Amazon knew seller data was used to boost company sales • Hacker News Board

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

#211

Post by spaceribs » Mon, May 03, 2021, 3:12 PM UTC

dahfizz wrote: post #163

spaceribs wrote: post #154

Earlier quoted context omitted.

I think income tax is the most impactful and expensive tax we have in the US, it's the one everyone thinks of when someone says "doing your taxes". The fact that Amazon just this year after not paying for 2 years had to pay a measly 1.6% in taxes does not really negate the argument. Edit: 4 years -> 2 years

It really feels like you're twisting reality. Amazon went 2 years without paying _income_ tax, not 4. Amazon paid $3.5 billion in taxes in 2019 (some of which was differed, but still owed). That is over 25% of their income that year. Their federal income tax rate came out to 1.6%, but its borderline lying to say "they paid a measly 1.6% in taxes". Amazon is an awful company. There is no reason to bend the truth to tr…

I misread the article, and I'll correct the 4 to 2 years now.

Income is income though, not sales or payroll which are the expected and manageable operating costs of overhead and human resources.

If I win the lottery, almost 50% of my winnings go back to the state, and I haven't even bought anything with those winnings. What's different about Amazon having a banner year?

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

#212

Post by _up » Mon, May 03, 2021, 3:12 PM UTC

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…

I am not from the US but I think Amazon has much more market dominance than Costco. If Amazon had 20% market share nobody would mind, but they don't have real competition that comes close.

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

#213

Post by annoyingnoob » Mon, May 03, 2021, 3:13 PM UTC

Seems like all big retailers do this. I know that Home Depot's HDX brand copies products, and you are more likely to find HDX in stock than the products it competes with.

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

#214

Post by nerdponx » Mon, May 03, 2021, 3:14 PM UTC

jagged-chisel wrote: post #190

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.

Suppose Costco allowed other vendors to be present and selling in their stores. Costco requires these vendors to use Costco's checkout systems. Costco then takes the data gleaned from those sales to determine which products to compete with and then begins aggressively pushing their competing product. Is this fair to the vendors?

This is an interesting thought experiment. Maybe the objection is that Amazon is erroneously considered a neutral marketplace, and not a "store". But practically is there a difference between these arrangements, other than the incidence of who technically is the retailer and who is the wholesaler?

I think the real issue is how people shop online versus in stores. Online, they see a linear feed of individual products and buy whatever is near the top. In a store, they see a variety of displays, and it's almost hard not to comparison shop even a little bit.

It's much, much easier to be "anti-competitive" on a web store than a physical store. Imagine if Costco did what Amazon does, deliberately making Kirkland products easier to find in the store and look more reputable/trusted compared to other brands.

So I don't think the problem is that this particular move by Amazon is any more anti-competitive than anything a normal store with store brand would do. The problem is that Amazon already engages in other anti-competitive activity, so pretty much anything they do related to their own store brand is distasteful.

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

#215

Post by dathinab » Mon, May 03, 2021, 3:14 PM UTC

jagged-chisel wrote: post #190

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.

Suppose Costco allowed other vendors to be present and selling in their stores. Costco requires these vendors to use Costco's checkout systems. Costco then takes the data gleaned from those sales to determine which products to compete with and then begins aggressively pushing their competing product. Is this fair to the vendors?

No in that case Costco would likely get into legal problems.

Actually there had been legal cases with unfair market practices in grocery stores between different competing products sold there. I think there is currently a ongoing case with Oreo.

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

#216

Post by selectodude » Mon, May 03, 2021, 3:14 PM UTC

notyourwork wrote: post #195

chii wrote: post #193

Earlier quoted context omitted.

> To me this behavior by Amazon seems worse only seems worse because amazon is so big, and so monopolistic, that a lot of people hold them to different standards. It's the same idea that people expect a rich person to pay more taxes, or contribute more philothropically.

I'd rephrase this: "only seems worse because amazon is so big, and so monopolistic" as: "only seems worse because amazon is so big, and so dominant" I don't think monopolistic is a fair adjective because it has an implied legal connotation. Is Amazon a monopoly or just the largest e-commerce retailer today?

Monopoly isn't the best term either, there's definitely other companies that are vertically integrated and are single-sources. What they don't do (or try to avoid?) is leveraging their position to unfairly complete with other companies.

Amazon launching new product lines and boosting them to the top of the search results is almost textbook leveraging. Having information showing they used their internal data to find which products to market is basically icing on the cake.

Google has already been dinged for this with their Google Apps boosterism on their search results. I can't imagine this goes any differently from that.

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

#217

Post by ch4s3 » Mon, May 03, 2021, 3:15 PM UTC

swiley wrote: post #156

ch4s3 wrote: post #133

Earlier quoted context omitted.

That's not what people meant in 2008 when the phrase "too big to fail" came into the lexicon. The phrase meant that there was systemic risk. You're moving the goal posts to mean "big companies are behaving badly," which is different.

That's certainly how it was sold but I think even then it meant what I said.

I really didn't though. There was real fear at the time that if auto makers went under it would ripple through their supply chains and gut the economies of numerous states, then leading to a cascading series of state and local budgetary crises. How correct that assessment was is up for debate.

The fear with banking was that the industry had become so consolidated and interleaved that a failure of one mega-bank would bring down the whole financial system and cause a liquidity crisis that would tank any industry that relied on credit for ongoing operations, which is most industries.

None of this was about companies' behavior it was about how they had become so large that their failure would destroy huge segments of the real economy. Arguably though, the bailouts are a form of moral hazard that make more companies too big to fail.

Its commentary on the system.

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

#218

Post by erikpukinskis » Mon, May 03, 2021, 3:15 PM UTC

helsinkiandrew wrote: post #160

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…

> "this sort of things" was exactly the reason why they chose to use MS Azure instead of AWS. Unless I've grossly misread these articles, Amazon were using third-party seller data from sales on the Amazon.* websites. The data was on their (Amazon.com) sales database (who sold how much of what, for how much). They weren't accessing (hacking) data hosted on AWS (a database hosted for an online shop not related to AWS)…

That’s why they used the words “this sort of thing” and not “this thing”.

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

#219

Post by nerdponx » Mon, May 03, 2021, 3:15 PM UTC

tylerrobinson wrote: post #207

MengerSponge wrote: post #185

Earlier quoted context omitted.

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?

It's a lot easier to comparison shop. Also you can trust that the Quaker on the shelf is real name-brand Quaker. So you can look at the store brand prices, packaging, etc. and make a reasonably informed and quick decision.

I wouldn't be surprised if Amazon lets the fraud and ratings scams go somewhat unchecked so as to make their own house brand look "safe" and desirable.

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

#220

Post by zachware » Mon, May 03, 2021, 3:15 PM UTC

Y-bar wrote: post #203

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 s…

This is generally not how grocery operates today.

Most large grocers:

  - Sell shelf location slots to the highest bidder.
  - Include a consignment clause in their vendor agreements requiring vendors to take back spoiled, customer-damaged, and unsold inventory at X point or on-demand.
  - Require merchandisers to keep inventory in-stock for as many products as they can get vendors to manage (e.g. the coke delivery person is in-store several days a week.)

All of this is especially true for shelf stable products and beverages.

The modern grocery store is effectively managed like a flea market and is allowed to do so because the chains have so much leverage.

So while we can take issue with Amazon’s practices, we have to remember that most of large-scale retail operates in ways that if written about to the level of Amazon, we’d also be griping about.