4 ms·
The concern with this and other products is that amazon will drive DOWN margins. THAT is the seller worry / complaint. Driving down margins is not price fixing.
by privateSFacct 7y ago
The concern with this and other products is that amazon will drive DOWN margins. THAT is the seller worry / complaint. Driving down margins is not price fixing.
Amazon provides a promise that it will pay folks a minimum price for their products, revisited periodically. That is the same thing any other retailer does with their suppliers.
Amazon current net profit is 4% of sales. This is actually one of their HIGHEST % of sales net income number in their history, they've historically been at 1-2%.
Take healthcare for example. They rarely publish their cash list prices making it extremely difficult to comparison shop, they consolidate local competitors into major network to reduce choice, they adhere to minimum price schedules, they surprise you with all sorts of unexected charges which are difficult to impossible to avoid (out of network charges in an in network hospital). Many of those items are flags of anti-competitive behavior by the way.
Amazon has clear pricing, has introduced a marketplace for competition between types of items (including new vs used) etc. When you see folks going after Amazon and not other much clearer issues of competition (false advertising, the health care industry etc) that should raise a red flag. If you look at whether Amazon or the medical industry leads to more consumer bankruptcies, it's not even close.
The worry should be that with huge sales volume they can put future potential competitors out of business in spaces like a digital home assistant etc by underpricing their products.
Sales of pencil cases etc is not going to be their high margin area, their high margin will be in marketplace / fulfillment and compute fees among others.