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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

#111

Post by macspoofing »

boardwaalk wrote: post #110
macspoofing wrote: post #93

Earlier quoted context omitted.

>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 alr…

I’m assuming they’ve done some sort of calculus. If you were cynical, you could say they’re pushing the bounds because they know they’ll get whacked for something eventually, even if just for owning a huge chunk of e-commerce (already the case). And if they are going to, why don’t they choose what that’ll be, and the thing that makes them hardly any money? I’m sure they’d be happy to pay basically nothing (what, use…

You must be correct. They are a trillion-dollar company and they can certainly afford lobbyists and lawyers and accountants and consultants to tell them where the regulatory limits are.

And yet, I cannot see how regulators will just let them take over consumer goods given their size and clout, and the fact that they are using data from their users to drive their business decisions on which products to launch and compete with those same users. I just cannot see them not getting into major regulatory trouble for that.

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

#112

Post by city41 »

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'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.

Is that their brand though? I've never been convinced of that due to all the sponsored results (which are very similar to how brick-and-mortar stores arrange their products) and most egregiously, not providing consistent per unit pricing. I've never felt like Amazon is helping me make the right choice at all, but rather duping me into a choice that benefits them.

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

#113

Post by colinmhayes »

txcwpalpha wrote: post #66
aeturnum wrote: post #52

Earlier quoted context omitted.

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 t…

You're agreeing with the comment you responded to. They're saying amazons value is that they don't do that, showing the best products for you instead of the highest margin ones. Not sure I agree with them considering the top products are ads though.

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

#114

Post by throwaway_USD »

saltking112 wrote: post #83
throwaway_USD wrote: post #79

Earlier quoted context omitted.

>Can you truly argue just because a firm is large ... 1. I am not arguing anything, I did not develop Anti-trust law nor did I argue for or against it. 2. I never mentioned the the size of the Firm, because that isn't the legal standard. As I said what matters is unfairly forcing competition out of the market. What Amazon does is has other businesses develop products and markets for those products on the Amazon marke…

So suppose Amazon shared sales/behavior data with other sellers/companies, such that everyone is competing on a even footing with regards to product research. Do you still think what Amazon is doing is anti-competative? In other words, if other well capitalized players had the same data, same ability to manufacture at the same scale, advertise etc... and Amazon's sole advantage is product placement, is it still probl…

>and Amazon's sole advantage is product placement, is it still problematic?

Potentially, but stop focusing on the act and focus on the result.

You brought up retailers and their shelf space. First no grocery store puts "Grocery Store O's" in a better placement than Cherrios...but fine lets assume they did. Does putting "Grocery Store O's" force Cherrios out of the market? No. However, seems to be no shortage of examples of a successful vendor on Amazon being forced out of the market altogether after Amazon copies their successful product.

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

#115

Post by 373uehedhd »

bingdig wrote: post #105
373uehedhd wrote: post #51

Earlier quoted context omitted.

There's nothing stopping an increase in competition is the problem. Sellers want the visibility of Amazon's platform with the benefits of rolling their own. There's nothing physically preventing a merchant alliance from forming its own platform, merchants (that aren't Walmart) simply don't do this because they know they're still getting more value by being on Amazon instead. Online retail isn't new or novel at this p…

Theoretical competition =/= actual competition. Yes, that could technically happen, but Amazon's market power makes it extremely difficult. Here, there's a two-sided marketplace (consumers and sellers) where Amazon has both sides. It's not enough for one side of the market to decide they want out. For example, see what merchants have done with Shopify and the Shop app (merchants are all on board, but consumers don't…

What you're describing is the competitive advantage of shoppers preferring Amazon though, at least from how I'm reading your post. If a seller alliance or rival omnicorp can't entice consumers then they need either better marketing or better deals, competing in short. If they can't succeed at either of those in a manner significant enough to challenge Amazon then how is targeting Amazon with legislation actually helping consumers? It seems like most policy proposals boil down to making Amazon less competitive rather than cultivating an environment that results in more platforms capable of reaching Amazon's combination of scale and popularity. If Google was worse at Search there'd be more competition in the space but it'd hardly be a win for consumers unless you change the definition of a win.

