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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

#391

Post by cmeacham98 »

nataz wrote: post #302

The most interesting part of the HN discussion is not about the definition of what Amazon is doing, but the occasional misunderstanding of how large brick and mortar retail businesses operate at scale (see: buying shelf space/payment dependant on sales/etc). There are lots of folks on here that understand what Amazon is doing, less who understand retail businesses mechanisms. I'm not sure what Amazon is doing is lega…

These comparisons to brick&mortar stores are mostly irrelevant.

Amazon told 3rd party sellers it wouldn't use their sales data for its own sales (and possibly contractually agreed not to? - unsure here), and it now seems that they broke this promise.

How other stores operate doesn't matter. Amazon said it wouldn't do this and used that trust to attract sellers and grow their platform.

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

#392

Post by TameAntelope »

sokoloff wrote: post #349
addicted wrote: post #309

Earlier quoted context omitted.

It's less doing it at "scale" and more doing it as a monopoly/monopsony. Walmart has faced similar questions as well, but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.

> as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Walmart retail sales are significantly larger than Amazon's retail sales. For 2019 (chosen to avoid the disparate impact of pandemic), Walmart sold $514B while Amazon retail sold only $135B first-party and $200B third-party. Given the growth rates, Amazon will pass Walmart, but I don't think Walmart has "far less" power in retail than…

This, and Walmart isn't just going to sit by and let Amazon win, why would they? I think folks on the Internet generally tend to assume Amazon is inevitable, but I doubt that's how Walmart thinks of it.

Walmart and Amazon are both good for one another, and their competition helps us, except for when they basically non-compete over things like wages.

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

#394

Post by gamblor956 »

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 distinction comes down to the legal differences in how they operate their sales operations:

Costco is legally a "reseller" that purchases items from manufacturers/distributors (at wholesale prices) and "resells" them to customers. (Note: only a tiny fraction (Amazon is also a reseller of items sold through the Amazon.com seller...but not for items "sold" by third-party merchants. The distinction is that for Amazon.com seller sales, Amazon has legally purchased the inventory sold, even if the payment terms may more closely resemble consignment transactions than wholesale transactions.

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

#395

Post by xmly »

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.

It is like Microsoft learns your business through your emails and starts the undercutting. Does it sound more serious?

AmazonMarketplace is a software vendor and data should belong to sellers only.

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

#396

Post by marvinblum »

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…

I had the same thought a while ago. I remember when Amazon mostly acted as a retailer, and not as a marketplace. Nowadays I don't see why I shouldn't buy on ebay or somewhere else, as the marketplace approach negates what I liked about it: everything from one company, a single parcel, easy refunds. If I receive each item from a different retailer anyways, I don't see why I should feed the beast.

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

#397

Post by gamblor956 »

colejohnson66 wrote: post #307
nkrisc wrote: post #291

Earlier quoted context omitted.

> relationship that they have with third party sellers There are no third party sellers at Costco, it’s only Costco.

Not always true. Usually, Costco/Target/Walmart/etc. pay for it before it sells, but it’s not always like that. “Vendor” products like Frito Lay, Bimbo, etc. are sometimes given the ability to just put product on the floor at no cost to the retailer. When it sells, the retailer will send money to the vendor.

Consignment sales represent less than 1% of retail sales at these stores, and generally only are required for new products that the retailer will not purchase in bulk before the distributor proves market demand.

Generally, for the sales you have described, the consignment sales are paired with marketing efforts by the distributor to demonstrate customer interest. If the test succeeds, the store will purchase future lots from the distributor. If the test does not, the product disappears from the shelves and the distributor stops selling it.

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

#398

Post by dahfizz »

spaceribs wrote: post #211
dahfizz wrote: post #163

Earlier quoted context omitted.

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?

> What's different about Amazon having a banner year?

The big difference is that Amazon is a company.

If Amazon decides to pay out large bonuses or dividends with its surplus, that gets taxed at the same rate as your lottery winnings. Before that happens, the income is Amazon's and not an individual's. There is no reason to expect the corporate income tax to behave the same way as individual's income tax.

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

#399

Post by gamblor956 »

fredophile wrote: post #341
awillen wrote: post #277

Earlier quoted context omitted.

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.

Store brand products are not new and not the issue. Let's pretend that Costco didn't currently sell vodka at all. If Costco wants to know if they should start selling vodka or bottling their own vodka and selling that they don't have access to the sales data from the liquor store next door to Costco. Amazon is letting other businesses take the risks and using sales data from those businesses to outcompete them.

That's the right way to look at it, missing just one crucial detail.

Costco pays for the items that appear on its shelves (excepting the Amazon gets paid by the distributors (aka third party sellers) on Amazon.com for handling their sales (even in instances where it is not handling fulfillment), while also competing against them. That is where the anticompetitive concerns arise.

If Amazon just sold stuff through the Amazon.com seller, and didn't have third-party sellers, (or if it operated a separate website for third party sellers) that would be fine.

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