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

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

#91

Post by Maultasche »

sigjuice wrote: post #78
beamatronic wrote: post #73

I wanted a shredder. Wirecutter recommended the AmazonBasics one. I bought it. It’s great. Wanted another one. No longer made! Bummer. Need some light bulbs. AmazonBasics ones look good. Oh, doesn’t ship to California.

That is so strange. Why wouldn't they ship light bulbs to California?

It's probably because they don't meet some California environmental regulation (like energy efficiency or toxic chemicals) or aren't certified to meet those regulations. California tends to have the strictest environmental regulations.

Some models of cars are unable to be sold here for the same reason, although most are designed to conform to California regulations due to the manufacturers not wanting to miss out on the California market.

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

#92

Post by txcwpalpha »

frenchyatwork wrote: post #84
txcwpalpha wrote: post #66

Earlier quoted context omitted.

>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 t…

Sure, and it probably helps sell those things, but there are several differences between those to that makes them extremely different in practice. 1. There's limited space at the front of a brick and mortar store. It's not practical to put most of the items at the front, so anyone who's not just there for a bag of chips ends up looking through the aisles anyways. 2. Brick-and-mortar stores usually only sell a few for…

>1. There's limited space at the front of a brick and mortar store. It's not practical to put most of the items at the front, so anyone who's not just there for a bag of chips ends up looking through the aisles anyways.

There's limited space on the frontpage of Amazon.com, too. If I go to Amazon looking for chips, I won't see it on the front page so I'm going to end up going to the Chips section of the site. If you're just at the store for a bag of chips, you go the chips aisle, which is also meticulously planned to specifically influence which brand of chips you will buy. I fail to see how this is any different than going to the Chips section of Amazon and seeing a specially arranged selection of chips.

>2. Brick-and-mortar stores usually only sell a few forms of same product. If I want olive oil, there's some store brand, some italian-looking brand, and maybe a brand that advertises some sort of magical health benefits. There might be a few variations for the level of refinement/virginity. It's easy for me to look at all the options and compare them. When I look at a search page on Amazon, there's often 100's of hits, and it's often pretty unclear if there's any difference between them that I'd care about (see https://www.amazon.com/s?k=olive+oil).

I don't really see what this has to do with the topic at hand. Can you clarify your point?

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

#93

Post by macspoofing »

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 don’t see what’s wrong with this.

I'm with you from an ideological perspective, but from a practical perspective living in the current world the way it is, they will get in trouble from either the American or European[1] regulatory bodies. And I'm surprised they don't get it. It's only a matter of time. It will take only one of their platform users or competitors to get fed-up and make a big stink (and there's already griping), that will start a chain reaction where they will have to do something to firewall their divisions, or they will be broken-up while paying multi-billion dollar fines and taking a huge PR hit.

I'm not a genius, but it doesn't take a genius to see that this WILL happen. And they are so stupid for doing what they are doing just to sell some Amazon-branded toilet-paper. They should have just stayed an open platform and not competed with their users. They screwed this up and it's too late to do anything about it now.

>Many retailers reserve some of their best shelves paces for their private label products,

Sure. And Apple can get away with heavily restricting the type of apps that can be distributed on iOS (so much so that you can't even ship your own HTML rendering engine!!!), but if Microsoft tries something like that with Windows, they would get in tons of trouble. Do you think Amazon in this example is more like Apple or more like Microsoft?

[1] Nothing makes European regulators as happy as going after American tech companies.

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

#94

Post by Beached »

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.…

Amazon started out being the retailer, and moved into the space of being a platform. I remember way back when they only sold products from themselves. coincidentally the more amazon moved to being a platform for 3rd party sellers, the less I used them l.

I rarely use amazon for anything today because the volume of garbage easily outweighs the good products, mad it's like rolling craps dice if you get a good seller. I opt to purchase directly from the manufacturer or a known retailer that know owns the product they are selling now, if I use amazon, it is exclusively for amazon brand products only.

if this type of behavior pushes 3rd party sellers off the platform and returns amazon to their glory days of being the actual retailer, I think it's a good move

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

#95

Post by nickff »

sigjuice wrote: post #78
beamatronic wrote: post #73

I wanted a shredder. Wirecutter recommended the AmazonBasics one. I bought it. It’s great. Wanted another one. No longer made! Bummer. Need some light bulbs. AmazonBasics ones look good. Oh, doesn’t ship to California.

