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Amazon Is a Monopoly

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Re: Amazon Is a Monopoly

#311

Post by metalliqaz »

turc1656 wrote: post #282

Solid interview. But one thing I saw that was missing was that Amazon also doesn't charge itself the 15% marketplace fee (it varies slightly depending on category but most are 15%) that it charges 3rd party sellers. Since Amazon directly sells tens of millions of items, it had at least a 15% head start on every single one of those products in terms of price competition. Since we're talking retail here, the margins on…

Amazon doesn't have to pay the 15%, but they DO have to pay for the massive web infrastructure of their retail storefront and for the massive order fulfillment infrastructure.

Re: Amazon Is a Monopoly

#312

Post by c0vfefe »

arkh wrote: post #229
Alupis wrote: post #121

Earlier quoted context omitted.

Is that really still an option the bigger Amazon gets? At what point is it a defacto monopoly? A huge share of people shop exclusively on Amazon, particularly when compared to 10 years ago. There's no sign it'll stop growing any time soon. Choosing not to, or being prohibited from selling on Amazon effectively blocks you out of a significant share of ecommerce sales. There's no way around that.

> A huge share of people shop exclusively on Amazon People should ask why. Is it the prices? No. Is it the discoverability? No. It's because when you have a problem with whatever you bought you get reimbursed. No "call Samsung hotline", no "we'll add this totally not free warranty package in your cart".

Anecdotally, I'd say yes, it's mostly the discoverability, plus things like Prime shipping, reviews, the generally good UI, etc.

Re: Amazon Is a Monopoly

#313

Post by calimac »

5trokerac3 wrote: post #271
blairanderson wrote: post #120

I run a consulting company for Amazon suppliers. We have roughly 2-dozen Amazon suppliers and our first-hand experience is that Amazon is absolutely stifling competition/business to the detriment of customer. The biggest problem is `agreements that restrain trade` is a monopoly practice that happens across the board. They're a black box AND have tiny support systems for their marketplace. One recent example. A client…

> A client was on track to be selling $X-million this year of some appliances. Our client was forced to to stop selling because of trump tariffs. Amazon won't accept a "higher price" from our little company that only sells $Xm/year. A devil's advocate view: perhaps the supplier was buying low cost appliances from China, built in factories with who knows what labor standards or whether the work was compulsory, made al…

There goes another hypothetical... BEWARE anytime a rebuttal post started with “perhaps”.

Re: Amazon Is a Monopoly

#314

Post by nradov »

whatshisface wrote: post #262
nradov wrote: post #253

Earlier quoted context omitted.

The manufacturing cost for DVDs is close to zero so sellers have room to cut prices. They aren't comparable to appliances.

Licencing and content production cost money, though.

Those are sunk costs for any production by the time you get to selling retail DVDs.

Re: Amazon Is a Monopoly

#315

Post by throwawayor624 »

angstrom wrote: post #263
dylan604 wrote: post #170

Earlier quoted context omitted.

Exactly this. I've worked for a company where Walmart was the largest retailer for their product (DVDs). They were constantly being beat up to lower their wholesale prices while also demanding a separate SKU with edited content. Amazon is no different in this case (except not demanding edited content). Whenever I asked about this, they said you still had to provide product for sale wherever the customers were. The la…

I’ve worked for Amazon. The thing you have to remember on the retail side is much of the focus is on CP (contribution profit) and much of analysis has to do with finding the largest negative CP products in different marketplaces and pulling levers to make them less negative. There’s a large number of negative CP items carried just because it improves customer selection which helps drive larger cart orders. I never he…

Grocery stores have been doing this for decades.

"Our milk supply expires at the end of the week? 50% off!"

And then they raise the price of eggs, bread, peanut butter, and other frequently purchased items by 5 cents each.

Re: Amazon Is a Monopoly

#316

Post by __jal »

kevinsundar wrote: post #171
__jal wrote: post #141

Earlier quoted context omitted.

> why shouldn't Amazon be allowed Antitrust law used to address this. Monopolies are not allowed to do things that non-monopolies are allowed to do, because the effects of monopolies doing them are different than the effects of non-monopolies doing it. Of course, Bork rewrote monopoly policy in a way that opens the door to exactly the sort of monopolies we now have. But it isn't as if this is some new notion invented…

Monopolies weren't allowed to do things that non-monopolies are allowed to do because they would have an outsized ability to harm consumers as a monopoly. But Amazon has repeatedly shown that it isn't harming consumers. In fact, it's pushed other retailers to better the customer experience or go out of business. Should a company be split up just because it's doing its customers good and got too big because... they're…

That is a reasonable restatement of parts of the Bork doctrine, yes.

Suffice to say this is a recent legal innovation, and many, many people believe ignoring other monopoly effects is myopic.

Re: Amazon Is a Monopoly

#317

Post by stcredzero »

DenisM wrote: post #119
stcredzero wrote: post #84

being a monopoly on its own is not illegal under the antitrust laws. Illegal monopolization requires both 1) monopoly power and 2) that the firm acquired, enhanced, or maintained that power by using exclusionary conduct. Exclusionary conduct includes things like predatory pricing, exclusive agreements, refusing to deal with a company, most-favored nation clauses, designing your product or service in a way that exclud…

A company that has a monopoly has to follow more rules than other companies because it can do more damage. Certain kind of moat-building is severely restricted for them, such as exclusive contracts or deliberate technology lock-in, while other methods are still legal, such as brand recognition or a rich partner ecosystem or simply a superior product. >Apple guilty of refusing to deal with certain companies Apple does…

Apple does not have anywhere near a monopoly in any of the markets they are in [+], hence the anti-trust rules do not apply to them.

Having a "moat:" All of the benefits of being a Monopoly, with none of the penalties!

Re: Amazon Is a Monopoly

#319

Post by AnthonyMouse »

headsoup wrote: post #198
AnthonyMouse wrote: post #184

Earlier quoted context omitted.

> Amazon has the power to do both. No they don't. If Amazon significantly raises prices it charges customers, or lowers prices it pays suppliers, to above/below what Walmart or a hundred others do, are the customers and suppliers going to stay with them? No. When they don't put you in their store, can they also prevent you from reaching the same customers through any other store? No. The fact that they can choose not…

You appear to be only referring to the retail side of Amazon, not the platform side where the article mentions Amazon has numerous restrictive practices in place and set the price through these by excluding competition and competing through their own retail lines, regardless of other (uncompetitive) options

Choosing how much you're willing to pay for something isn't what "control prices" means. What it means is that if you offer to sell for more or buy for less by a significant amount, that won't cause your customers or suppliers to switch to a competitor. But that is what it would do with Amazon. People would go buy and sell using Walmart or a hundred other competitors instead.

Re: Amazon Is a Monopoly

#320

Post by AnthonyMouse »

cryptica wrote: post #218
headsoup wrote: post #198

Earlier quoted context omitted.

You appear to be only referring to the retail side of Amazon, not the platform side where the article mentions Amazon has numerous restrictive practices in place and set the price through these by excluding competition and competing through their own retail lines, regardless of other (uncompetitive) options

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…

> 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.

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.

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