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> Amazon very often competes directly with sellers on the Marketplace, and often undercuts them on price. If Amazon can actually compete with you in a given pr

> Amazon very often competes directly with sellers on the Marketplace, and often undercuts them on price. If Amazon can actually compete with you in a given product niche, then you're not bringing any value to the table (since they own the customer relationship, the fulfillment, the logistics, etc.), so why do you deserve to make money? There are a gazillion product categories on Amazon. There's no way they can bring products to market in all of them. They focus their attention on markets where brand differentiation isn't very important. Usually those markets are that way because what consumers care about is price, convenience, and surpassing some minimum level of quality. Those are the spaces where Amazon puts forward their own product. And if your livelihood is tied to being a relatively generic brand in a product category where consumers really only care about convenience and price, then you need to find a different way to make it in the world.

Alupis 7y ago
Being on Amazon's Marketplace (the largest in the world), every sale gives Amazon all the statistics needed to pick only guaranteed profitable products. The sellers actually pay Amazon for the privilege of providing Amazon with these market tests! Then Amazon requires the seller to produce invoices showing purchase of the items, usually with some sort of vague threat of suspending your account if they can't "verify the authenticity" of your products. The invoice, of course, has everything needed for Amazon to start sourcing the product themselves - and now they know your cost. So they proceed to purchase the product, sell it at a loss until you can't hang anymore, and now Amazon is the sole source for the product. It's brilliant, actually. But it's definitely Anti-Competitive. Just like the "dumb pipes" argument with Net Neutrality - If you wanna run a Marketplace, you shouldn't be allowed to "compete" in the very same Marketplace. You should not be allowed to collect and then abuse all the data the Marketplace produces.
- toasterlovin 7y ago
  > Being on Amazon's Marketplace (the largest in the world), every sale gives Amazon all the statistics needed to pick only guaranteed profitable products. No, it does not. They are missing the most important piece of information: Cost of Goods Sold. They also don't know where you sourced the product. Or which features are important to customers and which are not. > Then Amazon requires the seller to produce invoices showing purchase of the items, usually with some sort of vague threat of suspending your account if they can't "verify the authenticity" of your products. This is only for trademarked products where the trademark owner has registered with Amazon. And the purpose is to protect consumers: by requiring proof that a product has been sourced from an authorize reseller, rather than some factory making knock offs or somebody buying stolen goods. > So they proceed to purchase the product, sell it at a loss until you can't hang anymore, and now Amazon is the sole source for the product. The only sellers this alleged strategy would harm are sellers who are selling a trademarked brand for which they are not authorized. But why should those sellers even be on Amazon? And how would this be any different than Amazon buying these products directly from the manufacturer and being the only seller on their website? In other words, they don't need to do what you're alleging. They are free to just claim certain products as 1st party only. Separately: I sell speaker wire on Amazon. I compete against their Amazon Basics brand. I have a viable business that is growing. Because I know more about this market and its weird little crevices than Amazon ever will.
  - Alupis 7y ago
    > This is only for trademarked products where the trademark owner has registered with Amazon I can tell you first hand, this is not true. This is the "official party line", as it were, but not true in practice. Particularly if you FBA anything. Get enough returns of a product and Amazon will freeze the listing until you provide an invoice - FBA and FBM. For us, "enough" returns was 4 on a single ASIN in a week, out of the thousands we carry. It's a totally random system. > I have a viable business that is growing I wish you best of luck! In our case, we're an ecommerce company operating our own warehouse and multiple sales channels including our own websites. Amazon is but one of those channels, and we don't rely on it for company livelihood. I would be terrified to live solely off Amazon, knowing the rug can be yanked out at any time for any reason and with zero recourse. You can do everything right and still get canned.
- lttlrck 7y ago
  This seems little different to walmart or any other grocer or retailer with own brand products alongside other suppliers in their ‘marketplace’. Should bricks and mortar stores also be dumb pipes? Is there evidence of Amazon driving a company out of business by abusing this position? If there is then that could be a problem.
  - toasterlovin 7y ago
    > Is there evidence of Amazon driving a company out of business by abusing this position? If there is then that could be a problem. No, it really is not a problem. Amazon does not have a monopoly on consumer purchases. If your livelihood is dependent on selling on Amazon, a company which sells tons of products first party, then you need to be prepared from day one for the possibility that Amazon is going to bring a product to market in your category under the Amazon Basics brand, or that they will go directly to the manufacturer whose products you are selling. Period. Amazon isn't running their business so you can make money. They're running it so they can make money. As long as they think their interests are aligned with yours, then there's a chance for you to participate profitably on their platform. The minute that changes, you better have a plan B.
    - Alupis 7y ago
      Is that not a conflict of interest then? To operate a 3rd Party Marketplace while also harvesting said marketplace's data and then deliberately targeting top products, killing those 3rd parties in the process?
      - toasterlovin 7y ago
        They're not your lawyer. They're allowed to have a conflict of interest. Especially one that you are fully aware of going into the relationship. I just don't get it. Do you think someone selling a generic product that only differentiates on price has some unalienable right to make money on Amazon.com? Or that some wholesaler buying branded products has an inalienable right to somehow not get squeezed out when the only value they provide is placing POs with a vendor?
- kevinsundar 7y ago
  I think you're underestimating how complicated that is to do. If you've worked at any massive company its easy to understand how freaking hard it would be to have the sales department, the manufacturing and product design department, finance, business analytics, and seller auditing teams all working together in unison to pull this off. Yes its worth their time doing this for a few commodities everyone buys but theres no way the can do this for every single product category. In fact Amazon doesn't even make much margin off ecommerce. It's AWS. So it probably isnt even worth their time. Is it theoretically possible? Yes. Practically? At scale, its hard to say for sure.

