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New unsealed records reveal Amazon's price-fixing tactics, California AG claims

theguardian.com

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Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#71

Earlier quoted context omitted.

> if each channel was allowed to set their own price, you'd end up with brick and mortar stores doing a lot of showrooming and then online stores gaining the bulk of sales because they're cheaper (because their overhead is low). Um... and? That's quite literally "the market working as intended" and while I am not a free-market apologist by any stretch, that seems to be a rather benign effect. What makes MAP especiall…

The problem with "the market working as intended" is you get unfortunate second-order effects. The brick-and-mortar is providing a valuable service by letting you browse, try things on for fit and style, feel the material, and hypothetically by curating products and trying to engender trust in their curation, only selling things of at least passable quality (some more than others). Historically, you only paid for tha…

+1 to this. I was around for the 90s and early 2000s to see when MAP wasn't tightly controlled by the brands; the B&M stores got destroyed because they simply couldn't price-compete because their footprint was way more expensive.

I do think that by not having physical stores, it directly/indirectly promoted a decline of product quality as well as misrepresentation of product, with Wish and Temu kinda exemplifying that to an extreme. Price differentiation is way greater now which I guess is a net positive to the consumer.

As a brand owner of midtier kitchen products (cheaper versions of designer OXOish products, but more expensive than your baseline Walmart stuff), our products look visually similar enough to both ends of quality, but shines more when a person gets to interact with the items themselves, feel the product texture, press the lever action, etc. So I do value B&M for their place in the economy and want to make sure they can have some margin (even though I'm selling the same thing in my Amazon store and Shopify and can make more money there).

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#72
post #21

Earlier quoted context omitted.

> Lots of retailers (both physical & online) have similar requirements My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary. > many manufacturers have similar requirements That is a different situation, and is AFAICT legal in th…

Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?

If amazon was just ranking by price, that would be fine. But the described behaviour implies that they would derank a listing even if it was the cheapest option because it was made available by the same seller for cheaper elsewhere.

This kind of thing is ultimately bad for customers because it reduces competition between sales outlets, by making it very difficult for smaller players to compete on price.

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#73

Earlier quoted context omitted.

I literally don't get it. You're interested in Quality above all else, fine. You're upset that you have competitors who don't care about Quality, fine. So you make your website harder to use, so that... what?

Don't ask me. I'm not in Marketing. I was just sharing my experience. But it's not the manufacturers that do that. It's the cheap-slingers. It's their Web site that has the "click to reveal price" button.

Oh! I see, that makes much more sense.

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#74
post #21

Earlier quoted context omitted.

> Lots of retailers (both physical & online) have similar requirements My understanding (IANAL) is that that is illegal, and those retailers should be prosecuted as well. That is essentially price fixing, because the retailer is enforcing their competitors have the same price, using the supplier as an intermediary. > many manufacturers have similar requirements That is a different situation, and is AFAICT legal in th…

Is that actually bad for consumers? Wouldn't deranking the "not lowest" price make it easier for customers to find the lowest price (whether that is a different product on the same storefront, or the same product on a different storefront), and hence be good for customers?

As described in the OP, sellers didn't respond to this pressure by lowering prices on Amazon, they raised praises at other retailers. So the effect is to raise prices overall.

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#75
post #53

Earlier quoted context omitted.

I mean, 1-2 day shipping is a huge part of their consumer-first policy, which is why every seller has got to do FBA -- for the longest time until COVID, the algorithm heavily penalized FBM fulfilled by merchant from ranking in the search results. Once FBA started failing during COVID due to warehouse restrictions + sellers and 3PL third party logistics centers really stepped up did FBM even become a thing (and Amazon…

It can be 1 or 2 day shipping. That's normally what I get at my house in Ohio. But it can also be a lot faster. I took a trip to Tampa not so long ago for a few days to hang out with an old friend who I don't see very often, and also to help him with a long list of technical stuff around his house. I flew down in cattle class with no luggage, which meant that I didn't get to bring anything in terms of tools or materi…

exactly, and as a result you ended up paying 2-3x more for all those tools than if other businesses were allowed to compete normally

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#76
post #53

Earlier quoted context omitted.

