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"Nate Sutton, associate general counsel at Amazon, told lawmakers the company doesn’t tap data from individual third-party merchants to determine what new products to create." https://www.cnbc.com/2019/07/16/amazon-tells-house-it-doesnt...
Ah, the hyper-specific dementi? Doesn't tap data from _individual_ third-party merchants.
The obligatory, "I'm shocked I tell you, shocked!" but unlike say the "Kirkland" brand at CostCo, this is more like UPS using the data it has on what is being delivered to peoples houses to start stocking their trucks with things people order often[1]. [1] Maybe the next step after food trucks is "mini-mart" trucks.
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> A law like this would have to be applied to them as well. You say it as if that was a bad thing. More competition is good for the consumer, bad for the oligopolists.
On the contrary, house brand products are great for consumers. Rather than having to figure out if they can trust a brand for a product category that they really don't care about, they can just buy the house brand knowing that a certain minimum level of quality exists. This is why Amazon Basics products are so popular on Amazon: consumers know that, at the very least, Amazon can be sued, a form of recourse that is no…
I’m not an Amazon fan boy, but I am a Costco fan boy, and they do the same thing, so I don’t really think I can be too upset about this. Retail is ruthless.
So I can sell my small company's products through Costco's web platform without Costco ever directly purchasing my product?
Stating the obvious I guess. All retailers do this and create their own white-label brands to squeeze profit from well-performing categories. Target, for instance, is very upfront about it and they have like a gazillion white-label brands that compete in hundreds of categories, which makes it very gray for the customer. Does anyone really think that any retailer launches a competing product in a category without look…
This is the same situation that happens on most platform plays. You can see this in how Salesforce and Shopify are leveraging their platforms to learn what is popular and produce/buy their own products to sell to their customers to capture 100% of the value, rather than 30% of the value of the solution to the customer.
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In this case it's shitty to be a supplier but isn't this great for the consumer?
In the short term it creates competition and lower priced products. In the long term, Amazon undercuts suppliers who have to exit the market. That reduces competition and allows Amazon to charge more.
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This comment is based on a misreading of the very testimony you're referencing. As quoted in this CNBC article. https://www.cnbc.com/2019/07/16/amazon-tells-house-it-doesnt... "Nate Sutton, associate general counsel at Amazon, told lawmakers the company doesn’t tap data from individual third-party merchants to determine what new products to create." Of course they don't use data from individuals, they use all of the…
Amazon has promised individual sellers it would not use the data for their products to market against them (not individual buyers). Despite the ludicrous lengths Amazon goes here to say there were multiple sellers and so this data was aggregate, we all understand (and amazon did too) that if you generate statistics such as median sale price per month / day etc where 99.95% of the data comes from one seller, you have…
Again, there's that word. Individual.
They get off on a technicality with that comment to congress. The second you have even 0.05% (Your example, not mine.) of any category occupied by a second reseller, you're no longer targeting individuals -- you're entering a 'product vertical'.
Amazon does exactly what you're claiming they do not.
The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior. You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.
We don't need laws to restrict one party from taking advantage of another in a deal... it just takes brains and some companies are using theirs to partner with other platforms or sell DTC(Direct To Consumer)