The FTC sues to break up Amazon over an economy-wide “hidden tax” • Hacker News Board

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#541

Post by mecha_ghidorah » Wed, Oct 04, 2023, 10:49 PM UTC

endisneigh wrote: post #162

jbluepolarbear wrote: post #159

Earlier quoted context omitted.

You’re just wrong, Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers. The second largest is Walmart and it’s closer to 7%. Walmart, target, whatever, don’t add up to Amazons market.

> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin? Sellers should stop using Amazon if they don't like their policies, and the issues will correct themsel…

> Not to mention that if sellers stopped selling on Amazon they wouldn't control so much.

This is a problem in terms of organisation. If lots of people stop selling on Amazon this would be true. The problem is individually each seller is motivated to deal with Amazon so long as lots of other sellers are. A mass exodus from Amazon would in short order make the Amazon store far less relevant, but nobody wants to leave before everyone else is doing it because until then it costs them

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#542

Post by alsetmusic » Wed, Oct 04, 2023, 10:57 PM UTC

simpaticoder wrote: post #499

granzymes wrote: post #378

Earlier quoted context omitted.

You are touching on a point that Benedict Evans has made quite eloquently in the past: >There was a joke a few years ago that rent is the new [Customer Acquisition Cost], and that now applies to everything. The [Total Addressable Market] for search ads is not ‘advertising’ (let alone online advertising) but everything that is spent to reach and serve a customer, starting with retail rents. This applies to Amazon, but…

>There will be no site that does not offer advertising, because advertising allows the site to determine which sellers can afford to pay more while still being profitable. It's still possible that people exist who charge "what it's worth" rather than "what they can get". Those people can still make a fine living off of a two sided market place through flat transaction fees. Craigslist is an example that comes immedia…

Craigslist is a hell hole. I stopped selling there because even when I was practically giving electronics away (to prevent buyer’s remorse), people still emailed insultingly low offers. I just gave up on the site maybe five years ago.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#543

Post by alsetmusic » Wed, Oct 04, 2023, 11:00 PM UTC

pierat wrote: post #383

cwoolfe wrote: post #244

This strategy has been adopted by eBay as well and artificially drives up prices. Let me elaborate. Recently, eBay has made it so that only the products with paid ads are shown in places where customers click. This drives up the cost of everything by more than 10% which is eBay's ad fee. I refused to buy a paid ad to sell my MacBook. It sat on the site for a month, which is highly unusual for an in-demand and rightly…

Thats not the only thing I caught, at least with Ebay. During the pandemic, I decided to sell a bunch of a component I had stockpiled. (Im not a scalper. I got the parts when my dad died.). I put them for sale with $100 minimum, auction. They ended up selling for $300. I was definitely happy.... until Ebay refused to send me my money, and instead demanded access to a bank account, after the sale was complete. Fuck th…

eBay stole my money and made it impossible to get a refund fifteen years ago. I gave up and stopped using the site. Sorry I don’t have more details; it’s faded from memory. But it was dirty behavior, that’s for sure.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#544

Post by alsetmusic » Wed, Oct 04, 2023, 11:02 PM UTC

MiddleEndian wrote: post #509

93po wrote: post #465

Earlier quoted context omitted.

Wow, this is wildly unethical and shitty. I'm never using ebay again.

https://www.cbsnews.com/news/investigation-ebay-employees-st... They also allegedly hired someone to stalk and harass a couple who posted negative reviews of them online.

That was supposedly rogue execs. Not taking their side, but I don’t think it was company policy.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#545

Post by jedberg » Wed, Oct 04, 2023, 11:05 PM UTC

mountainofdeath wrote: post #456

Much of what Amazon does is what other retailers already do. Amazon just does it more overtly and with smaller businesses. In fact, various aspects of this where pioneered by WalMart and Costco. 1. WalMart determines the expected product and expected price and tells vendors to take it or leave it. The agreement often has a stipulation that the same product can never be cheaper elsewhere which is sometimes easy as Wal…

> Costco makes the majority of its money from memberships

Not really. Their total profits last year were $2.8B and their membership income was $1.5B. It only represents the majority if you assume there is no cost to their membership income. But we know there is, because they have to have employees who do nothing but process memberships and they have to maintain all their membership benefits which also requires employees.

