The Amazon tax

In my defense, they started it. (I had purchased a stainless steel muffler with a lifetime warranty off of Amazon Auto, the thing was counterfeit, completely rusted through in less than a year, and Amazon would not honor their written warranty and I didn't care to fight it legally...)

So the next time they dropped my package off in my lobby when I have specific instructions to bring it to my front door? I never got it.

And unfortunately for them... it keeps happening now?

Like every other package that gets delivered?!

(They always believe this, apparently... either that, or their agreement with their delivery insurance services must eat the cost).

I've more than gotten my muffler refunded now and they're none the wiser, so win win really!

It of course also creates essentially perfect competition. Amazon will even tell you the top selling products across categories, so that no seller can make excess profits for long - others will quickly jump into the fray to compete that away.

This is of course the market working as intended - the sellers compete away any and all surplus. Normally that would be a good thing for consumers! Unfortunately the search ad tax is very real, and siphons off a good chunk of the surplus as monopolist rent.

This is all structural. A marketplace like this is a natural monopoly with massive network effects. And the allure of the search ad is irresistible - they literally can't not do it, lest their shareholders rebel.

Google ads work exactly the same way.

As a seller your only options are to either have better conversion economics than the competition (so you can win the ads bidding war - guess why every successful site on the internet is gameified to all hell, and why the amazon listing titles & descriptions look like they do) or to not play.

If you can create a viral hit for a product you can probably eke out excess profits for a few months - people want precisely your branded product and not a cheap knockoff, at least for a while.

("Excess profits" = anything above what will literally make the marginal seller say "it's not worth it", which is a very low bar when competing with the entire world)

This assertion lacks evidence. An alternate hypothesis: if you tried to sell literal garbage on Amazon, poor reviews and a high return rate will be visible in the product itself. The ad will earn you a click-through to the product, but buyers will begin to back out instead of following through with a purchase. Ad purchases cannot overcome insufficient revenue - it won't be profitable long-term.

Yes, Amazon has a problem with vendors buying good reviews as well. It doesn't overcome a high number of poor reviews, or a high number of returns.

> And second, Amazon (and Google before it) have an incentive to make their organic search results worse–giving producers more incentive to buy more ads.

Reeks of a conspiracy theory. Most customers simply don't have the time or energy to research any more than the top handful of results. Only a rare person goes 10 pages deep into the search results. Organic search results will produce less traffic when people don't even look at them. But that's not evidence in and of itself that the organic search results were nerfed in some way.

I hate to remind people of the basic truth about modern Amazon, but here goes: the vast majority of the inventory is made in China and the exact same product can be found at a tiny, tiny fraction of the Amazon price on AliExpress and similar sites. The value that Amazon adds is their logistic network that can deliver to domestic US addresses in a day or two, compared to weeks. The difference in price between Amazon and AliExpress justifies sellers spending enormous sums on ads and review purchases, because even if they do sell garbage on Amazon, enough people bought it at such ridiculous margins that the seller can tear down the product with the bad reviews and high return rate and re-offer it under a new brand with the same ad and review purchase strategy and still make a profit. But the person to blame for that is not Amazon, and it's not the seller, it's the fool who decides to pay the ridiculous price compared to the AliExpress price.

Books are one of the categories where they aren't printed in China, they're not sold on AliExpress, and searching for "seth godin the knot" returns the actual correct listing as the first organic search result. So I'm not sure why the author brings his book up as evidence. He might do better by reminding his publisher that "selling on Amazon" is not a homogenous experience and they ought to reconsider flushing money down the drain on advertisements they don't need.

It’s very easy to blame systems and other people.

Recently a nice wooden piece from a shop in Germany and an address sign for my yard from some place in the Midwest.

For some things you do see endless shops selling cheap Chinese imports.