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Amazon’s New Competitive Advantage: Putting Its Own Products First

propublica.org

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Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#61

Post by saltking112 »

MChristopherson wrote: post #41
saltedonion wrote: post #13

I don’t see what’s wrong with this. Many retailers reserve some of their best shelves paces for their private label products, both as a form of differentiation and to extract higher margins. You could argue that Amazon is unique in that it is large and potentially has a monopoly over eCommerce, but it is hard to say that in the end, consumers are on the loosing end. Most amazon basic products are commodities, and pri…

"Many retailers reserve some of their best shelves paces for their private label products" A key difference is that in those situations (a grocery store, for example), the marketplace owners have already purchased all the products on the shelves. It's the grocery store's decision to choose what and how the products that they have paid for are presented to customers. This is not a hundred-percent comparison, of course…

So if a store decides to sell things on consignment they no longer have power over how the products are displayed?

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#62

Post by heavyset_go »

ehh2heiddn wrote: post #49
nullandvoid wrote: post #34

Earlier quoted context omitted.

My girlfriend had nail varnish delivered in ana Amazon box 30x30cm it was ridiculous! So I wouldn't be singing too many praises on their packaging stance

Funny how people buy a single small item have it shipped to them then have the gall to complain about shipping waste.

Are you consistent about your stance on shipping small items and don't receive any paper mail at your address, either?

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#63

Post by mattlutze »

saltedonion wrote: post #13

I don’t see what’s wrong with this. Many retailers reserve some of their best shelves paces for their private label products, both as a form of differentiation and to extract higher margins. You could argue that Amazon is unique in that it is large and potentially has a monopoly over eCommerce, but it is hard to say that in the end, consumers are on the loosing end. Most amazon basic products are commodities, and pri…

It's not hard at all to say consumers are on the losing end when a monopolistic company controls product discovery.

Amazon getting the sales reduces income to anyone else selling, and when Amazon is almost the only place to sell, smaller companies will go under and new ones will have a harder time starting.

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#64

Post by ngokevin »

karaterobot wrote: post #46
Dahoon wrote: post #21

Earlier quoted context omitted.

> but it is hard to say that in the end, consumers are on the loosing end It's quite easy. Amazon is abusing its position to drive others out of business. They collect a lot of data and when someone finds a great selling product they move in and take over a big chunk of the market. That can and will hurt the customer. It should be illegal, as it actually is in some markets.

> Amazon is abusing its position to drive others out of business. I don't think even the ProPublica article is accusing them of this. What evidence is there that Amazon has purposefully driven sellers out of business, as opposed to just unfairly privileging its own brands? Why would they do this, when they created the marketplace and make a lot of money from it?

"abusing" is not the right word, but they definitely can make it impossible to compete in many areas. Let's say you made a laptop tray and sold on Amazon, it did well!

Then Amazon sees it, makes their own laptop tray, subsidized by economies-of-scale and their shipping network. They feature it higher than yours, bury yours down further, and sell it at much cheaper. It's not like you can compete on Amazon. And let's face it, you're not going to compete making your own store or selling it on brick-and-mortar.

Eventually you starve out, you get out of the market, and then they cheapen the product even more to the point of lower product quality. Then at that point, the consumer loses.

Seen so many products that used to be high quality, then the product quality got worse over time with cheaper materials, while keeping the same 5-star old reviews

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#65

Post by gimmeThaBeet »

sevensor wrote: post #44

Amazon's own-brand goods are generally servicible from what I've seen. It puts them at a competitive advantage that their own items are quite unlikely to be counterfeit, while all other brands are subject to suspicion.

I never thought of that, and honestly, in my opinion that's up there as being the most insidious facet. The fact that sort of intuitively, the machinery and incentive to counterfeit amazon branded products on amazon seems way more difficult than any other brand, if only because one might think some entity in amazon would know "hey, wait, you aren't us?"