Alupis 7y ago

Being on Amazon's Marketplace (the largest in the world), every sale gives Amazon all the statistics needed to pick only guaranteed profitable products. The sellers actually pay Amazon for the privilege of providing Amazon with these market tests! Then Amazon requires the seller to produce invoices showing purchase of the items, usually with some sort of vague threat of suspending your account if they can't "verify the authenticity" of your products. The invoice, of course, has everything needed for Amazon to start sourcing the product themselves - and now they know your cost. So they proceed to purchase the product, sell it at a loss until you can't hang anymore, and now Amazon is the sole source for the product. It's brilliant, actually. But it's definitely Anti-Competitive. Just like the "dumb pipes" argument with Net Neutrality - If you wanna run a Marketplace, you shouldn't be allowed to "compete" in the very same Marketplace. You should not be allowed to collect and then abuse all the data the Marketplace produces.

toasterlovin 7y ago
> Being on Amazon's Marketplace (the largest in the world), every sale gives Amazon all the statistics needed to pick only guaranteed profitable products. No, it does not. They are missing the most important piece of information: Cost of Goods Sold. They also don't know where you sourced the product. Or which features are important to customers and which are not. > Then Amazon requires the seller to produce invoices showing purchase of the items, usually with some sort of vague threat of suspending your account if they can't "verify the authenticity" of your products. This is only for trademarked products where the trademark owner has registered with Amazon. And the purpose is to protect consumers: by requiring proof that a product has been sourced from an authorize reseller, rather than some factory making knock offs or somebody buying stolen goods. > So they proceed to purchase the product, sell it at a loss until you can't hang anymore, and now Amazon is the sole source for the product. The only sellers this alleged strategy would harm are sellers who are selling a trademarked brand for which they are not authorized. But why should those sellers even be on Amazon? And how would this be any different than Amazon buying these products directly from the manufacturer and being the only seller on their website? In other words, they don't need to do what you're alleging. They are free to just claim certain products as 1st party only. Separately: I sell speaker wire on Amazon. I compete against their Amazon Basics brand. I have a viable business that is growing. Because I know more about this market and its weird little crevices than Amazon ever will.
- Alupis 7y ago
  > This is only for trademarked products where the trademark owner has registered with Amazon I can tell you first hand, this is not true. This is the "official party line", as it were, but not true in practice. Particularly if you FBA anything. Get enough returns of a product and Amazon will freeze the listing until you provide an invoice - FBA and FBM. For us, "enough" returns was 4 on a single ASIN in a week, out of the thousands we carry. It's a totally random system. > I have a viable business that is growing I wish you best of luck! In our case, we're an ecommerce company operating our own warehouse and multiple sales channels including our own websites. Amazon is but one of those channels, and we don't rely on it for company livelihood. I would be terrified to live solely off Amazon, knowing the rug can be yanked out at any time for any reason and with zero recourse. You can do everything right and still get canned.
lttlrck 7y ago
This seems little different to walmart or any other grocer or retailer with own brand products alongside other suppliers in their ‘marketplace’. Should bricks and mortar stores also be dumb pipes? Is there evidence of Amazon driving a company out of business by abusing this position? If there is then that could be a problem.
- toasterlovin 7y ago
  > Is there evidence of Amazon driving a company out of business by abusing this position? If there is then that could be a problem. No, it really is not a problem. Amazon does not have a monopoly on consumer purchases. If your livelihood is dependent on selling on Amazon, a company which sells tons of products first party, then you need to be prepared from day one for the possibility that Amazon is going to bring a product to market in your category under the Amazon Basics brand, or that they will go directly to the manufacturer whose products you are selling. Period. Amazon isn't running their business so you can make money. They're running it so they can make money. As long as they think their interests are aligned with yours, then there's a chance for you to participate profitably on their platform. The minute that changes, you better have a plan B.
  - Alupis 7y ago
    Is that not a conflict of interest then? To operate a 3rd Party Marketplace while also harvesting said marketplace's data and then deliberately targeting top products, killing those 3rd parties in the process?
    - toasterlovin 7y ago
      They're not your lawyer. They're allowed to have a conflict of interest. Especially one that you are fully aware of going into the relationship. I just don't get it. Do you think someone selling a generic product that only differentiates on price has some unalienable right to make money on Amazon.com? Or that some wholesaler buying branded products has an inalienable right to somehow not get squeezed out when the only value they provide is placing POs with a vendor?
kevinsundar 7y ago
I think you're underestimating how complicated that is to do. If you've worked at any massive company its easy to understand how freaking hard it would be to have the sales department, the manufacturing and product design department, finance, business analytics, and seller auditing teams all working together in unison to pull this off. Yes its worth their time doing this for a few commodities everyone buys but theres no way the can do this for every single product category. In fact Amazon doesn't even make much margin off ecommerce. It's AWS. So it probably isnt even worth their time. Is it theoretically possible? Yes. Practically? At scale, its hard to say for sure.