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Amazon, the Brand Buster
- mmt 8y agoNotably absent in the anti-trust speculation is how the AmazonBasics brand does or doesn't get treated differently from other brands with respect to counterfeits (and other undesirable non-Amazon seller behavior, such as used items as new). AFAIK, Amazon prohibits third-party merchants from selling AmazonBasics, which would mean that the inventory-mingling problem, which has been discussed on other threads, wouldn't exist. That seems like pretty clear consumer harm.
- jasongill 8y agoCommingled inventory is an option for FBA sellers. You can disable it easily from your FBA account; I think at this point the "problem" is only for beginning sellers who aren't aware that it's on by default
- traek 8y agoSure, but it’s not an option for brands, which is the more relevant comparison here.
- jasongill 8y agoHow would commingled inventory have anything to do with brands? Brands can already protect their listings from 3rd party seller issues using Brand Registry / Brand Gating
- mmt 8y agoPossibly this option is too new or too poorly publicized to have had enough of an effect yet. It certainly hasn't been well-publicized as to how it works in practice, especially for a large brand. Do they opt-in or opt-out the sellers? Do they have to choose just one of those two models? For large brands, this brings up yet another antitrust concern. If they suppress the grey market (or even create too much friction for their authorized resellers), big brand manufacturers run the risk of running afoul of even the modern, more lenient antitrust law interpretation by pushing up consumer prices.
- mjcl 8y agoUntil it's an option for buyers, I'm going to be quite reluctant to buy from Amazon.
- jasongill 8y agoWhy? Commingled inventory means that some common, standardized items don't need a seller-specific barcode on them, and are just added to a "pool" of that identical product. It's better for consumers because you're getting the closest one of the item you ordered, faster - and at the (lower) price from the seller you selected. Aside from a couple high profile cases of sellers getting in trouble for inventory they never sent in being associated with them, it's a great benefit to consumers.
- nsnick 8y agoIt is not good for consumers. You buy from a particular seller because you know based on reviews that their item is not counterfeit and then amazon sends you the item from someone else and it is.
- jasongill 8y agoReceiving a counterfeit item must happen so very rarely, considering the (millions?) huge volume of these sales per day, and Amazon is obviously swift to fix the issue (much to the chagrin of sellers swept up by the zero tolerance rule) that I really doubt most consumers would ever receive a counterfeit item in this way. It seems more likely that consumers would buy the "cheaper" option from an FBA seller (perhaps unknowingly) and receive a knock off. The major logistical advantages outweigh the very low possibility of abuse. If you asked the average consumer if they would like to receive their item 2 days faster, but risk a 1 in 1000 chance that they get a bogus item they will need to exchange with Amazon at no cost, I think the former would win by a mile.
- CPLX 8y agoYou're wildly off base here. The chances of getting a counterfeit item in some product categories is basically 100%. Go ahead, try to buy a real pair of Apple iPhone corded headphones on Amazon. That assignment is quite literally impossible.
- mmt 8y agoAs sibling comments pointed out, the main problem is for the manufacturer/brand and for the buyer. An unscrupulous seller (of, for example, couterfeits) would benefit significantly and so would not disable the option. That Amazon themselves don't disable this option (for "shipped and sold by Amazon.com"), except, effectively, for their own brand, is the suspect anti-competitive practice.
- something2 8y agoAmazon also has something called Brand Registry. Essentially, if you can prove you own a brand, you can prevent other sellers from selling the same item. That's how most larger brands protect their listings.
- yjftsjthsd-h 8y agoIf that works, then why hasn't Apple done it and ended the scrounge of fake chargers? EDIT: Or Anker for that matter. Anker is a better example because their main business is chargers/batteries, so the should care a lot about branding and making sure there are no fake chargers under their name.
- ikeboy 8y agoThis is false, speaking from direct experience. Brand registry does NOT let you gate the brand.
- C7H8N4O2 8y agoAmazon's brand registry enables a verified brand to take control of a listing page (edit photos/text/title). That's pretty much it – no power to limit other sellers.
- ikeboy 8y agoThey don't actually honor it though. I know plenty of sellers who have gotten back inventory they didn't send in even though they do not choose commingling.
- fru2013 8y agoNon paywalled mirror http://archive.is/sRijg http://archive.is/sRijg
- bshepard 8y agoHow much do consumers pay in Bezos tax for goods on Amazon? i.e, if the site simply let consumers buy from Chinese manufacturers (which, in the end, is what much of Amazon is) without the fee to the owners of the marketplace (i.e, "Bezos Tax), how much cheaper would it be?