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

#116

Post by AmericanChopper »

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 the same scaling problem that all market places have had. eBay used to have quality stuff on it, now it’s pretty much just a drop shipping front, same thing happened to Etsy. The Amazon marketplace is increasingly filled with low quality products, completely fake reviews, illegal knockoffs, and it’s search has been getting worse over time.

The key advantage that Amazon has over other retailers (for consumers at least) is that its logistics are so damn good. I’ll usually go to Amazon first to look for what I want, because I know they’ll probably ship it faster. But more often than not I usually end up buying from a more specialized retailer for one reason or another.

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

#117

Post by j-c-hewitt »

saltking112 wrote: post #90
frenchyatwork wrote: post #84

Earlier quoted context omitted.

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…

Theoretically Amazon has infinite shelf space, but in reality, no one really scrolls past the first few pages. So in reality, if your product is on page 5, it is perhaps as good as not being on Amazon anyway for that particular query. If you look at it this way, the space constraint isn't much different than brick and mortar.

It's more different than you think because there are many permutations of search terms. There are products that rank really well for odd phrasings of a product search term but not well for the most popular variations. There is also virtual shelf space for weird, niche items with additional features that are not that popular. Amazon aggregates hundreds of thousands of small businesses globally and also tailors search results to FBA warehouse availability. So for example if the warehouses near you are well stocked with product A and not product B you will see product A ranked relatively higher than product B would if you are a prime subscriber, but you will get neutral results when logged out or a non-prime subscriber.

Then you throw in Amazon Shopping ads (aka Sponsored Products) and the shelf space metaphor gets muddled further, because it's like as if every store visitor saw unique and different endcap displays and shelving ordering. There is less individual tailoring to search results than you might expect on Amazon (especially compared to information search engines like GoogleBingBingGo) but it is still a factor.

Then there is the factor of endemic counterfeiting in some categories, so the sketchier the listings are the more likely you are to just buy a counterfeit product, which would never happen in a typical brick and mortar retail shop.

IMO Amazon's private labels are so minor and make up such a small portion of store sales that it ranks very low on the scale of things that Amazon does that are morally/legally questionable.

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

#118

Post by jimnotgym »

txcwpalpha wrote: post #66
aeturnum wrote: post #52

Earlier quoted context omitted.

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 t…

>Grocery stores (and all other brick-and-mortars) spend tons and tons of money and effort specifically arranging their stores

And if I don't like Tesco I can go to Asda. If Tesco won't sell my product I can try and sell it to Sainsbury's or Waitrose.

The equivalent with Amazon is "If I don't like Walmart, there is some guy with a market stall selling fish, another with apples, a store 5 miles away that has carrots...". Or even, "Tescos won't buy my carrots so I will just drive them to every person myself".

I have said it a few times, you can't be the marketplace and sell through that marketplace. Imagine finding the NYSE were trading shares, and were giving themselves 30ms advantage over everyone else (if you can't imagine, have a browse of the Cryptocurrency markets). Imagine a commodities market who own 90% of the oil themselves, and price themselves into every order (maybe onions...).

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

#119

Post by nojito »

ngokevin wrote: post #64
karaterobot wrote: post #46

Earlier quoted context omitted.

> 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 f…

This is what happens in regular B&M stores as well.

They will always push their private brand products to their customers.

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

#120

Post by ForrestN »

There is another unfair competitive advantage that Amazon had for many years, which lead directly to this situation: no profit expectations from its shareholders.

Amazon chose not to earn the normal profits that most businesses need to survive and grow in order to offer unrealistically low prices on all sorts of products specifically in order to gain this advantage. They didn't just happen to gain the market dominance that allows for this sort of anti-competitive abuse, they bought it by convincing shareholders not to punish them for choosing not to earn a profit.

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