It can be 1 or 2 day shipping. That's normally what I get at my house in Ohio. But it can also be a lot faster. I took a trip to Tampa not so long ago for a few days to hang out with an old friend who I don't see very often, and also to help him with a long list of technical stuff around his house. I flew down in cattle class with no luggage, which meant that I didn't get to bring anything in terms of tools or materi…

exactly, and as a result you ended up paying 2-3x more for all those tools than if other businesses were allowed to compete normally

Eh?

I didn't address that specifically, but the prices were OK. They were within a sensible range of what local shops were charging for the same/similar widgets.

Sometimes Amazon was a bit more expensive (and they brought it over today). Sometimes, it was even a bit cheaper (and they still brought it over today).

The price was fine. It certainly wasn't 2x or 3x. It was always an OK price.

(Remember: Over and over again, I kept checking local stores. I didn't make that part of the story up. I didn't make any other part up, either.)

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#77
post #76

Earlier quoted context omitted.

exactly, and as a result you ended up paying 2-3x more for all those tools than if other businesses were allowed to compete normally

Eh? I didn't address that specifically, but the prices were OK. They were within a sensible range of what local shops were charging for the same/similar widgets. Sometimes Amazon was a bit more expensive (and they brought it over today). Sometimes, it was even a bit cheaper (and they still brought it over today). The price was fine. It certainly wasn't 2x or 3x. It was always an OK price. (Remember: Over and over aga…

correct, amazon's policies made it impossible for local stores to offer a deal, making sure you pay the 2-3x inflated sum no matter where you go, instead of what the real cost would be if fair competition were allowed

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#78

Long-time Amazon seller/brand here, so here's the crux of the case: 1. Amazon is a search engine for product 2. It values being the cheapest destination for products (MFN most favored nation clause to sell on their website), and basically will suppress your listings from search if they can find you selling it cheaper elsewhere. 3. Amazon is def one of the more expensive ecom channels to sell, BUT they've got a huge a…

I order from Amazon because of their logistics. For some reason Amazon can ship for free at the same price as the producer's Shopify page that wants to charge me insane shipping because I live in a remote location. Yes, I understand the price fixing is why they aren't selling for less on their own site, but Amazon's superpower is logistics, not years of goodwill and brand loyalty.

Along that line: I know that Lowe's, Home Depot, Chewy etc ship to me with speed matching or beating Amazon's (at least above a minimum purchase), so if what I'm buying is sold by those companies, Amazon does not get that sale.

Amazon is hugely anti-competitive, but their moat can be surprisingly shallow in some areas.

What Amazon has shown the rest of the industry is that shipping matters. Others are learning, at their own pace.

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#79

Earlier quoted context omitted.

I’d be ok with civil asset forfeiture for corporate officers

Are you serious? That sort of inequality under the law for people we don't like is literally how we got here, both in terms of civil asset forfeiture as it currently exists and all the precedents that bigco legal teams can leverage to make the law apply differently for them. "I'd be ok with civil asset forfeiture for drug traffickers/dealers" -The 1980s equivalent of you

We can’t have a death penalty for corporations (because economy and jobs and too big to fail) so there needs to be something to put the fear of god into them.

And when CAF is found to be too draconian for rich people maybe there will finally be the political will to do away with it totally.

Re: New unsealed records reveal Amazon's price-fixing tactics, California AG claims

#80
post #76

Earlier quoted context omitted.

Eh? I didn't address that specifically, but the prices were OK. They were within a sensible range of what local shops were charging for the same/similar widgets. Sometimes Amazon was a bit more expensive (and they brought it over today). Sometimes, it was even a bit cheaper (and they still brought it over today). The price was fine. It certainly wasn't 2x or 3x. It was always an OK price. (Remember: Over and over aga…

correct, amazon's policies made it impossible for local stores to offer a deal, making sure you pay the 2-3x inflated sum no matter where you go, instead of what the real cost would be if fair competition were allowed

I'm not sure if your point is that Amazon's price is too high (as you previously stated), or if your point is that Amazon's price is too low (as you've now stated).

But I am sure that I cannot accept both of these things being true at the same time.

What are you on about?

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