- volgo 8y agoWhile you're at it, might as well pick up your vegetables straight from the farm, your clothes straight from the factory, and eat your food straight from the restaurant kitchen top? It's value added service that brings convenience.
- omarchowdhury 8y agoFirst place for you to start to answer that question is to see how much it costs to sell on Amazon. https://services.amazon.com/selling/pricing.html https://services.amazon.com/selling/pricing.html
- pbreit 8y agoConsidering the downward pressure Amazon has had on prices, I would say the "Bezos Tax" is negative.
- akvadrako 8y agoOften I comparison shop between aliexpress.com and amazon.de. When the "brand" or equivalent quality product is on both, AliExpress is almost always cheaper, sometimes up to 50%. I would say on average 25% less and with free shipping even for small orders.
- pietroglyph 8y agoI think this illustrates the unfair advantage pretty well: https://www.amazon.com/s/&field-keywords=batteries https://www.amazon.com/s/&field-keywords=batteries
- User23 8y agoYou're right. It's absolutely unfair that Energizer is ripping customers off to the tune of 30%. Also wow this is terrible reporting. "Around 2009..." is it too much effort to find a real date?
- p1mrx 8y agoThe real ripoff is that none of the alkaline batteries have a mAh (or mWh) rating. They literally sell energetic cylinders without telling you how much energy's in them; how is this still a thing?
- tempay 8y agoGiving alkaline batteries a mAh rating is difficult as it is highly variable depending on the environment and load characteristics. You can find data sheets for the major manufactures on their websites for example: http://data.energizer.com/pdfs/en91.pdf http://data.energizer.com/pdfs/en91.pdf
- Theodores 8y agoThis could be solved much like how automobile 'miles per gallon' figures are given, there is the 'urban' cycle for city driving and the figures for 'highway' driving and then there is the 'combined cycle'. Everyone knows that in a month of Sundays you aren't going to get anything near that '54 mpg combined' figure shown on the sticker for that Prius but you will get more miles per gallon in that car rather than that GM dinosaur advertising '14 mpg combined'.
- graton 8y agoOn a somewhat related note: https://www.wsj.com/articles/demand-for-batteries-is-shrinking-yet-prices-keep-on-going-and-goingup-1523871000 https://www.wsj.com/articles/demand-for-batteries-is-shrinki... I was able to read it via a google search: https://www.google.com/search?q=duracell+energizer+high+prices https://www.google.com/search?q=duracell+energizer+high+pric... From the article: Shoppers are paying more for disposable batteries even though the proliferation of toys and consumer electronics powered by built-in rechargeable batteries has reduced U.S. demand. That is because the two biggest disposable-battery brands, Duracell and Energizer, control over three-quarters of the market. As both focus on profits, they are no longer offering deep discounts as they did when they were racing for market share. Batteries on average cost 8.2% more than a year ago, while prices in the overall household-care segment rose only 1.8%, according to Nielsen. At a time when prices are stagnating on everything from toilet paper to diapers, such pricing power for a product that is increasingly obsolete has confounded shoppers.
- dmoy 8y agoI don't get this argument. I just went to CVS and bought their white labeled lotion and some band aids, that were nearly identical in ingredients to the branded stuff sitting right next to it on the shelf. My soap at home is similarly target's in house stuff. Half the things I buy from Costco are Kirkland. Why do I do it? Because it's like half the price. Just like buying say AmazonBasics batteries vs Energizer.
- subpixel 8y agoThe argument isn't that Amazon is making things hard on consumers. It's that they are killing brands on a battlefield they control absolutely. Think of it from the brand perspective. CVS pays you to stock their product on their shelves, so while they compete with you, they also send you money every month regardless. On the other hand, you have to pay Amazon to include your products in their catalog. So while they compete with you, you pay them for the privilege. And everything you do to innovate, they steal.
- dmoy 8y agoRight I see the argument, but I don't get why it's a valid argument. I just don't get why this is news. Every retailer I've shopped at in the last year does this.
