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Grocery stores don't operate as a "marketplace" though. Grocery stores curate their offerings, vet vendors, deal with returns etc... Amazon is more like shoppi

Grocery stores don't operate as a "marketplace" though. Grocery stores curate their offerings, vet vendors, deal with returns etc... Amazon is more like shopping mall that decides to start operating their own stores and competing with their tenants.

skybrian 7y ago
On the other hand, it's somewhat unlike a regular marketplace since Amazon requires vendors to match or exceed their own return policy.
EGreg 7y ago
Amazon does that with A-Z guarantee and helping resolve disputes and presenting listings and having Amazon Basics and Amazon’s Choice.
whoisjuan 7y ago
Is it really? I don't see how this comparison works at all. Amazon gives you distribution, traffic, logistics, etc, with zero risk. They just take a fee if you sell. The only upfront cost is if you pay the premium FBA and that's still a like a 40 bucks per month fee. I'm not trying to defend Amazon, but I don't think that comparison makes sense.
- learc83 7y ago
  It's obviously not a perfect metaphor, but neither is a grocery store. >Amazon gives you distribution, traffic, logistics, etc, with zero risk. Not everyone uses the distribution, and a mall or flea market also provides traffic to tenants.
  - tracer4201 7y ago
    At a mall you pay a fixed cost in terms of rent, regardless of sales. Amazon doesn’t charge you to simply list your product, right? If vendors were being charged a fee just for the listing itself without any sales, your argument would be more valid. If amazon does charge a fee for simply listing a product, tell us. They don’t as far as I know.
    - learc83 7y ago
      No analogy is perfect. Amazon obviously isn't a mall, but it's not a grocery store either. A grocery store owns the goods in their possession even if they have agreements for sellers to buy some unsold product back. Amazon does not own the 3rd party goods in their possession.
      - tracer4201 7y ago
        You’re dismissing the mall call by saying no analogy is perfect since it doesn’t work for your argument but then you’re comparing against grocery stores, which is a pretty gross simplification. Amazon isn’t a grocery store. The majority of their catalog isn’t even available at most grocery stores, maybe excluding WalMart. My family owned several convenience stores growing up. Some products were bought and it was your problem to move them off shelves. Some were displayed on shelves and you only paid for what was actually sold. This was common with one of the distributors who gave us Frito Lay products. Other products had strict terms - for instance, Pepsi and Coke distributors wouldn’t give you competitive pricing unless you agreed to purchase Y in X quantity, place their mini coolers next to the refrigerator, place signage within x feet, clearly visible from the front entrance, etc. suddenly, you’re the only store in town who sells 16 oz soda for $1.59 just to break even while everyone else is selling the same soda for $1.09 or just 99 cents. It’s a different model than Amazon and you’re taking liberties to simplify it
        subhro 7y ago
        Really curious. How are the other guys selling for $0.99, if they didn’t get the competitive pricing? (Presumably because they didn’t go through the sign within X feet antics)
        tracer4201 7y ago
        They did get competitive pricing, but they have a lot more wiggle room because they’re a giant company with far more revenue, marketing, and branding than a couple ma and pa stores. These distributors may or may not have the exact same terms, but at the end of the day, these other corporate stores had enough foot traffic that provided them ammo to help define their own terms. You just didn’t have that leverage as a smaller shop.
- berdon 7y ago
  Doesn't a grocery store give their product manufacturers those things as well? Distribution, traffic, logistics, marketing.
  - whoisjuan 7y ago
    Perhaps, but with minimal control, larger risks and upfront costs. Especially if you're a small company selling under consignment.
ses1984 7y ago
I don't really see how important that distinction is.
encoderer 7y ago
Facile argument. Grocery stores actually rent shelf space in many cases and do not take on product liability. It’s a different business entirely. Amazon is totally within their right imo, those sellers can go back to eBay if they dislike amazon.
- learc83 7y ago
  Retail stores absolutely take on more product liability than marketplaces do.
everythingswan 7y ago
You have a point but I think the fact that grocery stores sell private label goods is the counter-point. Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time. We call them supermarkets, right? A grocery store is simply a more organized open market. Which is very comparable to Amazon. I think the problem is that they present the results on good faith that "these results are the best match for you based on your search", not the most profitable for them. I just ran a search and the default search filter was "Featured", which is so ambiguous it could mean anything, so it seems like a classic bait and switch that played out over the course of a decade of consumers getting the best search results based on reviews and sales.
- learc83 7y ago
  >Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time. That was the original point I was arguing against. My point is that grocery store is not a good analogy because Amazon is not the same as a retail store, they are a combination store and marketplace.
  - PorterDuff 7y ago
    I would argue that a grocery store is a combination store and marketplace in that case. Stores have plenty of in-house brands, they also have racks of goods that are stocked and sold by third parties wherein they get a cut. To be fair, I think I would be more comfortable comparing Amazon to Sears in it's heyday.
    - ummonk 7y ago
      What store / grocery store has goods stocked by third parties? (Rather than purchased from the third party by the grocery store)?
      - PorterDuff 7y ago
        All of the ones around here do. Used DVD racks still exist. Soft drink vending machines. Seasonal items. Newspaper racks. In the case of items actually run through the register, I'm not sure how that's dealt with from an accounting standpoint. I do know that the stores have the ability to return 100% of unsold goods in those cases.
graeme 7y ago
>Grocery stores curate their offerings, vet vendors, deal with returns Amazon does all of these things. They have unlimited shelf space, which reduces constraints. But vendors can have amazon handle returns, they can be kicked off the platform, and amazon decided how to present vendors.
toasterlovin 7y ago
Malls curate the stores that they lease space to. That's why some malls are very high end and others are not.
LegitShady 7y ago
>Amazon is more like shopping mall that decides to start operating their own stores and competing with their tenants. more like a big box store that allows other stores to operate in them so long as they get a cut.

skybrian 7y ago

On the other hand, it's somewhat unlike a regular marketplace since Amazon requires vendors to match or exceed their own return policy.

