Amazon’s New Competitive Advantage: Putting Its Own Products First • Hacker News Board

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

#131

Post by colinmhayes » Mon, Jun 08, 2020, 9:48 PM UTC

robertlagrant wrote: post #100

> 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 justificati…

He's lobbying for the 3rd party firms, what else can he say? "My job is to complain when amazon consolidates power away from my 3rd part clients" wouldn't go over as well.

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

#132

Post by snowwrestler » Mon, Jun 08, 2020, 9:52 PM UTC

AnimalMuppet wrote: post #126

WalterBright wrote: post #87

Earlier quoted context omitted.

The antitrust case was about Microsoft giving away a free browser. Every operating system comes with a free browser. My phone comes with a free browser. My kindle comes with a free browser.

No. The antitrust case was about Microsoft using their control of the OS to push users to use Microsoft's browser. The issue wasn't that Microsoft gave away IE for free. Netscape gave away Navigator for free, too. The issue was that Microsoft tried to "leverage" Windows to increase IE's market share.

Specifically, Microsoft told PC builders (to which MS was a supplier) that they would not sell Windows to them if they intended to pre-install Netscape as well.

Microsoft tried to use their monopoly as the supplier of one piece of software (the OS) to distort the market for another piece of software (the browser).

Netscape did not give Navigator away to PC builders for free originally; selling volume licenses was their business model, and Microsoft illegally destroyed it. Hence the prosecution.

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

#133

Post by Novukus » Mon, Jun 08, 2020, 9:54 PM UTC

clairity wrote: post #33

ChrisLomont wrote: post #28

Earlier quoted context omitted.

Amazon's share of the US retail market is too small to call them a monopoly there, and they hold around half of online retailing, again too small to be a monopoly, since there are ample places to get goods elsewhere. Until they're a legal monopoly in some suitable category, they are welcome to do this. One effect may drive amazon competitors to cater to all the sellers. And at any rate, to be the top spot Amazon has…

it's a mistake to only consider (perceived) market share (100%, 51%, or otherwise) as the primary metric of monopoly. it is, in fact, only one metric of many by which monopoly is judged. being a platform business that competes directly with its business customers can be a significant (but not necessarily sufficient) indicator as well.

I don't know exactly what US anti-trust law says, but German anti-trust law also considers what kind of power you have over competitors and suppliers to decide whether you're behaving anti-competitively. We call it (roughly translated) "Law against constraint of competition". Amazon might qualify as abusing their position under our laws. Unfortunately, it can be difficult to get a case started if the relevant authority isn't paying attention because of how the justice system is structured here and there's a question of how badly companies are actually being impacted in Germany by Amazon's behavior. Our wholesale/retail market seems to be a bit different and far more diverse than in the US.

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

#134

Post by jacobr1 » Mon, Jun 08, 2020, 9:55 PM UTC

Beached wrote: post #102

jdmichal wrote: post #40

Earlier quoted context omitted.

It's not about being scaled. It's about using your scale in one place to force scaling in another. If Amazon provides a marketplace, where people pay them to list and sell products, then using the strong position of that marketplace product to then leverage and scale up their own products is potentially troublesome.

I mean, Walmart is also mega huge, and also allows 3rd party sellers on their website. is it troublesome that Walmart also promotes their own items or the items where they make the most profit first?

I think the bigger problem that people have in general with moves like this is the _change_. If Walmart previously didn't promote their brands, and now did so aggressively, you'd hear complaints as well.

The other complaint seems to be "fairness." If you operate a platform, people expect it to be fair. But what is "fair" probably has more to do with historical cultural norms than actual abstract fairness, again it is the change the causes the issue. If Walmart started putting "see our generic option for cheaper over here" on end-caps that manufacture were paying top billing to place, they'd complain. But Walgreens has already been doing this in their OTC sections for years, just not with paid-to-place products.

As a consumer, I personally like the Amazon brands, because I can at least trust them to be real products with a reasonable quality expectation, not a switchout from some crappy seller or comingled inventory with fakes.

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

#135

Post by coronadisaster » Mon, Jun 08, 2020, 9:56 PM UTC

that is not new, unless that article is old

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

#136

Post by mjevans » Mon, Jun 08, 2020, 9:57 PM UTC

chillacy wrote: post #20

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…

Add to this the fact that a lot of these brands don’t even manufacture their items in the first place: they source manufacturers and slap their logo and marketing on, then markup the item price. Does that really add value? In some cases the private label even uses the same manufacturers, the people producing the product still get paid in the end.

I would really LOVE if Amazon required all sellers to disclose the company and country of original origin. Including for Amazon products.

If it's an electronics part, I would also like the FCC submission numbers, UL submission numbers, etc. For every regulatory agency in which a filing was made, I would like to be able to see those filings.

Those filings should also count as the advertised product specification. If they change chips or designs outside of the specified list I should be able to return the product for it being different than the listed item.

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

#137

Post by nickpinkston » Mon, Jun 08, 2020, 10:01 PM UTC

I think this has been an advantage for a long time, but yes it keeps expanding.

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

#138

Post by jacobr1 » Mon, Jun 08, 2020, 10:04 PM UTC

JumpCrisscross wrote: post #104

saltking112 wrote: post #54

Earlier quoted context omitted.

With commoditized products the brand/manufacturer has no pricing power, so in order to go down the cost curve the firm would need to deploy more capital. This means making things in bigger batches, more efficient shipping, more advertisement investment taking ads out on Amazon to get initial reviews etc... In each of these components Amazon Basics has an advantage over third parties whom are often mom and pop and are…

> Amazon Basics has an advantage over third parties Totally agree. But this isn’t an economy of scale advantage. SoftBank-backed companies had a capital advantage over their competitors. That isn’t per se an economy of scale. Amazon’s products have a distribution advantage over smaller competitors. Again, not an economy of scale.

On the sourcing side, they have a scale advantage of placing larger orders which can get them better OEM pricing. Depending upon the product category their probably are manufacturing efficiencies of scale that enable better pricing. And in particular, their purchasing departments have more efficient analytics numbers to make product entry decisions that benefit from the scale Amazon has reached. So the efficiency in which they are likely to operate in making JIT purchases, or predictive purchases, and avoiding costly inventory mistakes and markdowns is only possible with the large market reach and ability to hire a technical depth of analysts (or tools makers for analysts) enabled by their size.

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

#139

Post by ryanmcbride » Mon, Jun 08, 2020, 10:05 PM UTC

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 believe the difference between Amazon and a grocery store is that a storefront has to pay for its stock up front and then sell it. This means that if a store stocks a competitor, the company that created the competing product has already been paid. Stores often have agreements with distributers to return and get partial refunds for unsold stock, but not usually the full amount.

Whereas Amazon is not a storefront, it's a digital marketplace. They don't have to buy the stock of the product that is being sold, they just put up the listing and take their percentage if the listing sells, and then it's fulfilled by whatever company created the listing. This means that Amazon doesn't lose any money if a competing product doesn't sell.

Obviously amazon _does_ buy and fulfill orders themselves for many items, but not all.

I think there's a planet money on this specific topic

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

#140

Post by TeMPOraL » Mon, Jun 08, 2020, 10:07 PM UTC

modeless wrote: post #74

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.…

> 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 an extremely important part of the service that every store provides. The only difference with Amazon is that they offer a wider selection of everything. In brick and mortar stores, only one or a few products of each type are stocked and the rest are simply not o…

Now that we have ubiquitous Internet access, I think it's important to reinforce the point that you shouldn't use a store - whether a brick&mortar or on-line - as a product discovery and recommendation engine. You won't find the best value for money this way.