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Amazon knew seller data was used to boost company sales

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Re: Amazon knew seller data was used to boost company sales

#201

Post by cptskippy »

MengerSponge wrote: post #185
Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

Imagine if a Costco sales rep offered to swap something in your cart with the Kirkland clone, or if they suggested the Kirkland product as you reached to grab something else off the shelf.

I've never had amazon offer to swap anything from my cart.

Re: Amazon knew seller data was used to boost company sales

#202

Post by zachware »

Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

This is a good point. I don’t think Amazon’s practices are structurally different than those historically of Walmart or Costco.

Each captured sales data and built private label alternatives to key brands on a regular basis. Small differentiator in the case of Costco is that they have a practice (though not a policy) of offering the leading vendor the opportunity to produce the private label before doing it themselves. But that’s a small detail.

Besides the fact that headlines about this get traction, there is a differentiator with Amazon in that they actively market themselves as a marketplace for small businesses in the way we’ve come to view Shopify. Costco and Walmart were always very clearly retailers...they buy stuff and sell stuff at a margin.

So while I think a lot of the blowup about this is overdone, there is a legitimate argument about the difference between how Amazon markets itself and what it does. But, frankly, for anyone with any level of experience with retailers or, frankly, tech platforms, this kind of capture behavior should be expected.

Re: Amazon knew seller data was used to boost company sales

#203

Post by Y-bar »

Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

I used to stuff shelves at a grocery chain ~20 years ago and one difference seldom mentioned is that grocery chains bought from the manufacturers. That meant that we as a grocery chain were responsible for the sale to consumer, we were not merely a marketplace for a bunch of different brands.

So, even if we had our own competing labels for some products, the manufacturers would never be left in the cold with unsold stock (if for example we chose to drop one brand or run a promotion for our own).

Re: Amazon knew seller data was used to boost company sales

#204

Post by carlps »

Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

I'm not intimately familiar with either side, but I see it as: - Costco buys x amount of product at y price from seller and then sells it in its store. - Amazon provides a platform for sellers to sell with a cut going back to Amazon.

There is a fundamental difference between being a retailer and providing a retail platform.

All Costco would really have access to is how much they've bought and how that has performed for them. Meanwhile Amazon is providing a platform for companies with a policy that they will only use their data to help them, which is what is allegedly not happening.

Re: Amazon knew seller data was used to boost company sales

#205

Post by jasallen »

Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

The difference is between retailer and marketplace. Both Amazon and Costco are retailers, and both could use that knowledge to decide what products to self-source for better retail margins. Either way, still a retailer, but maybe also a manufacturer / wholesaler.

But Amazon is also a marketplace. In that role it acts as a "rentable retail space". Using the data of the retailers in your marketplace to decide what to make/wholesale and then retail is another layer.

You could easily argue that it reduces to the same thing. But societally we've excepted that the retailer is a full layer in the system and gets full access to the data flowing through it. The marketplace itself is historically more of a fee-for-use type of thing, so its not an ingrained concept for us.

Re: Amazon knew seller data was used to boost company sales

#207

Post by tylerrobinson »

MengerSponge wrote: post #185
Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

Imagine if a Costco sales rep offered to swap something in your cart with the Kirkland clone, or if they suggested the Kirkland product as you reached to grab something else off the shelf.

Aren't traditional grocery stores doing the same thing but using price, sales, positioning, name, and label imitation? When I reach for Quaker Oatmeal Squares, and Wholesome Oatmeal Squares Cereal is right next to it, for cheaper, also in a blue box?

Re: Amazon knew seller data was used to boost company sales

#208

Post by tracer4201 »

nerbert wrote: post #52
LightG wrote: post #39

Earlier quoted context omitted.

It's a catch-22 ... would Amazon be this innovative had it been nationalised? At what point do you nationalise? Is there a next technology which will be stifled if it was nationalise? Does nationalisation sttifle innovation? I've been wrestling with these questions as I actually don't like Amazon for all the reasons that have been well publicised ... but their customer service is excellent. Which sets me against a st…

Amazon the marketplace isn’t terribly innovative. It’s a marketplace supported by fantastic logistics, and most of it is backed by USPS anyways. There’s only so much you can do to remove the pains from buyers, sounds like we’re there.

> Amazon the marketplace isn’t terribly innovative. It’s a marketplace supported by fantastic logistics

These two statements contradict each other. The thing that Amazon does extremely well is logistics and that is core to their marketplace, not something else to the side.

Amazon.com in my opinion is a logistics company who happens to have a Website that sells products.

Amazon moves an item from point a to point b, and they do it fast and efficient enough that people go back to them again and again.

Last month, I ordered two pairs of jeans and a t-shirt from Eddie Bauer. They arrived in three different packages after about 10 days. With Amazon, it would have been 1 package that arrives the next morning or the following day.

If Amazon is abusing its position, substantial fines or regulations are the right solution in my opinion. I’m absolutely not in favor of nationalization. Any kind of government run facility, in my experience, is mind mumbling horrible at their job. They have no incentive to compete - which might eliminate bad behavior but it also makes for a terrible customer experience. Nationalizing Amazon is no different than just killing the company entirely.

Re: Amazon knew seller data was used to boost company sales

#209

Post by ziml77 »

whoknew1122 wrote: post #84
mk89 wrote: post #21

Well, it's something that is slowly backfiring. It's under the eyes of everyone, and not enforcing such policy will only make it even worse for Amazon itself that eventually will end up selling only non-branded products. Finally it will be only another e-commerce like "ebay" used to be, and something else will replace it. Just enjoy the ride until you can. PS: speaking out of experience, I had one time a talk to a di…

Amazon != AWS. As someone who has access to customer data in AWS, I'm very limited in what information I can access (to the point where it actively makes my job in Premium Support harder than it would be otherwise). I also have to provide a legitimate business reason for access to data. Not only is there an audit trail for what I do internally, but any calls I make to review customer data is published in the customer…

It does though. That money being paid towards AWS will certainly be used to subsidize Amazon's undercutting. A retailer paying for AWS is funding their own demise.

Re: Amazon knew seller data was used to boost company sales

#210

Post by dathinab »

notyourwork wrote: post #189
Gasparila wrote: post #175

Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.

Disclaimer: I'm not a legal expert, just an engineer with my own opinions. I struggle with it as well because conceptually in my mind this is the same as a grocery store using customer buying data to inform itself. Grocery chains have been using private label brands to compete with name brands for years. Check your cereal aisle for the "fruit loops" in the back without a box that are ~50% cheaper than the name brand…

Grocery stores select which products they want to sell and have limited capacity.

Amazon provides a platform through which "everyone" can sell "anything" with no tightly constrained space/slots.

As far as I know Amazon is legally closer to a market place where everyone is up their own stand (but they are required to look mostly the same) and which happens to also require you to use their payment system.

I.e. Amazon is just a proxy while the grocery store legally buys and resells the products.

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