That is so strange. Why wouldn't they ship light bulbs to California?

I am not sure, but my guess is that the packaging is not compliant with proposition 65. California has a variety of regulations which force small changes to packaging and manuals.

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

#96

Post by somethingwitty1 »

aeturnum wrote: post #81
txcwpalpha wrote: post #66

Earlier quoted context omitted.

>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 t…

Yes, they do. That's why I said they "are not arranging those products in relation to a particular request." We are all in the same store, and that store must arrange itself in a way that will serve all customers. Amazon's business model is premised on the idea that they provide a better service than that.

I'd like to believe stores were setup in that fashion, but we've known for a long time that isn't true. It benefits the store, not serve customers. A good example from Costco: https://www.businessinsider.com/costco-store-layouts-are-con...

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

#97

Post by ghostpepper »

throwaway_USD wrote: post #31
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…

Under Anti-trust law Company A and Company B can do the same exact thing, but 1 Company may violate Anti-trust laws while the other doesn't. >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. It is not about a "monopoly", under Anti-trust you can't unfairly leverage your market position to f…

Why don't grocery stores get in trouble then? Do you need to be effective at forcing competitors out of the market or does simply the attempt make one guilty? Don't all businesses want to force their competitors out of the market?

As an aside it does not surprise me at all when I learn that a law is not worded in a way that's congruent with the popular conception of the law.

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

#98

Post by preommr »

luckylion wrote: post #82
telchar wrote: post #24

Earlier quoted context omitted.

I think the depth is inversely proportional to the utility of search - the better I can search for the combination of features, price, etc that I need the less deep the shelf gets. The endless generic white-labeled junk plus poor metadata really makes the problem bad though.

Okay, that sounds conspiratorial, but: is that why Amazon's search is atrociously terrible, so that they can sell the top spots for more? If you could search by attributes reliably, the top spots lose relative value.

Well I doubt they actively try to make it worse.

But I would believe it if because of the lack of incentive, they din't make active efforts to improve it.

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

#99

Post by bingdig »

koheripbal wrote: post #53
bingdig wrote: post #42

The main problem is that current antitrust law doesn't clearly prohibit anti-competitive behavior like this. Modern antitrust law has largely been created by judges (often without any economic training) interpreting early 20th century laws. This is a great summary of how regulations could be adapted to stop this sort of activity: https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p... In short, competition ne…

I don't believe the bottleneck here is the law or judicial interpretations. The problem (IMO) is that there is no political pressure for the Justice Department to seek corrective action against these near-monopolies. The lack of action (IMO) comes from two motivations... 1. The desire for US politicians to see US companies attain global near-monopoly status as a mechanism to help propagate US policy & surveillance. 2…

Sure, there could be some corruption going on, but theres a much more mundane legal reason the DOJ won't bring cases. They often won't prosecute because the costs of losing anti-trust cases are so high, largely because of the way antitrust law is written. When the DOJ brings a case and loses, the agency loses all future power to bring a similar case because precedent is binding, so they only prosecute the most obvious anti-trust violations. As all these conflicting comments in this thread and related articles suggest - an antitrust case against Amazon is quite complex and not your straightforward monopoly or price fixing case.

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

#100

Post by robertlagrant »

> The new approach violates Amazon’s mantra that every decision must put the customer first, said Tim Hughes, a consultant who used to work in product management at Amazon. “Why would their brand be a better option for consumers?” said Hughes, chief operating officer of a firm that helps brands manage Amazon accounts. “It doesn’t necessarily have to be cheaper, or better, or anything. So then what’s their justification to say, ‘We’re just going to put this up in front of everybody else’? This is just another example of Amazon being able to manipulate the platform for its own good use.”

Tim Hughes should probably figure out that the previous system had exactly the same properties

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