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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

#231

Post by Permit »

snow_mac wrote: post #227

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make th…

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold.

For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

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

#232

Post by jwong_ »

thaumasiotes wrote: post #74
function_seven wrote: post #31

Earlier quoted context omitted.

Why the all-caps brands for these? Is there some belief that it stands out more or something? Because it does, and not in a good way. I skip all those when I'm browsing search results.

> Why the all-caps brands for these? Is there some belief that it stands out more or something? In some cases it may be the only thing the person knows how to do. When I texted something to the person who recorded my electricity meter in Shanghai, I got back the response "哈哈，THANKS".

They are most likely not switching language in their phone - you can see it with the full width punctuation. In Chinese mode, typing English is a little annoying to get case right. A lot of Chinese people don’t differentiate between case also.

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

#233

Post by Closi »

addaon wrote: post #114
dannyw wrote: post #103

Earlier quoted context omitted.

To be specific, Amazon co-mingles inventory between Amazon, Sold by Amazon, and its third party sellers that are Fulfilled by Amazon. It doesn't matter who you buy from. The picker at the warehouse picks from the same box, the actual product could come from any seller, even if it's "Sold by Amazon". Who you purchase from is purely an accounting thing, unless they manage their own stock and is not part of Prime. If yo…

They don't co-mingle inventory on everything, it varies from product to product (although the majority are indeed co-mingled). While there's no visible way to tell if a product is co-mingled, Amazon support is able to look it up. Whenever I'm buying an item that I would be unhappy with a counterfeit (so anything expensive, electronic, or that goes in my mouth or body) I contact Amazon support by live chat and ask the…

“Co-mingling” doesn’t somehow make counterfeiting easier - Amazon uses chaotic storage such that more than one sku-receipt will never go into the same pickface (co-mingling isn’t talking about mixing the same SKUs together, it’s mixing all SKUs together but tracking them by location).

Amazon can still locate all products of a particular SKU received from vendor X on a particular date, or know what receipt your sale was from.

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

#234

Post by Zenst »

I wonder how this will play out globally as nationwide is just one nation and not Worldwide.

Certainly be interesting how this plays out and did have a quick dig too see if the EU is, or has anything in the pipeline, though nothing jumping out.

As for my country (UK), I did find this - https://www.gov.uk/government/case-studies/online-sellers-pr...

So this is a story that will ripple and certainly, thanks to Washington states work, there is a smoking gun.

Will Amazon proactively get on top of this Worldwide in other countries will be most telling.

But one aspect of companies doing wrong by consumers and respective authorities fining them that always irks me - the consumers who suffered and paid the price never get a slice of those fines. That and fines of large companies has in all effect, become a revenue stream for respective government's with the consumer getting justice in name only and the government's coining it, in effect at the expense of the consumers. Be those consumers of suffered such bad company practices, or future customers who will be paying indirectly for such fines.

After all, will they force Amazon to dig in and compensate effected/impacted consumers of such price-fixing? That would be nice. Equally, be nice if Amazon in good faith did the right thing by those impacted. One can but dream and hope.

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

#235

Post by katbyte »

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.

Personally I have a list I go down the more critical a component is. Amazon if it doesn’t really matter. Then newegg/Best Buy. Then b+h.

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

#236

Post by bryanrasmussen »

Permit wrote: post #231
snow_mac wrote: post #227

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make th…

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

It's somewhat similar in books IIRC, if the books don't sell you send back covers of the books and get reimbursed? (based on info from 20 years ago, pretty static industry so probably still the same)

on edit: of course book stores don't compete with publishers.

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

#237

Post by moate »

Permit wrote: post #231
snow_mac wrote: post #227

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make th…

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

Depending on the retailer, yes.

There are a few different models. What you're describing (stocking a product owned by another entity and giving them a cut of the sale price) is frequently known as consignment. It has minimal risk for the retailer, and typically involves non-perishable goods (clothes, electronics, etc).

Other retailers purchase the product at a discounted price from another entity and then sell it at their location for a higher price. This is the wholesale model where a producer is selling so much product to a retailer that they'll give them a discount on the price.

Wholesaling comes in 2 main forms: As described above, or "buyback". With a buyback contract, risk is shifted back onto the producer, as any unsold stock at the end of the contract term is "bought back" by the producer, typically at price they sold it to the retailer (possibly minus stocking/shipping fees).

I have no idea how the specific places you mentioned run their shops, but having been involved with several companies that produce physical goods for market, it's VERY common to sell to major retailers, and not just run consignment contracts (in fact, we ran VERY quickly away from anyone offering such deals because we would have to tie up inventory on their shelves that we may never be paid for).

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

#238

Post by reilly3000 »

Permit wrote: post #231
snow_mac wrote: post #227

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make th…

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

I don’t think that they are really in the consignment business. Its more that they do small orders in test markets and measure turnover carefully, negotiate suppliers down HARD, and cut them off if sales don't happen. They may have a return clause in their contract too, but usually the sale is final… hence markdowns/closeouts.

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

#239

Post by KingMachiavelli »

Permit wrote: post #231
snow_mac wrote: post #227

One thing everyone is getting hung up on is the fact that Amazon isn't wholesaling the dongle. The contract isn't a wholesale deal, meaning if your widget doesn't sell, it's sitting on your balance sheet, not on Amazon's balance sheet. It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. Then they figured out how to make th…

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

It is exactly how it works for physical retailers. In most cases, they even delay payment for a few months to account for returns and the cost of returning unsold products.

Costco, to my knowledge, is actually one of the more strict retailers with IIRC 6 month delay between a product sale and the vendor being played. Mostly due to their generous return policy.

I don't know of any large retailer that eats the cost of unsold goods. It's typically the retailers who pressure the supplier/brand into offering discounts and coupons in order to keep product moving.

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

#240

Post by moate »

bryanrasmussen wrote: post #236
Permit wrote: post #231

Earlier quoted context omitted.

> It would be like if Costco instead of buying 1000 legos, just stocked legos in it's warehouse, then paid Lego company everytime a single unit sold. For some reason I was under the impression that this is exactly how it works at some physical retailers? Can someone confirm that this is not the case? Does Costco/Walmart/CVS/etc. eat the cost if the items don’t sell?

It's somewhat similar in books IIRC, if the books don't sell you send back covers of the books and get reimbursed? (based on info from 20 years ago, pretty static industry so probably still the same) on edit: of course book stores don't compete with publishers.

Not all industries have buybacks, and many producers won't take on contracts that involve them.

(Fun Fact for anyone not familiar with this practice: in publishing the covers were shipped back as the proof because whole books are heavy/costly to ship and take up a lot of space/costly to warehouse so the retailer with them on hand would just have the rest of the book pulped).

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