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Walmart, Kroger, Walgreens and Costco are not marketplaces, they're retailers, and they have contracts with suppliers and pay distributors to purchase goods to

Walmart, Kroger, Walgreens and Costco are not marketplaces, they're retailers, and they have contracts with suppliers and pay distributors to purchase goods to resell to consumers. Amazon is a marketplace where any retailer can list their goods for sale. I believe Warren's argument is that Amazon is abusing their position as the marketplace platform owner by listing their own goods at prices that undercut marketplace retailers.

criddell 8y ago
Walmart.com is a marketplace.
jsight 8y ago
So your argument is that a marketplace is a place where it is easier for a third-party to get their goods sold than a retailer? And the distinction is how a supplier gets their product in is the differentiator? And then the argument is that the marketplace (where it is easier to get listed) should be regulated more than the retailer (which often uses control over sales to push prices up)? I'm not onboard with this.
- strange_quark 8y ago
  The argument is that retailers take on risk by agreeing to sell a product since they purchase the product upfront. A marketplace like Amazon is different because they can take on 0 risk while still collecting all the data about what's selling and then turn around and undercut the vendor with an Amazon Basics product risk free.
  - extra88 8y ago
    First, I think large retailers like Walmart can reduce or even eliminate the risk of selling a product in their contracts with product producers, making it effectively like selling on consignment. How profitable is Amazon Basics anyway? I bet it's small numbers. If dropping it was enough to get regulators to go away, I bet Amazon would drop it in a heartbeat. Other aspects like Prime and AWS are worth fighting over, both in terms of their value to the company and their potential to harm markets.
    - jsight 8y ago
      I bet Amazon does pretty good business with "Basics". It is a really interesting concept, IMO, and really different from store brands in the past. In many cases, the Amazon Basics products compete with essentially brandless (or relatively unknown brand) importers. The Amazon Basics brand works in these cases by having significantly more credibility than (insert random name here) USB cables. Its really the opposite way that store brand products have worked with traditional products in B&M stores, where the branded product generally has a higher natural reputation.
  - jsight 8y ago
    The practical difference between selling a few items in a few test stores vs offering a marketplace is zero. The storespace is a much bigger limiting factor than the perceived difference between a "marketplace" and a "retailer", IMO.
  - ars 8y ago
    > since they purchase the product upfront. That's not actually how retail works. Products are shipped to stores first, then are sold, and only 1 to 3 months later are the vendors paid. Unsold products are simply returned with no risk to the store. On top of that vendors will PAY stores for better shelf space, and will even be willing to stock the shelf, for free, for the store.
jklinger410 8y ago
How is a platform different than a retail space?
- fcarraldo 8y ago
  Say you've invented a product and are producing them at a small scale (100 units per month). What would it take to sell that product at Walmart? What would it take to sell it on Amazon?
  - jklinger410 8y ago
    Amazon sells all products, Walmart only sells some. Amazon sells online, Walmart sells in retail and online. So Amazon might preference another product, while Walmart both preferences other products and doesn't even accept most. Walmart preferences other products online as well. Yet Amazon is a monopoly? So if Amazon greatly restricted their product offering, they are good to go?
    - fcarraldo 8y ago
      You asked the difference between a marketplace and a retail store. Being a marketplace alone does not incur regulation. Being a dominant marketplace which takes anti-competitive stances is problematic, and taking action against anti-competitive moves by the most dominant marketplace in the US is what's being debated here. I'm not certain why we seem to be debating the merits of Walmart versus Amazon. I would be willing to venture that Warren supports regulations and potential antitrust action against Walmart, too. Just because she's proposed antitrust action on one type of organization doesn't mean she won't also support another - indeed, she wants the same of many organizations on Wall Street, and previously sponsored legislation to regulate Walmart to prevent poor labor practices [0]. [0] https://thehill.com/policy/finance/224535-warren-puts-pressure-on-walmart https://thehill.com/policy/finance/224535-warren-puts-pressu...
      - jklinger410 8y ago
        > Being a dominant marketplace which takes anti-competitive stances is problematic. Totally agree. The reason I bring up Wal Mart is to illustrate how this is essentially click-bait legislation. Wal Mart tore through main street providing retail space for products they liked, also making their own versions and selling for much cheaper, preferencing products, etc. Dominating the marketplace and forcing businesses to close. We called that good capitalism. To my knowledge, Warren has not submitted or voted on a bill in her tenure to break up Wal Mart. However now we are presenting Amazon as a unique type of problem and asking to break it up. With the one chief difference being the perception of fairness in presenting products equally because you can upload the listings yourself and it's on the internet. I'm just trying to figure out why these relatively young, trendy companies, instead of a whole host of other monopolies that are far more important. If the legislation comes down to semantics around an internet "marketplace" vs a retail store, then that begs another question of whether or not that is actually fair, and what the functional difference between the two actually is.
basch 8y ago
So you think it should be illegal for Walmart, Kroger, Walgreens and Costco to allow a company to rent shelf space, and allow that other company to keep the capital on its books until its sold, and to allow the retailer to act as a payment processor? Whos books the capital sits on while its in a warehouse is absolutely the most arbitrary distinction in all of this. Amazon provides warehouse space, and the product provider takes the risk of unsold product. Its a fair trade that allows exposure companies wouldnt otherwise get, unless they convinced amazon to BUY their stock. If anything is anti competitive, its walmart/apple etc forcing companies to drastically ramp up production, and then leaving them high and dry unless they accept low ball offers. It's exactly what Apple did to GT Advanced Technologies (forced a furnace company to turn into a manufacturing company, a deal they "couldnt refuse", and when they backed out / failed to deliver the company ended up ~90% smaller.)