EGreg 7y ago

Amazon does that with A-Z guarantee and helping resolve disputes and presenting listings and having Amazon Basics and Amazon’s Choice.

whoisjuan 7y ago

Is it really? I don't see how this comparison works at all. Amazon gives you distribution, traffic, logistics, etc, with zero risk. They just take a fee if you sell. The only upfront cost is if you pay the premium FBA and that's still a like a 40 bucks per month fee. I'm not trying to defend Amazon, but I don't think that comparison makes sense.

learc83 7y ago
It's obviously not a perfect metaphor, but neither is a grocery store. >Amazon gives you distribution, traffic, logistics, etc, with zero risk. Not everyone uses the distribution, and a mall or flea market also provides traffic to tenants.
- tracer4201 7y ago
  At a mall you pay a fixed cost in terms of rent, regardless of sales. Amazon doesn’t charge you to simply list your product, right? If vendors were being charged a fee just for the listing itself without any sales, your argument would be more valid. If amazon does charge a fee for simply listing a product, tell us. They don’t as far as I know.
  - learc83 7y ago
    No analogy is perfect. Amazon obviously isn't a mall, but it's not a grocery store either. A grocery store owns the goods in their possession even if they have agreements for sellers to buy some unsold product back. Amazon does not own the 3rd party goods in their possession.
    - tracer4201 7y ago
      You’re dismissing the mall call by saying no analogy is perfect since it doesn’t work for your argument but then you’re comparing against grocery stores, which is a pretty gross simplification. Amazon isn’t a grocery store. The majority of their catalog isn’t even available at most grocery stores, maybe excluding WalMart. My family owned several convenience stores growing up. Some products were bought and it was your problem to move them off shelves. Some were displayed on shelves and you only paid for what was actually sold. This was common with one of the distributors who gave us Frito Lay products. Other products had strict terms - for instance, Pepsi and Coke distributors wouldn’t give you competitive pricing unless you agreed to purchase Y in X quantity, place their mini coolers next to the refrigerator, place signage within x feet, clearly visible from the front entrance, etc. suddenly, you’re the only store in town who sells 16 oz soda for $1.59 just to break even while everyone else is selling the same soda for $1.09 or just 99 cents. It’s a different model than Amazon and you’re taking liberties to simplify it
      - subhro 7y ago
        Really curious. How are the other guys selling for $0.99, if they didn’t get the competitive pricing? (Presumably because they didn’t go through the sign within X feet antics)
        tracer4201 7y ago
        They did get competitive pricing, but they have a lot more wiggle room because they’re a giant company with far more revenue, marketing, and branding than a couple ma and pa stores. These distributors may or may not have the exact same terms, but at the end of the day, these other corporate stores had enough foot traffic that provided them ammo to help define their own terms. You just didn’t have that leverage as a smaller shop.
berdon 7y ago
Doesn't a grocery store give their product manufacturers those things as well? Distribution, traffic, logistics, marketing.
- whoisjuan 7y ago
  Perhaps, but with minimal control, larger risks and upfront costs. Especially if you're a small company selling under consignment.

ses1984 7y ago

I don't really see how important that distinction is.

encoderer 7y ago

Facile argument. Grocery stores actually rent shelf space in many cases and do not take on product liability. It’s a different business entirely. Amazon is totally within their right imo, those sellers can go back to eBay if they dislike amazon.

learc83 7y ago
Retail stores absolutely take on more product liability than marketplaces do.

everythingswan 7y ago

You have a point but I think the fact that grocery stores sell private label goods is the counter-point. Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time. We call them supermarkets, right? A grocery store is simply a more organized open market. Which is very comparable to Amazon. I think the problem is that they present the results on good faith that "these results are the best match for you based on your search", not the most profitable for them. I just ran a search and the default search filter was "Featured", which is so ambiguous it could mean anything, so it seems like a classic bait and switch that played out over the course of a decade of consumers getting the best search results based on reviews and sales.

learc83 7y ago
>Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time. That was the original point I was arguing against. My point is that grocery store is not a good analogy because Amazon is not the same as a retail store, they are a combination store and marketplace.
- PorterDuff 7y ago
  I would argue that a grocery store is a combination store and marketplace in that case. Stores have plenty of in-house brands, they also have racks of goods that are stocked and sold by third parties wherein they get a cut. To be fair, I think I would be more comfortable comparing Amazon to Sears in it's heyday.
  - ummonk 7y ago
    What store / grocery store has goods stocked by third parties? (Rather than purchased from the third party by the grocery store)?
    - PorterDuff 7y ago
      All of the ones around here do. Used DVD racks still exist. Soft drink vending machines. Seasonal items. Newspaper racks. In the case of items actually run through the register, I'm not sure how that's dealt with from an accounting standpoint. I do know that the stores have the ability to return 100% of unsold goods in those cases.

graeme 7y ago

>Grocery stores curate their offerings, vet vendors, deal with returns Amazon does all of these things. They have unlimited shelf space, which reduces constraints. But vendors can have amazon handle returns, they can be kicked off the platform, and amazon decided how to present vendors.

toasterlovin 7y ago

Malls curate the stores that they lease space to. That's why some malls are very high end and others are not.

LegitShady 7y ago

>Amazon is more like shopping mall that decides to start operating their own stores and competing with their tenants. more like a big box store that allows other stores to operate in them so long as they get a cut.