It's fair to say that about 1/2 of their income is from memberships though, which is still high.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#546

Post by [deleted] » Wed, Oct 04, 2023, 11:07 PM UTC

hiatus wrote: post #525

j-bos wrote: post #501

Earlier quoted context omitted.

Isn't that open and shut fraud on the part of ebay?

How is that fraud? Ebay is brokering a deal between two parties. It doesn't seem inherently fraudulent to offer differing prices to each party.

[deleted]

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#547

Post by hightrix » Wed, Oct 04, 2023, 11:17 PM UTC

slibhb wrote: post #423

Legality aside, I'm not sure that Amazon is winning in the long run with this strategy. I mostly buy products direct from the manufacturer these days and virtually all manufacturers have high quality websites with solid ordering experiences. As long as they have the name recognition, they can either sell for higher on Amazon and take the advertising hit or just ignore Amazon altogether. I continue to buy some stuff o…

> I'm not sure that Amazon is winning in the long run with this strategy

Completely agreed. Anecodotally, I used to shop on Amazon for things. As in, use the search function to find items to buy. These days, that is impossible. The only way to use Amazon today is to know exactly what you want, or for the item's value to be small enough that it doesn't matter (deoderant, ethernet cable, etc...).

It's quite frustrating to shop on the internet today. Google search sucks since SEO has made the results terrible. Amazon search is a frustrating mix of FANPOP brands and Amazon Basics. DDG, Brave, Bing, etc.. are all slightly better, but still very difficult to find anything genuine. Appending " reddit" to searches sometimes help, but the quality of reddit is quickly declining.

It seems like there is a significant opportunity for disruption in this space. The user experience sucks and prices are high. Sure, shipping is fast and free, but that doesn't help with product search.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#548

Post by jjk166 » Wed, Oct 04, 2023, 11:18 PM UTC

kube-system wrote: post #430

endisneigh wrote: post #162

Earlier quoted context omitted.

> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin? Sellers should stop using Amazon if they don't like their policies, and the issues will correct themsel…

The math absolutely does check out, lets say, for an addressable market of 100k purchasers: (and I'll be generous and I'll pretend Walmart has zero fees) Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000 Walmart: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $8,400 And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k *…

Walmart is not all-non amazon customers.

If Amazon's market share is 35%, then the non-amazon customers comprise the other 65% (which, being greater than 50%, constitutes "most").

Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000

Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 65%) = $78,000

If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share.

Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#549

Post by bbor » Wed, Oct 04, 2023, 11:22 PM UTC

alsetmusic wrote: post #544

MiddleEndian wrote: post #509

Earlier quoted context omitted.

https://www.cbsnews.com/news/investigation-ebay-employees-st... They also allegedly hired someone to stalk and harass a couple who posted negative reviews of them online.

That was supposedly rogue execs. Not taking their side, but I don’t think it was company policy.

This statement is very meaningful in our current society, but one I wish sounded as insane as it is. I hope more people will think about the basic dogma of corporatism in the coming years...

Re: The FTC sues to break up Amazon over an economy-wide “hidden tax”

#550

Post by simpaticoder » Wed, Oct 04, 2023, 11:25 PM UTC

alsetmusic wrote: post #542

simpaticoder wrote: post #499

Earlier quoted context omitted.

>There will be no site that does not offer advertising, because advertising allows the site to determine which sellers can afford to pay more while still being profitable. It's still possible that people exist who charge "what it's worth" rather than "what they can get". Those people can still make a fine living off of a two sided market place through flat transaction fees. Craigslist is an example that comes immedia…

Craigslist is a hell hole. I stopped selling there because even when I was practically giving electronics away (to prevent buyer’s remorse), people still emailed insultingly low offers. I just gave up on the site maybe five years ago.

CL has gotten much much worse over the last few years. So has FB Marketplace. Perhaps a hidden value of the payola approach is to avoid these outcomes. Or perhaps every marketplace declines like this. It may be that private secondary market online market is simply not a sustainable business. That would be unfortunate, but interesting.