criddell 8y ago

Walmart.com is a marketplace.

jsight 8y ago

So your argument is that a marketplace is a place where it is easier for a third-party to get their goods sold than a retailer? And the distinction is how a supplier gets their product in is the differentiator? And then the argument is that the marketplace (where it is easier to get listed) should be regulated more than the retailer (which often uses control over sales to push prices up)? I'm not onboard with this.

strange_quark 8y ago
The argument is that retailers take on risk by agreeing to sell a product since they purchase the product upfront. A marketplace like Amazon is different because they can take on 0 risk while still collecting all the data about what's selling and then turn around and undercut the vendor with an Amazon Basics product risk free.
- extra88 8y ago
  First, I think large retailers like Walmart can reduce or even eliminate the risk of selling a product in their contracts with product producers, making it effectively like selling on consignment. How profitable is Amazon Basics anyway? I bet it's small numbers. If dropping it was enough to get regulators to go away, I bet Amazon would drop it in a heartbeat. Other aspects like Prime and AWS are worth fighting over, both in terms of their value to the company and their potential to harm markets.
  - jsight 8y ago
    I bet Amazon does pretty good business with "Basics". It is a really interesting concept, IMO, and really different from store brands in the past. In many cases, the Amazon Basics products compete with essentially brandless (or relatively unknown brand) importers. The Amazon Basics brand works in these cases by having significantly more credibility than (insert random name here) USB cables. Its really the opposite way that store brand products have worked with traditional products in B&M stores, where the branded product generally has a higher natural reputation.
- jsight 8y ago
  The practical difference between selling a few items in a few test stores vs offering a marketplace is zero. The storespace is a much bigger limiting factor than the perceived difference between a "marketplace" and a "retailer", IMO.
- ars 8y ago
  > since they purchase the product upfront. That's not actually how retail works. Products are shipped to stores first, then are sold, and only 1 to 3 months later are the vendors paid. Unsold products are simply returned with no risk to the store. On top of that vendors will PAY stores for better shelf space, and will even be willing to stock the shelf, for free, for the store.

jklinger410 8y ago

How is a platform different than a retail space?

fcarraldo 8y ago
Say you've invented a product and are producing them at a small scale (100 units per month). What would it take to sell that product at Walmart? What would it take to sell it on Amazon?
- jklinger410 8y ago
  Amazon sells all products, Walmart only sells some. Amazon sells online, Walmart sells in retail and online. So Amazon might preference another product, while Walmart both preferences other products and doesn't even accept most. Walmart preferences other products online as well. Yet Amazon is a monopoly? So if Amazon greatly restricted their product offering, they are good to go?
  - fcarraldo 8y ago
    You asked the difference between a marketplace and a retail store. Being a marketplace alone does not incur regulation. Being a dominant marketplace which takes anti-competitive stances is problematic, and taking action against anti-competitive moves by the most dominant marketplace in the US is what's being debated here. I'm not certain why we seem to be debating the merits of Walmart versus Amazon. I would be willing to venture that Warren supports regulations and potential antitrust action against Walmart, too. Just because she's proposed antitrust action on one type of organization doesn't mean she won't also support another - indeed, she wants the same of many organizations on Wall Street, and previously sponsored legislation to regulate Walmart to prevent poor labor practices [0]. [0] https://thehill.com/policy/finance/224535-warren-puts-pressure-on-walmart https://thehill.com/policy/finance/224535-warren-puts-pressu...
    - jklinger410 8y ago
      > Being a dominant marketplace which takes anti-competitive stances is problematic. Totally agree. The reason I bring up Wal Mart is to illustrate how this is essentially click-bait legislation. Wal Mart tore through main street providing retail space for products they liked, also making their own versions and selling for much cheaper, preferencing products, etc. Dominating the marketplace and forcing businesses to close. We called that good capitalism. To my knowledge, Warren has not submitted or voted on a bill in her tenure to break up Wal Mart. However now we are presenting Amazon as a unique type of problem and asking to break it up. With the one chief difference being the perception of fairness in presenting products equally because you can upload the listings yourself and it's on the internet. I'm just trying to figure out why these relatively young, trendy companies, instead of a whole host of other monopolies that are far more important. If the legislation comes down to semantics around an internet "marketplace" vs a retail store, then that begs another question of whether or not that is actually fair, and what the functional difference between the two actually is.

basch 8y ago

So you think it should be illegal for Walmart, Kroger, Walgreens and Costco to allow a company to rent shelf space, and allow that other company to keep the capital on its books until its sold, and to allow the retailer to act as a payment processor? Whos books the capital sits on while its in a warehouse is absolutely the most arbitrary distinction in all of this. Amazon provides warehouse space, and the product provider takes the risk of unsold product. Its a fair trade that allows exposure companies wouldnt otherwise get, unless they convinced amazon to BUY their stock. If anything is anti competitive, its walmart/apple etc forcing companies to drastically ramp up production, and then leaving them high and dry unless they accept low ball offers. It's exactly what Apple did to GT Advanced Technologies (forced a furnace company to turn into a manufacturing company, a deal they "couldnt refuse", and when they backed out / failed to deliver the company ended up ~90% smaller.)