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by draz
4518 days ago
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I have mixed feeling about this. Although Amazon is one of my favorite companies with great customer service, I am asking myself whether the day will come where they'll eat up all the competition, make the cost of entry to any domain prohibitive (by negotiating great distribution deals for themselves -- deals that no one else can strike), and then raising the prices. Just to be clear: if Amazon can buy a pencil at 1c due to bulk orders, and everyone else can only get it at 3c (due to smaller volumes of sales), Amazon could sell it for 3c, make profit, and still not allow anyone else into the market.
As a consumer, what do I care, right? I'm always getting the lowest price. But as an entrepreneur and someone who wants to see things get better, it's an issue if no one else can "disrupt" the market in a financially responsible way ( <-- and I'm specifically phrasing it this way because I think it's in mode these days to get a lot of VC money to "scale," and worry about profit later. I find it hard to believe that with just VC money anyone could "scale" to Amazon's dimensions). |
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If, on the other hand, they use their monopoly position to illegally crush everyone else, then raise prices until the next time they have to crush someone, you have an antitrust case. And note that there's already more than a whiff of accusations about the former going on, that they are using Amazon stock price to power a market domination move which they will then use to monopolize and extract rent. It's a bit hypothetical at the moment, but it's not as if nobody's looking for this to occur.
Amazon's stock price is, IMHO, pretty clearly predicated on the "crush all opposition than extract rent" model being what the market expects to see, incidentally. Stay tuned.