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To me the real problem isn't the size of Amazon's business, but rather the nature of it. Amazon is both the owner of the most successful and widely used market
by alex_young 9y ago
To me the real problem isn't the size of Amazon's business, but rather the nature of it.
Amazon is both the owner of the most successful and widely used marketplace, as well as a competitor of the merchants in that marketplace.
Having access to all of the transactional and user data, Amazon has an unarguable advantage over the rest of the merchants in it's market. They can beat anyone on price, placement, or delivery speed.
Barrier to entry into running a competitor market is effectively controlled by network effect. Simply running a competent customer service system and keeping prices within a certain range close to lowest provides an effective license to eternal profit.
Adding competing products when successful volumes are proven by their merchants gives them a very effective way to widen that profit on demand at the expense of their merchants and ultimately to the detriment of their customers who wind up paying more with less available selection.
- nolok 9y agoHow is that different that other big retailers ? I mean, any chain here (Carrefour, Auchan, Lidl, Aldi, ...) have their own products brand too from foods to clothes to electronics, to whatever, and they have the same advantage for them as amazon have for theirs. This has nothing special to do with amazon.
- IntronExon 9y agoSame with WalMart, Target, Trader Joe’s (which iirc is Aldi owned), Costco, and probably many I’m forgetting. Everyone who has a marketplace uses the opportunity to offer competing products.
- ABCLAW 9y agoThe control brand is not necessarily a retailer-owned brand. It is a control variable to determine the value delta that consumers ascribe to branded goods in the absence of quality difference.
- skookumchuck 9y agoEvery decade has its unstoppable juggernaut of a business, with endless articles pontificating that the government should step in and dismember them, and then some new business emerges that takes them apart, and the argument repeats itself.
- deleted 9y ago[deleted]
- akira2501 9y ago> They can beat anyone on price, placement, or delivery speed. Well.. except for OEMs.