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"Predatory pricing to push companies out of business is absolutely illegal" It's impossible to prove in most cases because it may have nothing to do with inten

"Predatory pricing to push companies out of business is absolutely illegal" It's impossible to prove in most cases because it may have nothing to do with intent. Amazon's advantage in 'groceries' is inherently structural. They can sell bananas for 10 cents less than Safeway because their opex may be subsidized, or they can transport cheaper, not 'because they are acting predatorily'. The nature of this value chain overlap is inherently problematic. The thought of 'putting grocery chains out of business using surpluses from AWS' never has to even cross Bezo's mind, or the minds of anyone in the entirety of Amazon. It can happen due simply to structural issues. For much the same way, it's impossible to have a free trade deal with China, so long as they have political controlled financial system and currency. 'Dumping' will be an artifact of the system as a whole. Nobody even needs to think it for it to happen.

basch 8y ago
I really like Stratechery's analysis of Whole Foods as an amazon customer. https://stratechery.com/2017/amazons-new-customer/ https://stratechery.com/2017/amazons-new-customer/ specifcally https://stratechery.com/wp-content/uploads/2017/06/stratechery-Year-One-270.png https://stratechery.com/wp-content/uploads/2017/06/strateche... In this model, Amazon WANTS grocery stores to stick around, and buy groceries from Amazon wholesale grocery. The same way that amazon wants AWS to be everyones platform, and for their business to flourish.
- sonnyblarney 8y ago
  Yes, in that model, they want 'other grocery makers to exist' But Amazon is going to open a regular grocery store chain soon, so it won't be just Whole Foods. What Amazon 'wants' is to make money. If they can control all of the food distribution in the US, they will make not only all the profits from that market - they'll make a 'monopolizers surplus' from having the power to charge higher prices in the long run. That cash-cow is much bigger than the partial cash-cow of owning only an intermediary layer.

basch 8y ago

I really like Stratechery's analysis of Whole Foods as an amazon customer. https://stratechery.com/2017/amazons-new-customer/ https://stratechery.com/2017/amazons-new-customer/ specifcally https://stratechery.com/wp-content/uploads/2017/06/stratechery-Year-One-270.png https://stratechery.com/wp-content/uploads/2017/06/strateche... In this model, Amazon WANTS grocery stores to stick around, and buy groceries from Amazon wholesale grocery. The same way that amazon wants AWS to be everyones platform, and for their business to flourish.

sonnyblarney 8y ago
Yes, in that model, they want 'other grocery makers to exist' But Amazon is going to open a regular grocery store chain soon, so it won't be just Whole Foods. What Amazon 'wants' is to make money. If they can control all of the food distribution in the US, they will make not only all the profits from that market - they'll make a 'monopolizers surplus' from having the power to charge higher prices in the long run. That cash-cow is much bigger than the partial cash-cow of owning only an intermediary layer.