- hakfoo 8y agoI find, across the board, Amazon often feels like their incentives don't align with those of a customer. They're always trying to push Prime (and to a lesser extent their video and music service) which represents extra clicks to sale. It's a significant auto-renewing commitment, not a $5 casual impulse add-on-- repeatedly dangling it in front of me and hoping I misclick into it borders on a dark pattern. I'd love to see a big one-click "I am not interested do not bother me further" button. Everything about their checkout funnel is contrary to modern best practices. Fields are oddly arranged compared with most other ecommerce sites, and once you reach a certain point, the normal navigation disappears. I guess this is designed to trap the user with no way out but purchase, but it makes it harder to compare items, especially when you're trying to find out on shipping (see below). Shipping is a mess to deal with. "You need to spend $25 for free shipping, but these items don't count". "These items can ONLY be purchased with an order of other items that hit the free-shipping threshold." "These items can only be purchased with Prime." There's no easy "estimate shipping" button without going several pages into checkout. These sort of complexities probably are engineered to steer customers towards buying the items fulfilled by them to avoid the pitfalls. I'd also wonder if their brands "accidentally" do well because of how bad their product categorization is. Nobody else is selling AmazonBasics products, so the single listing gets all the ratings and sales volume. Meanwhile, the name brand has 30 slightly different poorly arranged listings all overlapped.
- nicodjimenez 8y agoI think this article is a little misguided. Sure, commodity products such as Duracell or cheap clothing companies might be in trouble, but such companies were weak brands in the first place. Their main appeal was low cost, good enough, and Amazon is just doing the whole low cost, good enough thing better than anyone. But high end brands like Apple, Nike, Louis Vuitton, Gucci, are not going anywhere, that's for sure!
- alfredallan1 8y agoNot immediately, no. 10 years back, Duracell seemed a very strong brand. All it is going to take for LVMH, etc. to start getting replaced is a new generation of online shoppers seeing Amazon house brands right next to these and subconsciously associating them together as brands of equal value.
- nicodjimenez 8y agoNot going to happen. High end conspicuous consumption products are well protected against Amazon. You can be a low end brand or a high end brand but you cannot be both.
- Spooky23 8y agoI would disagree. White label alkaline batteries are notoriously inconsistent in terms of capacity. AmazonBasics isn’t a white label, it’s a brand in of itself, with consistent quality.
- dimator 8y agoThe question is, if you wanted to start a cheaper, good-enough battery company, even cheaper than AmazonBasics, could you sell and compete on Amazon? Or would they still outposition you by hand holding customers directly to theirs? I'm fairly sure it's the latter.
- andyidsinga 8y agothe referenced article from Yale Law Journal is very interesting - and discuss amazon in context of anti-trust laws, what is wrong with those laws and some solutions. snip snip ( https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado... ) "in some ways, the story of Amazon’s sustained and growing dominance is also the story of changes in our antitrust laws. Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition. By this measure, Amazon has excelled; it has evaded government scrutiny in part through fervently devoting its business strategy and rhetoric to reducing prices for consumers. Amazon’s closest encounter with antitrust authorities was when the Justice Department sued other companies for teaming up against Amazon.23 It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them. With its missionary zeal for consumers, Amazon has marched toward monopoly by singing the tune of contemporary antitrust."
- mgiannopoulos 8y agoThis makes me want to buy some Amazon stock. :)
- glup 8y agoThis attitude makes me want to prosecute shareholders :)
- HarryHirsch 8y agoIt is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them What if that statement was correct? Bezos comes from D.E. Shaw, and it's known that the old sphinx takes the long view.
- andyidsinga 8y agoThat's quote is certainly alluring - My initial reaction was similar. On further thought, based on my experience working with general managers/executives, I suspect they were following their noses more than making any elaborate plans. A big advantage they had (and continue to have), was being embedded in a data rich software/online context AND the organizational drive to use it to their advantage.
- deleted 8y ago[deleted]
- anilshanbhag 8y agoNew York Times with its typical anti-capitalist spin. Amazon Basics doesn't sell because its Amazon or they used ‘Data That No One Else Has', it is simply the same product at a cheaper price. The same is true at Kirkland at Costco, Great Value at Walmart and Signature at Safeway/Albertsons. You can buy Signature batteries at Safeway. Brands clearly add a brand tax which is unjustified. They have larger distribution/scale than store brands, yet they charge more. Market forces are driving prices down and that is a good thing.
- partycoder 8y agoAmazon has full visibility over what is sold on their platform and can sell directly that directly without extensive market research. Same with ads. They know what the search terms are and how to exactly target those ads.
- karmaseed 8y agoIn India there's a new government rule that "no one entity can contribute more than 25 percent to the sales of an e-commerce platform".
