Amazon scooped up data from its own sellers to launch competing products • Hacker News Board

Re: Amazon scooped up data from its own sellers to launch competing products

#61

Post by AbrahamParangi » Thu, Apr 23, 2020, 3:42 PM UTC

MichaelApproved wrote: post #25

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

It’s regulation like this that causes industry monopolies by raising the complexity of entering the space.

Outside of dealing with negative externalities, regulation is a poor-man’s trust busting anyway.

Re: Amazon scooped up data from its own sellers to launch competing products

#62

Post by jacobr1 » Thu, Apr 23, 2020, 3:43 PM UTC

annoyingnoob wrote: post #48

ses1984 wrote: post #31

Earlier quoted context omitted.

In this case it's shitty to be a supplier but isn't this great for the consumer?

No, this is not great for the consumer. It lowers the bar for everyone. What I find mostly on Amazon in the past year or so is cheaper imported versions of decent products. The decent products are hard to find or I have to look outside of Amazon. They've pushed out the quality and replaced it with higher profit junk. Its kind of the same thing with Home Depot. I used to be able to buy quality hardware from a local st…

Different problems. One is the regulation of which suppliers can distribute on a platform, deceptive advertising, right-to-repair, and similar consumer protection considerations.

The other problem the article and parent comments are describing relates to the distributor/retailer creating or sourcing generic alternatives to the items sold by their existing suppliers and informing their decisions to do so based on the sales data from their own partners/suppliers.

This latter case seems ok to me, even if it sucks for suppliers, in the sense that we generally get better outcomes for customers. As long as the general regulations for consumer protection are in-place such as preventing confusion between brands and generics.

Re: Amazon scooped up data from its own sellers to launch competing products

#63

Post by wolco » Thu, Apr 23, 2020, 3:44 PM UTC

ehnto wrote: post #18

TheKarateKid wrote: post #11

Earlier quoted context omitted.

Many Amazon sellers only sell on Amazon, or have a large majority of their business sales there. This is equivalent to having insight to almost your entire business. Most brands at Walmart and other stores are sold many other places.

There are many businesses who are 100% dependent on Amazon as a platform and Google as an acquisition stream. If you want to break out and sell on your own online platform, you're still dependent on Google, be it through search or advertising. I would love to hear of consumer facing (B2C) online businesses who are successfully operating without any Google or Amazon dependencies to see if it's even possible in the cur…

Examples of businesses operating without Amazon? Most businesses are not on Amazon or use it to clear old inventory.

Without google search in anyway? There are some ig direct marketing businesses or ebay businesses.

Re: Amazon scooped up data from its own sellers to launch competing products

#64

Post by supercanuck » Thu, Apr 23, 2020, 3:45 PM UTC

MichaelApproved wrote: post #49

ses1984 wrote: post #31

Earlier quoted context omitted.

In this case it's shitty to be a supplier but isn't this great for the consumer?

In the short term it creates competition and lower priced products. In the long term, Amazon undercuts suppliers who have to exit the market. That reduces competition and allows Amazon to charge more.

People seem to think "capitalism" produces the best results simply because of privatization, but it is the competition that is created. It doesn't matter if the one producer is Soviet Russia or Amazon, it hurts everyone in the long run when their is one supplier.

Re: Amazon scooped up data from its own sellers to launch competing products

#65

Post by erentz » Thu, Apr 23, 2020, 3:45 PM UTC

This reinforces the belief I have that antitrust regulation of online companies needs to force them to pick between being a platform or being a store (or publisher), but they're not allowed to be both.

Re: Amazon scooped up data from its own sellers to launch competing products

#66

Post by hanniabu » Thu, Apr 23, 2020, 3:45 PM UTC

MichaelApproved wrote: post #25

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

Wouldn't solve anything. They'd just split their company to be separate entities but still share all the information and operate as if nothing has changed.

Re: Amazon scooped up data from its own sellers to launch competing products

#67

Post by wpietri » Thu, Apr 23, 2020, 3:46 PM UTC

ses1984 wrote: post #31

MichaelApproved wrote: post #25

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

In this case it's shitty to be a supplier but isn't this great for the consumer?

Definitely not. Consumers are best served when you have a bunch of relatively equal players competing for their business, and where success is rewarded financially. That gives everybody an incentive to focus on continuously getting better at serving the customer through R&D, etc.

But if the reward for success is just having Amazon come in and hoover up the money you would have gotten by launching a knockoff, then suddenly there's a lot less incentive to invest in novel products. That's true both for categories where Amazon is competing and ones where it isn't currently.

I wouldn't be surprised if Amazon's replacement product is sometimes modestly worse, because a) they don't have the kind of deep expertise in a product that the original creators do, and b) it doesn't have to be as good to get the money.

And then there's after-sale support. Amazon's customer support is atrocious. The one thing they're good at is taking things back. But anything more complex and it's a nightmare.

Re: Amazon scooped up data from its own sellers to launch competing products

#68

Post by [deleted] » Thu, Apr 23, 2020, 3:46 PM UTC

MichaelApproved wrote: post #25

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

[deleted]

Re: Amazon scooped up data from its own sellers to launch competing products

#69

Post by simonw » Thu, Apr 23, 2020, 3:46 PM UTC

AbrahamParangi wrote: post #61

MichaelApproved wrote: post #25

The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.

It’s regulation like this that causes industry monopolies by raising the complexity of entering the space. Outside of dealing with negative externalities, regulation is a poor-man’s trust busting anyway.

It's possible for both of these to be true at the same time.

Regulation can help prevent harmful economic behaviour.

It can also create anti-competitive environments that protect incumbents at the expense of new entrants, often by regulatory capture.

Re: Amazon scooped up data from its own sellers to launch competing products

#70

Post by _jal » Thu, Apr 23, 2020, 3:47 PM UTC

MichaelApproved wrote: post #49

ses1984 wrote: post #31

Earlier quoted context omitted.

In this case it's shitty to be a supplier but isn't this great for the consumer?

In the short term it creates competition and lower priced products. In the long term, Amazon undercuts suppliers who have to exit the market. That reduces competition and allows Amazon to charge more.

This is a frequent trick in econ 101-style defenses of anarchic markets - play with the time horizon.

If you're hungry, a soda is "great for the consumer". For 15 minutes, it alleviates that feeling. Does it follow that everyone should consume only soda?