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#66

Post by txcwpalpha »

aeturnum wrote: post #52
saltedonion wrote: post #13

I don’t see what’s wrong with this. Many retailers reserve some of their best shelves paces for their private label products, both as a form of differentiation and to extract higher margins. You could argue that Amazon is unique in that it is large and potentially has a monopoly over eCommerce, but it is hard to say that in the end, consumers are on the loosing end. Most amazon basic products are commodities, and pri…

I think it's easy to describe why it's problematic without even referring to antitrust. Amazon's brand (as a store / marketplace) is that it helps you sort through many options to select the product they believe you will like the best. This is different from the service offered by traditional grocery stores which offer many different products, but are not arranging those products in relation to a particular request.…

>This is different from the service offered by traditional grocery stores which offer many different products, but are not arranging those products in relation to a particular request.

Grocery stores (and all other brick-and-mortars) spend tons and tons of money and effort specifically arranging their stores to influence which products you will buy. It's done on the scale of which aisle certain products are on, all the way down to the scale of specifically which shelf (and even exact inches away from eye level) certain products are on.

Every single time you walk into a store, the first product you see (maybe in front of the entryway, maybe it's a big banner hanging from the ceiling, or maybe it's the design of the shelf near the cash register) is all meticulously planned.

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#67

Post by sacred_numbers »

ehh2heiddn wrote: post #49
nullandvoid wrote: post #34

Earlier quoted context omitted.

My girlfriend had nail varnish delivered in ana Amazon box 30x30cm it was ridiculous! So I wouldn't be singing too many praises on their packaging stance

Funny how people buy a single small item have it shipped to them then have the gall to complain about shipping waste.

What is wrong with buying a single small item online? If done correctly it should have almost zero environmental impact. The marginal environmental cost for a shipped item is the extra fuel burned by the delivery truck due to the weight of the item (in this case the weight is insignificant) plus the fuel burned while the truck is idling when the package is delivered. I would be willing to bet that the environmental cost for those items is pretty tiny compared to shipping waste, so it's pretty reasonable to complain about the shipping waste.

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#68

Post by shubb »

JumpCrisscross wrote: post #39
saltking112 wrote: post #35

Earlier quoted context omitted.

but some industries clearly needs economies of scale in order to provide the consumer with cheaper and better products. Can you truly argue just because a firm is large they are no longer allowed to offer the same product for cheaper simply because they have a strong foothold in distribution?

> some industries clearly needs economies of scale in order to provide the consumer with cheaper and better products This isn't an economy of scale. The component that has scale is distribution. A third-party seller selling through Amazon gets those advantages the same as Amazon. What's different is the sourcing and manufacturing of the product. Amazon has an edge. But it's not one of economies of scale.

They have a data advantage- Amazon basics are just white labeled goods from some Chinese factory, warehoused and dispatched from an Amazon warehouse just like everything else on Amazon Market. The only difference is Amazon but the stock (and bet on it selling).

Amazon has much better visibility on sales, margins, user behaviour than their market sellers. Where risk is high they allow sellers to take the risk, where it is low they enter directly and take more margin.

It's a great business model, like a hedge fund running an exchange with no separation of information. It would be illegal the financial sector.

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#69

Post by latortuga »

sevensor wrote: post #44

Amazon's own-brand goods are generally servicible from what I've seen. It puts them at a competitive advantage that their own items are quite unlikely to be counterfeit, while all other brands are subject to suspicion.

That's some pretty serious doublespeak. A huge portion of the problem of counterfeits is a result of Amazon's decision to comingle inventory.

Re: Amazon’s New Competitive Advantage: Putting Its Own Products First

#70

Post by Dahoon »

karaterobot wrote: post #46
Dahoon wrote: post #21

Earlier quoted context omitted.

> but it is hard to say that in the end, consumers are on the loosing end It's quite easy. Amazon is abusing its position to drive others out of business. They collect a lot of data and when someone finds a great selling product they move in and take over a big chunk of the market. That can and will hurt the customer. It should be illegal, as it actually is in some markets.

> Amazon is abusing its position to drive others out of business. I don't think even the ProPublica article is accusing them of this. What evidence is there that Amazon has purposefully driven sellers out of business, as opposed to just unfairly privileging its own brands? Why would they do this, when they created the marketplace and make a lot of money from it?

When a product suddenly sells a lot (a fidget spinner for example) Amazon starts selling it too. If you cannot buy a better ad placement than Amazon's competing product you will sell less. The sellers that wasn't selling a lot of products already will be dead. If that isn't driving out the competition I don't know what it is.

>unfairly privileging its own brands

will lead to

> drive others out of business

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