or go without.

Monopolies are never good for the consumer.

[LeonB]

Amazon is the rent seeker here.

[neycoda]

The whole Amazon Basics thing, cannibalizing sellers, should be illegal. It just victimizes people trying to make a living in a crap job market where online sales are closing street shops.

[hellojesus]

How does it victimize people?

Sellers are offering a generic product without barriers to entry like trademark, patents. Somebody else notices and contracts the same manufacturer to produce it or finds someone else who will (or makes it themselves). The new entrant sells it for cheaper.

All I see is basic economics. Business cannot stay afloat if their marginal cost exceeds marginal revenue. This is the best outcome for consumers.

[BizarroLand]

Are business owners not people?

[hellojesus]

Clearly I included one too many words:

How does it victimize?

[desert_rue]

The business takes a risk in developing and acquiring a product and Amazon uses the sales data and its platform to pick out winning products and undercut the price. The business is the victim.

[hellojesus]

The business should protect their product with a patent or other trademark then. Nobody is forcing people to provide Amazon data by selling products on Amazon.

There is no victimhood if the business voluntarily transacts.