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Could someone explain how is this different than a supermarket selling their own products, for example Walmart selling Colgate toothpaste and their own ‘equate’

Could someone explain how is this different than a supermarket selling their own products, for example Walmart selling Colgate toothpaste and their own ‘equate’ brand?

cenal 8y ago
No supermarket has had the scale and market share as Amazon. That makes their business practices fall under increased scrutiny.
- twblalock 8y ago
  Focusing on scale simply punishes success. It is better to focus on anti-competitive practices than to just look at scale and assume that big is bad. Otherwise the government is telling businesses that they should succeed up to a certain point, but should intentionally fail or handicap themselves after they reach that point in order to avoid being punished.
  - CPLX 8y ago
    Quantity has a quality all its own, as they say.
  - anoncake 8y ago
    Did the heading change? Right now it says "German cartel office investigates Amazon's treatment of small sellers", not "German cartel office investigates Amazon's size".
    - twblalock 8y ago
      I was responding to a parent comment that said Amazon's scale should make be treated differently than other companies.
      - anoncake 8y ago
        Other companies aren't allowed to abuse their markt-dominant position either. Small companies just generally don't have one.
  - TeMPOraL 8y ago
    > Otherwise the government is telling businesses that they should succeed up to a certain point That's the ultimate point, though. The reason why anti-competitive laws exist. The reason we like free markets on a societal level is that competition - where it happens - keeps the prices down, and prevents a single entity from having too much control over people (via prices and availability). We benefit from entrepreneurs playing the game, not winning the game. A total success on the market is a disaster for society (imagine e.g. Walmart being the only grocery store, or fully vertically integrated Unilever controlling food production).
cavanasm 8y ago
A third party company selling products to be sold in supermarkets is basically selling to the supermarket, not to the consumers (if the supermarket stocks their product and it doesn't sell, the supermarket won't keep putting it on the shelf). On Amazon, companies are selling to consumers and Amazon facilitates that process. If Amazon makes it harder for sellers of particular products that Amazon also sells, they can effectively force those sellers out of business. That being said, I'd be kind of surprised if Amazon really needed to sell at a loss for products Amazon is selling directly since Amazon has a massive advantage in scale.
- rlpb 8y ago
  > A third party company selling products to be sold in supermarkets is basically selling to the supermarket, not to the consumers (if the supermarket stocks their product and it doesn't sell, the supermarket won't keep putting it on the shelf). Do supermarket supplier contracts really work like this? I was under the impression that nowadays suppliers have to pay supermarkets for shelf space, take the risk themselves for low sales volumes (with agreements to buy back inventory), etc.
  - cavanasm 8y ago
    It's definitely an oversimplification on my part. Looks like it's a bit of both methods depending on scale and the particular product market. The suppliers compete with each other for shelf space via payments, and the supermarket sells the product at very close to cost (or at cost during sales), to the point where shelf space related payments are basically equal to profit for the market. https://www.bbc.com/news/business-29629742 https://www.bbc.com/news/business-29629742 Relating back to the initial part of the question, it seems like if suppliers are fighting over the "good spots" (the ends of the aisle or section), then the supermarket's branded products can safely fill in the gaps at lower prices (but much better margins), and still be profitable as long as they don't lose too much to waste.
  - sct202 8y ago
    Some things are based on scan based trade (consignment), but most products aren't sold like that at this time. It's hard to get vendors to agree to the terms unless they're given control over in-store execution, and it's a lot of set up/hassle to integrate systems. The products that scan based trade tends to be most common with are DSD where someone from that company stops by on a fairly regular basis to deliver or merchandise the product.

Could someone explain how is this different than a supermarket selling their own products, for example Walmart selling Colgate toothpaste and their own ‘equate’ brand?

cenal 8y ago

No supermarket has had the scale and market share as Amazon. That makes their business practices fall under increased scrutiny.

twblalock 8y ago
Focusing on scale simply punishes success. It is better to focus on anti-competitive practices than to just look at scale and assume that big is bad. Otherwise the government is telling businesses that they should succeed up to a certain point, but should intentionally fail or handicap themselves after they reach that point in order to avoid being punished.
- CPLX 8y ago
  Quantity has a quality all its own, as they say.
- anoncake 8y ago
  Did the heading change? Right now it says "German cartel office investigates Amazon's treatment of small sellers", not "German cartel office investigates Amazon's size".
  - twblalock 8y ago
    I was responding to a parent comment that said Amazon's scale should make be treated differently than other companies.
    - anoncake 8y ago
      Other companies aren't allowed to abuse their markt-dominant position either. Small companies just generally don't have one.
- TeMPOraL 8y ago
  > Otherwise the government is telling businesses that they should succeed up to a certain point That's the ultimate point, though. The reason why anti-competitive laws exist. The reason we like free markets on a societal level is that competition - where it happens - keeps the prices down, and prevents a single entity from having too much control over people (via prices and availability). We benefit from entrepreneurs playing the game, not winning the game. A total success on the market is a disaster for society (imagine e.g. Walmart being the only grocery store, or fully vertically integrated Unilever controlling food production).

cavanasm 8y ago

A third party company selling products to be sold in supermarkets is basically selling to the supermarket, not to the consumers (if the supermarket stocks their product and it doesn't sell, the supermarket won't keep putting it on the shelf). On Amazon, companies are selling to consumers and Amazon facilitates that process. If Amazon makes it harder for sellers of particular products that Amazon also sells, they can effectively force those sellers out of business. That being said, I'd be kind of surprised if Amazon really needed to sell at a loss for products Amazon is selling directly since Amazon has a massive advantage in scale.

rlpb 8y ago
> A third party company selling products to be sold in supermarkets is basically selling to the supermarket, not to the consumers (if the supermarket stocks their product and it doesn't sell, the supermarket won't keep putting it on the shelf). Do supermarket supplier contracts really work like this? I was under the impression that nowadays suppliers have to pay supermarkets for shelf space, take the risk themselves for low sales volumes (with agreements to buy back inventory), etc.
- cavanasm 8y ago
  It's definitely an oversimplification on my part. Looks like it's a bit of both methods depending on scale and the particular product market. The suppliers compete with each other for shelf space via payments, and the supermarket sells the product at very close to cost (or at cost during sales), to the point where shelf space related payments are basically equal to profit for the market. https://www.bbc.com/news/business-29629742 https://www.bbc.com/news/business-29629742 Relating back to the initial part of the question, it seems like if suppliers are fighting over the "good spots" (the ends of the aisle or section), then the supermarket's branded products can safely fill in the gaps at lower prices (but much better margins), and still be profitable as long as they don't lose too much to waste.
- sct202 8y ago
  Some things are based on scan based trade (consignment), but most products aren't sold like that at this time. It's hard to get vendors to agree to the terms unless they're given control over in-store execution, and it's a lot of set up/hassle to integrate systems. The products that scan based trade tends to be most common with are DSD where someone from that company stops by on a fairly regular basis to deliver or merchandise the product.