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FTC sues Amazon for illegally maintaining monopoly power

ftc.gov

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Re: FTC sues Amazon for illegally maintaining monopoly power

#471

Post by BowBun »

mrraj wrote: post #444
jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

From the Bloomberg article : "Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead." I have a hard time sympathizing here. Th…

You make a good point, but I think the parent point is true as well. You still have people actually producing work, unable to compete on these platforms where Amazon will literally make a copy of their product at a lower price.

This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+. Like you say, I don't value the businesses that simply re-sell re-labeled products without ever interacting with anything very much. But let's not confuse the 'spam' of the problem with the squashing of actual business that this is historically known to cause.

Re: FTC sues Amazon for illegally maintaining monopoly power

#472

Post by notyourwork »

mrraj wrote: post #444
jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

From the Bloomberg article : "Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead." I have a hard time sympathizing here. Th…

Ding ding ding. Middlemen get squeezed and are mad about it would be equally fair headline here.

Re: FTC sues Amazon for illegally maintaining monopoly power

#473

Post by mlsu »

mrraj wrote: post #444
jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

From the Bloomberg article : "Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead." I have a hard time sympathizing here. Th…

I know that there's the "5x rule" -- BOM cost is supposed to be 5x less than retail.

Is there such a rule for fulfillment and delivery?

Of course, 56% seems monstrously high to me, but then again, so did 5x BOM cost before I had that explained.

Re: FTC sues Amazon for illegally maintaining monopoly power

#474

Post by ToucanLoucan »

steveBK123 wrote: post #427
WalterBright wrote: post #404

Earlier quoted context omitted.

Ebay doesn't do fulfillment, which is why they take a smaller cut.

Correct. My point is that people only casually familiar don't realize how vertically integrated the FBA model is. FBA is like eBay, PayPal, FedEx, Google Ads and a warehouse all wrapped into one. But they charge you varying types of fees based on different measures, at different times, for each of those parts of the stack. And you cannot cross shop, mixing and matching other vendors in to keep them honest on pricing.…

Why shouldn't they? You've arranged to have product you didn't create shipped to a warehouse you don't operate to be stored by a system you don't maintain to be sold on a storefront under a brand you made up and that you didn't create to be fulfilled by a shipping apparatus instead of you going to the UPS Store. What exactly are YOU doing here that merits a payday? Mediating a relationship between Amazon and a Chinese manufacturing firm? They already have tons of those.

The entitlement these entrepreneur types exhibit is the economic equivalent of wind-drag. If buying stuff from random AliExpress sellers and charging 300% markup to sell it to people who don't know better on Amazon isn't working out for you, maybe you should find a way to contribute to the economy instead of just inserting yourself between existing profitable businesses and demanding money for sending some emails.

Re: FTC sues Amazon for illegally maintaining monopoly power

#475

Post by notyourwork »

BowBun wrote: post #471
mrraj wrote: post #444

Earlier quoted context omitted.

From the Bloomberg article : "Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead." I have a hard time sympathizing here. Th…

You make a good point, but I think the parent point is true as well. You still have people actually producing work, unable to compete on these platforms where Amazon will literally make a copy of their product at a lower price. This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+. Like you say, I don't value the businesses that simply re-sell re-labeled produ…

Is drop shopping the kind of business to fight for supporting? That’s all this is.

Re: FTC sues Amazon for illegally maintaining monopoly power

#476

Post by dnissley »

YeBanKo wrote: post #344
arbuge wrote: post #288

Earlier quoted context omitted.

Shopify and Amazon are quite different things. Amazon is a marketplace and provides exposure - in other words, they bring you traffic besides providing ecommerce functionality. Possibly a lot of traffic if there's not much competition already in your space. With Shopify you have primarily an online store solution. It's up to you to do your own marketing somewhere to drive traffic. Shopify does have what they call "Sh…

What about shipping logistic and warehousing? Afaik this is something what Amazon FBA helps with as well?

Hm, all of a sudden the seemingly outrageous fees don't seem so outrageous anymore.

Re: FTC sues Amazon for illegally maintaining monopoly power

#477

Post by ilkke »

toast0 wrote: post #428
musicale wrote: post #393

Earlier quoted context omitted.

I would believe those are actual brand names. Has anyone created software or a web site to generate hilarious Amazon brand names automatically? Edit: Looks like there are lots of AI-fueled Amazon/business name generators. Most of the names weren't as funny as your examples, though I got some good ones (electrofakes.com, etc.) from prompts like "low quality tech products" and "cheap knockoff technology products." Anot…

I mean, MINFARTO has legs. But then again, I remember seeing COBY products right next to SONY products and I guess they're still around. :)

SQMY is my fav SONY 'tribute brand'

Re: FTC sues Amazon for illegally maintaining monopoly power

#478

Post by ctvo »

pixl97 wrote: post #310
dtjb wrote: post #217

Earlier quoted context omitted.

How is that different from Walmart selling their Great Value store brand? They see what products sell well then formulate their own cheaper alternative, maybe even giving their product better shelf placement. Every national grocer does this. It seems to be a pretty close analog yet nobody bats an eye at the practice.

In general there are many different grocery stores, even Walmart the massive company it is only represents something like 10% of grocery sales in the US. Amazon represents something like 40% of all online sales. Typically having a large plurality in a market raises the likelihood of actions against you. >It seems to be a pretty close analog yet nobody bats an eye at the practice. Or, more likely, tech people pay atte…

> Or, more likely, tech people pay attention to Amazon and not the myriad of suits occuring in the retail and grocery world.

We're listening. Feel free to toss some examples of these myriad of law suits against brick and mortar stores for their in-house brands.

Re: FTC sues Amazon for illegally maintaining monopoly power

#479

Post by dirtyid »

eitally wrote: post #372
brianstorms wrote: post #287

I signed up as a Seller on Amazon a while back, with one primary goal: sell extra copies of my book, published by Pantheon Books in 2017. The publisher offered me boxes of them at dirt-cheap prices and I took them up on their offer. So I started selling on Amazon, and I set my price as the lowest possible for "New" condition hardcover. For a while my price got listed on the main book product page. Only briefly though…

My nextdoor neighbor is a shoe salesman (in the US). He traditionally dealt with a region of retailers on behalf of his employer, a multi-brand company like VF, Clarks, Born, etc. In his previous role, he was asked to try to figure out how to add Amazon as a B2C channel. He did, and it essentially became his full time job. A couple of years ago he was laid off, and when his new employer (differently shoe company) lea…

>it's impossible to know whether any of the Chinese brands are actually trustworthy and of high quality.

IMO people buy cheap generic Chinese brands for the same reason they buy cheap dollar store products. They're gambling they can pay 30% the price for 90% of the function. Amazon reseller premium = they're paying slightly more for returns in case things break. They can save more buying from Ali resellers. Even more while temu subsidizing orders. The only people looking for quality are people who order from resalers of established PRC brands, i.e. Xiaomi. In the days before Amazon cracked down, you had brands like MPOW decide better marketting strategy was to give people gift cards for reviews and give no question asked replacements well outside of warranty period. Pretty win-win for consumers.

Re: FTC sues Amazon for illegally maintaining monopoly power

#480

Post by adrr »

YeBanKo wrote: post #268
jollofricepeas wrote: post #52

FBA seller here. A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range. The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change. Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead…

I heard some stores switched to Shopify, would be interesting to learn why it is not an option for stores like yours.

Shopify requires you to build out performance marketing strategy and with the IOS changes, targeting has lost efficiency. It’s more expensive to acquire customers.
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