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

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

#271

Post by Black101 » Mon, May 03, 2021, 4:02 PM UTC

gok wrote: post #231

Lots of comments here of the format "every store does this." No, no other store operates this way. Walmart and Costco do not have a little flea market of third party sellers inside their stores who run their own logistics. This would be more like Amazon being both an anchor tenant and owner of a mall, and requiring that every other store within the mall provide all their sales information, then rapidly evicting all t…

> Walmart and Costco do not have a little flea market of third party sellers inside their stores

walmart.com does

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

#272

Post by BlueTemplar » Mon, May 03, 2021, 4:02 PM UTC

pessimizer wrote: post #76

ekianjo wrote: post #53

Earlier quoted context omitted.

RMS is right about many things but not this one. Competition naturally leads to few companies capturing a market over a long period of time. What's however important is to prevent actively regulatory capture of said markets.

That's going to be impossible if alienating one or two companies can ruin your career in the industry. And that's aside from the fact that regulators will mostly be recruited from those couple of companies, looking for jobs with those companies when they leave, and starting consulting firms and lobbying firms that will be contracting with those couple of companies. Those companies will also have Congress's ear when r…

Well, obviously, if you have a corrupt government and corrupt experts, you won't be able to achieve much... why was this downvoted ?

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

#273

Post by [deleted] » Mon, May 03, 2021, 4:04 PM UTC

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.

[deleted]

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

#274

Post by Workaccount2 » Mon, May 03, 2021, 4:08 PM UTC

spaceribs wrote: post #2

Amazon should be nationalized. All these 3rd party companies want is a "farmers market", a stall to sell their wares. Give them the municipal software infrastructure they need to do so and maintain it as a public good.

Amazon doesn't need to be nationalized, it does need to be broken up though. The dividing lines in the organization are so clear you could practically tap it with a hammer and it will fall apart into nice individual pieces.

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

#275

Post by codemac » Mon, May 03, 2021, 4:08 PM UTC

awillen wrote: post #258

cgriswald wrote: post #241

Earlier quoted context omitted.

You have the wrong mental model. Amazon isn’t Costco. Amazon is a shopping mall that has access to its tenants’ sales information and also owns an anchor store in the same mall. Costco can determine that Best Brand shoes sell in its stores and decide to source shoes themselves and stop carrying Best Brand. Amazon can determine that the Footlocker in their mall is making a killing selling Best Brand shoes and either s…

This explanation doesn't explain the difference to me at all. Costco can see that vodka sells well, so they can make Kirkland brand vodka. They control the layout of the store, so they can change the layout so people see Kirkland brand first when they get to the liquor section. They know the pricing of other vodkas and which ones sell well, so they can source Kirkland vodka at an ideal price point. None of what you'v…

It's simple, Costco actually buys the inventory, and resells it. There are more advanced kinds of agreements (like buy back X number of coats of you sell less than Y) but that's largely how they operate.

Amazon is much more like a digital mall in that they rent out their store features for sellers.

However, Amazon would like to be seen by the customer as Costco and this causes dissonance between how they treat sellers, and how they treat customers.

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

#276

Post by jquaint » Mon, May 03, 2021, 4:08 PM UTC

rtsil wrote: post #226

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 familiar with Costco. Do their sellers operate their own stores inside Costco's premises?

I don't think they do. It's similar to a grocery store that sells other companies products. Costco is different in that they sell products wholesale/bulk.

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

#277

Post by awillen » Mon, May 03, 2021, 4:10 PM UTC

411111111111111 wrote: post #268

awillen wrote: post #258

Earlier quoted context omitted.

This explanation doesn't explain the difference to me at all. Costco can see that vodka sells well, so they can make Kirkland brand vodka. They control the layout of the store, so they can change the layout so people see Kirkland brand first when they get to the liquor section. They know the pricing of other vodkas and which ones sell well, so they can source Kirkland vodka at an ideal price point. None of what you'v…

I think the only difference is that Amazon is a digital marketplace, so they can and do let their users pioneer what gets sold. Space is at a premium with a physical location, so the likelihood of an actual store exploiting that is extremely unlikely

Unlikely? I literally just described an example of Costco doing this right now with vodka. That's not a hypothetical - Kirkland brand vodka is a real thing.

Your logic is backwards - when space is at a premium, making the most profit off each item in that space is critical. It makes more sense for Costco to do this than it does for Amazon, not less.

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

#278

Post by jquaint » Mon, May 03, 2021, 4:13 PM UTC

baq wrote: post #221

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.

Two helpful questions I don’t know answers to, but I’m quite confident that the difference between answers are the crux of the matter: Who are Costco customers? Who are Amazon customers?

I think that most Costco customers also use Amazon. I.e. I get my basic bulk items from Costco and my specific items from Amazon. Perhaps this is why amazon is trying to get these customer with "Subscribe and save" which offers discounts for subscriptions on basic items.

Although, I have not seen any real data on this. Just my gut read.

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

#279

Post by awillen » Mon, May 03, 2021, 4:13 PM UTC

codemac wrote: post #275

awillen wrote: post #258

Earlier quoted context omitted.

This explanation doesn't explain the difference to me at all. Costco can see that vodka sells well, so they can make Kirkland brand vodka. They control the layout of the store, so they can change the layout so people see Kirkland brand first when they get to the liquor section. They know the pricing of other vodkas and which ones sell well, so they can source Kirkland vodka at an ideal price point. None of what you'v…

It's simple, Costco actually buys the inventory, and resells it. There are more advanced kinds of agreements (like buy back X number of coats of you sell less than Y) but that's largely how they operate. Amazon is much more like a digital mall in that they rent out their store features for sellers. However, Amazon would like to be seen by the customer as Costco and this causes dissonance between how they treat seller…

Okay, you've described the business models, but so what?

In both cases, they still use the sales data available to them to create and sell their own products at the expense of third party sellers. In Amazon's case, that means diverting customers away from third party listings to their own. In Costco's case, that means making fewer purchases from third party sellers because the amount of shelf space available decreases as Costco puts more of its own products out.

The type of sales relationship that they have with third party sellers doesn't change the fact that both are using sales data to create and sell their own products at the expense of those third parties.

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

#280

Post by elzbardico » Mon, May 03, 2021, 4:14 PM UTC

Manuel_D wrote: post #225

jasallen wrote: post #205

Earlier quoted context omitted.

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 m…

I'm still not understanding the distinction here. Costco and Amazon both sell company-brand products, alongside non-company products. Costco and Amazon collect and analyze sales data from the sale of both company and non-company products.

Costco buys the products it sells. Then it decides how and for how much they will be sold. Their product, paid for. That’s the difference