- Zak 8y agoI'm a little surprised so many people still buy large numbers of alkaline batteries. NiMH rechargeables are readily available, have a fairly low cost to get started with a battery/charger bundle, save a significant amount of money over time and have vastly better performance in higher-drain devices like cameras and flashlights.
- moogly 8y agoMany devices can't deal with the lower voltage (1.2V vs 1.5V). About half of my AA/AAA devices don't work at all.
- 0xcde4c3db 8y agoMany rechargeables are also slightly larger than typical alkalines. This can cause them to be difficult to remove from devices where they're inserted end-on, such as flashlights and Xbox 360 controllers.
- Zak 8y agoThose devices must have very short runtimes on alkalines. Even a 0.2A load on an alkaline AA puts it under 1.2V for most of its discharge capacity[0]. That's not an especially high load; it's the amount that will drain it in 11 hours of use, but if the device quits at 1.2V, it will only run for 4.5 hours. It would not surprise me to learn that the designers of a consumer electronic device did a bad job, but I'd describe not working with 1.2V batteries when a device is intended for AA or AAA to be a pretty major design flaw. [0] https://lygte-info.dk/review/batteries2012/Amazon%20basic%20AA%20UK.html https://lygte-info.dk/review/batteries2012/Amazon%20basic%20...
- mmt 8y ago> it will only run for 4.5 hours That seems plenty long for something like a TV remote, if "run" includes the amount of time that buttons are depressed. > It would not surprise me This is inconsistent with your original comment that claims "a little surprise". Consumer behavior responds to actual products, not someone's standard of engineering design.
- DanCarvajal 8y agoAs someone who almost always buys generic brand from wherever I shop I'm pretty aloof to these complaints. Target, Walmart, and Costco all have in house brands. The Amazon brand "Goodthreads" Oxfords I wear to the office are very impressively well made for the price. Compared to the Target "Goodfellow & Co" ones at the same price there's a higher level of quality and finish. They're better than the Banana Republic ones I had at half the cost.
- tomjen3 8y agoI always do that with toilet paper, soap, etc. If Amazon kills brands, that is a great thing. If you need to wear expensive clothing to show how rich you are, donate 10k to the top ranked give well charity, buy a five dollar t-shirt and I will sew your reciept on it. Much more efficent than throwing more money on Raulph Lauren.
- tjr225 8y agoBranding isn't exclusively used by retail companies to signal wealth.
- snom380 8y agoI wear expensive clothing (without any visible branding) because I'm paying a company that pays fair wages to their workers and are working on reducing environmental footprint. Now that company isn't on Amazon, and I don't have a problem with Amazon selling their own brands, but if they end up making it more difficult for smaller companies to thrive, I consider it a negative.
- prolikewhoa 8y agoIf Amazon unfairly kills brands, aren't they getting rid of competition which would then allow them to raise prices, in the end hurting the consumer?
- abandonliberty 8y agoAmazon picks successful high margin items and knocks them off. https://www.seattletimes.com/business/amazonbasics-house-brand-flatters-competitors-but-theyre-not-fans/ https://www.seattletimes.com/business/amazonbasics-house-bra... https://www.amazon.com/Rain-Design-mStand-Laptop-Patented/dp/B000OOYECC/ https://www.amazon.com/Rain-Design-mStand-Laptop-Patented/dp... https://www.amazon.com/AmazonBasics-DSN-01750-SL-Laptop-Stand-Silver/dp/B00WRDS0AU https://www.amazon.com/AmazonBasics-DSN-01750-SL-Laptop-Stan... Interestingly though, the amazonbasics version doesn't hit the first page for laptop stands while the Rain version still does.
- civilitty 8y ago> Interestingly though, the amazonbasics version doesn't hit the first page for laptop stands while the Rain version still does. I'm curious, does this mean that Amazon doesn't prioritize their own products in the search algorithm? I've felt that in the past Amazon is usually ahead of the game on legal issues - like when they started collecting state sales taxes across the board, years before the Supreme Court ruling. Sooner or later, we're going to see court precedent and laws regulating search algorithms for anticompetitive behavior to supplement the more broad antitrust laws so maybe Amazon is keeping out of it to avoid any problems later. As an Amazon shopper, I've gotten used to the Amazon Basics icon and I'm sure that alone has marketing advantages over the Rain product entry.
- ikeboy 8y agoThey absolutely favor their own brands, often having an entire line called "our brands" with prominent placement.