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Washington state shuts down Amazon price-fixing program nationwide

atg.wa.gov

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Re: Washington state shuts down Amazon price-fixing program nationwide

#211

Post by YeBanKo »

granzymes wrote: post #173
fragmede wrote: post #154

Earlier quoted context omitted.

It's more nefarious than simple loss-leadering and undercutting your competitor's margins. That's business 101. Amazon is playing business 201. Amazon took over pricing for the widget, and then undercut that price with their own. Stay with me for a second because 201 is kinda complicated. Widget usually sells for $25. Amazon agrees to buy 1 from you at $20 (you give them a volume discount because it's Amazon buying s…

Is there any evidence this happened? It seems like companies would simply leave the "sold by Amazon" program, and quickly.

Its actually right in the posted link:

The “Sold by Amazon” program resulted in prices for some products increasing when Amazon programmed its pricing algorithm to match the prices that certain external retailers offer to online consumers.

As a result, when prices increased, some sellers experienced a marked decline in the sales and resulting profits from products enrolled in the program. Faced with price increases, online customers sometimes opted to buy Amazon’s own branded products — particularly its private label products. This resulted in Amazon maximizing its own profits regardless of whether consumers paid a higher price for sales of products enrolled in the “Sold by Amazon” program or settled for buying the same or similar product offered through Amazon.

Re: Washington state shuts down Amazon price-fixing program nationwide

#212

Post by erik_seaberg »

fragmede wrote: post #154
cmroanirgo wrote: post #89

Earlier quoted context omitted.

"Loss Leader" is the term and the problem. A wholesaler sells to a reseller at their usual price. Reseller deliberately sells less than RRP & sometimes less than their buy price. It's a good way to guarantee the reseller "owns" the market. Then, if the reseller is big enough and has captured the market, has the leverage to tell the wholesaler to lower the wholesale price and/or the reseller gets it made elsewhere and…

It's more nefarious than simple loss-leadering and undercutting your competitor's margins. That's business 101. Amazon is playing business 201. Amazon took over pricing for the widget, and then undercut that price with their own. Stay with me for a second because 201 is kinda complicated. Widget usually sells for $25. Amazon agrees to buy 1 from you at $20 (you give them a volume discount because it's Amazon buying s…

That sounds like pretty normal branding. I can get a powered hub for $20 from BUNCHALETTERZ who will disappear without a trace next quarter, or $35 from Anker that I’m pretty sure won’t burn down my apartment.

Re: Washington state shuts down Amazon price-fixing program nationwide

#213

Post by efitz »

$2.5 million is just over a half hour (33.6 min) of net sales reported on Amazon's 2020 annual report, or put another way, 0.0006% of net sales. I don't understand why the WA state attorney general considers that any sort of punishment.

I'm not anti-Amazon and don't even understand the alleged bad behavior. My point is that if governments want any corporation to behave, then the punishment has to be enough to deter future bad behavior. I don't see how this crosses the threshold where the corporation even cares about fines like this.

Now if courts start imposing fines/settlements/whatever that are double digit percentages of net sales, then I'd bet corporations would care deeply about it and start training their executives how not to be evil, and HBR would write articles about renewing ethics in corporations, and consultants would start offering ethical business practice training, etc.

Re: Washington state shuts down Amazon price-fixing program nationwide

#214

Post by kylebyproxy »

p1necone wrote: post #155
blocked_again wrote: post #92

Earlier quoted context omitted.

I don't really buy that consumer protection and antitrust regulations actually result in a better free market. I think the market is better off doing it's thing rather than a bunch of politicians trying to make it more efficient.

Do you want a single megacorp ruling the world? Because this is how you get a single megacorp ruling the world.

Depends. Is it a worker cooperative that employs everyone?

Re: Washington state shuts down Amazon price-fixing program nationwide

#215

Post by [deleted] »

colanderman wrote: post #183
addaon wrote: post #149

Earlier quoted context omitted.

It takes a minute, they often have the best price, and vetting a new vendor -- with their own unknown challenges -- is non-trivial.

B&H and Adorama are increasingly my go-tos for anything with microchips. They've both branched out from photography to A/V gear to tech goods generally.

[deleted]

Re: Washington state shuts down Amazon price-fixing program nationwide

#216

Post by YeBanKo »

bondolo wrote: post #120

I feel mixed about this because "sold by Amazon" meant that if there was a problem I got to deal with Amazon customer service rather than trying to get service from some Joe with a mailbox 3rd-party reseller. Yes, I often knew I was paying more and explicitly chose the SBA option as a loss-risk reduction strategy.

Amazon can still sell on their own. They just can’t enter into a price matching agreement with 3rd party sellers any more.

Re: Washington state shuts down Amazon price-fixing program nationwide

#217

Post by TehCorwiz »

erik_seaberg wrote: post #212
fragmede wrote: post #154

Earlier quoted context omitted.

It's more nefarious than simple loss-leadering and undercutting your competitor's margins. That's business 101. Amazon is playing business 201. Amazon took over pricing for the widget, and then undercut that price with their own. Stay with me for a second because 201 is kinda complicated. Widget usually sells for $25. Amazon agrees to buy 1 from you at $20 (you give them a volume discount because it's Amazon buying s…

That sounds like pretty normal branding. I can get a powered hub for $20 from BUNCHALETTERZ who will disappear without a trace next quarter, or $35 from Anker that I’m pretty sure won’t burn down my apartment.

Yeah, but normally your competitor doesn't get to choose the price of YOUR widget.

Re: Washington state shuts down Amazon price-fixing program nationwide

#219

Post by refurb »

Firmwarrior wrote: post #188
Spooky23 wrote: post #178

Earlier quoted context omitted.

How do you know? Some of the fake stuff is pretty good. Would you notice if your energizer batteries were random Chinese fakes? The first fake I discovered on amazon was a mouse trap of all things.

+1 to this My friends and I all bought fake Bose headphones from a shady dealer in China (in person), and the $50 knockoffs sounded exactly as good as the real $600 ones. The only way to tell there was anything wrong was by the fact that they all broke down within a few months.

So one thing to keep in mind is there is a lot of “leakage” out of genuine products manufacturer in China and SE Asia.

Workers will “divert” product from factories (or almost) finished product and sell on the side.

I’ve heard this is a big issue with clothing manufacturers.

Of course determining whether it’s actually counterfeit or just diverted product is likely impossible at the point of purchase.

Re: Washington state shuts down Amazon price-fixing program nationwide

#220

Post by geoduck14 »

8ytecoder wrote: post #203
bytelines wrote: post #193

Earlier quoted context omitted.

> This is true always, which is why the advice this person got is also commonly given in lots of forms. For example, doctors are often trained in being careful in what they write down for the same reason. Alternative take: it is indeed for the same reason - to avoid incriminating yourself. You carry assumption that the behavior is not incriminating. Doctors do commit in malpractice. Companies do engage in monopolisti…

Not to defend corporations, but they do. It’s repeatedly drilled down in you to reach out to the legal dept. That said companies care a lot about the legality of things and not necessarily the morality. And they hire people who would “get things done”. Consequently converting the legal training to “how to avoid to getting caught” training.

>That said companies care a lot about the legality of things and not necessarily the morality.

I worked for a fortune 100 company. We are humans, and our customers are humans. We absolutely have morals - at an individual level, and those morals influence how we work

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