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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

#81

Post by thaumasiotes »

BenjiWiebe wrote: post #77
thaumasiotes wrote: post #65

Earlier quoted context omitted.

Just to be clear, the difference from wholesaling is that in your example, Amazon has the right to set your prices, but it doesn't buy anything from you? If Amazon actually buys your cat mugs, and then prices them higher than its own cat mugs, such that customers buy Amazon mugs and don't buy your mugs, you still sold all your mugs and there would seem to be no problem.

You sold that batch of mugs, but that's it.

Nope. You still have the right to price your own future batches of mugs.

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

#82

Post by daemoens »

blocked_again wrote: post #60
bo1024 wrote: post #44

Earlier quoted context omitted.

It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amaz…

Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.

They raised the price of his goods so that they could sell their own product for cheaper.

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

#83

Post by upsidesinclude »

yazaddaruvala wrote: post #33

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit,…

No post body was provided.

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

#84

Post by pstrateman »

ISL wrote: post #45
throw_nbvc1234 wrote: post #38

In case others were as confused as i was about this "While they’re often confused, Sold by Amazon and Fulfilled by Amazon are two different things. With SBA, Amazon prices your products and owns any transactions that take place. When an item sells, they pass the proceeds on to you for allowing them to sell your product. With FBA, you price your products and own the transactions. It is a service where Amazon handles t…

I'm extra confused, as I'd interpreted "Ships from and sold by Amazon" as "Amazon supplied the goods and will vouch for their validity", whereas "Sold by ISL" would have meant that ISL was on the ultimate hook should the goods prove to be counterfeit. Learn something new (and important) every day.

Sold by Amazon and Fulfilled by Amazon seem to come out of the same box at the warehouse.

Unfortunately if you really need genuine products you simply cannot buy things off Amazon anymore.

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

#85

Post by ineedasername »

thaumasiotes wrote: post #65
clintonc wrote: post #53

Earlier quoted context omitted.

I am Amazon, and you sell cat mugs. I offer you a "sold by Amazon" contract, which you accept. I start manufacturing my own cat mugs, and sell them at a price that undercuts yours. You have no way to change your price, so your mugs no longer compete effectively with Amazon cat mugs. Most of your sales go away, because Amazon is so dominant as an online marketplace (NOT as a cat mug manufacturer). This is anti-competi…

Just to be clear, the difference from wholesaling is that in your example, Amazon has the right to set your prices, but it doesn't buy anything from you? If Amazon actually buys your cat mugs, and then prices them higher than its own cat mugs, such that customers buy Amazon mugs and don't buy your mugs, you still sold all your mugs and there would seem to be no problem.

But the vendor agrees to let Amazon set their prices in return for, essentially, being an Amazon-sponsored product. The vendor doesn't have to participate, in which case it can still set its own prices.

I can see the argument that it's price fixing if Amazon & the 3rd party both agree to sell at the same price, but even then I'm not sure it's anti-competitive or anti-trust when some other 3rd party can come in, see the higher prices, and decide to undercut them. Not unless Amazon get's all sellers of a product to agree, but the article doesn't directly allege that.

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

#86

Post by bee_rider »

blocked_again wrote: post #60
bo1024 wrote: post #44

Earlier quoted context omitted.

It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amaz…

Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.

Our system is not a totally free market, we have consumer protection and antitrust regulations to avoid some of the possible negative outcomes there.

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

#87

Post by judge2020 »

valar_m wrote: post #9

Former Amazonian here. When i was there, they made us take this antitrust training course that had things like "don't use terms like 'market share' in internal communications", but all along there were people doing this? I mean...

This is standard procedure among any large company in a market. Ideally, antitrust should be proven by actions and not by “see! Your employees say you dominate the market! Take that!”

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

#88

Post by blocked_again »

daemoens wrote: post #82
blocked_again wrote: post #60

Earlier quoted context omitted.

Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.

They raised the price of his goods so that they could sell their own product for cheaper.

They did bought the goods from him beforehand. And he agreed to sell. He should have considered the possibility that Amazon has option to later sell the items as a higher price. Isn't that obvious to any seller?

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

#89

Post by cmroanirgo »

bo1024 wrote: post #44
yazaddaruvala wrote: post #33

I'm confused why this is anti-trust. Isn't this how all wholesale vendor deals work? Regular wholesale: "We'll buy 200 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it". Amazon in this example: "We'll buy 1 units from you at $20 each. I'll sell them for some other amount, you don't need to care about it. Finally, don't worry about the wholesale rate for a single unit,…

It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amaz…

"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 becomes the wholesaler.

It's pretty nasty.

It happened to my family business. A big box chain sold the same products for less than their buy price. We were close friends with the wholesaler ( a timber mill), and the sales rep even went to the big box to get them to lift their price.

2 years after shutting us down, the big box store sells the same product, from the same source, for 50% more than we ever used to sell it for.

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

#90

Post by ohelabs »

blocked_again wrote: post #60
bo1024 wrote: post #44

Earlier quoted context omitted.

It sounded to me like the problem part was where Amazon sold competing products, then used the agreement to price-fix between their own products and the third party's. Example: Amazon sells a dongle for $20, the competitors sell them for $20. Amazon makes a deal with each competitor, then raises all the prices to $25. (edit) I think this kind of example also: The competitor's dongle is priced at $24 on Best Buy. Amaz…

Well, the competitor did agree to sell the items to Amazon. Nobody forced them. They did it for economic benefit. So I don't understand the problem here.

This is anti trust because it’s probably in violation of the sherman act and price fixing.

The anti trust laws are designed to prevent monopolies and promote competition… as Amazon is acting as the market here and simultaneously fixing prices and discouraging competition with them thats a no-no

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