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I saw this happening a decade ago, but I had no real proof. I had a profitable Amazon store in 2010. I found niche products that Amazon didn't sell. As soon

I saw this happening a decade ago, but I had no real proof. I had a profitable Amazon store in 2010. I found niche products that Amazon didn't sell. As soon as I started getting traction on any one product, Amazon would start undercutting me, and my sales would drop to almost zero over the course of a couple of weeks. I had near 100% feedback and I had a single customer complaint that I sold them the wrong product. Within a few minutes of me receiving this claim, my account was suspended. I had no chance to rectify the situation. No amount of calling or emailing Amazon could get me in front of someone that could help me. All responses were an automated rejection. This was a rough time for me as it was my only form of income and Amazon held almost $30,000 of my money for 3 months. I ended up having to close my business and move on, though I did eventually get all of my money back. I've built multiple successful businesses since then and Amazon has recently had many business reps try to get me to sign up with a business account, because we purchase lots of items on Amazon/month. I always try to get them to re-investigate my old seller account and our email correspondence stops shortly after this. It's crazy to me that after 10 years and in a completely different industry, I still can't open a seller account. It taught me a valuable lesson not to build my entire business on someone else's platform. It only gives them more control over you and they will most likely use your customers, data, and more resources to out-compete you, if you get too big. Twitter has also done this to their app developers. My wife runs a small business on Etsy and it's just as bad. They make random code changes, which bumps listings up or down and you suddenly have no orders for weeks at a time. What's even scarier is if a handful of companies run everything we use online. Will I suddenly not be able to get a home loan for a decade because of an account closure?

TimSchumann 6y ago
> It taught me a valuable lesson not to build my entire business on someone else's platform. This sounds eerily similar to what happened to a close friend of mine, and that's 100% the right takeaway from the situation. > My wife runs a small business on Etsy and it's just as bad. They make random code changes, which bumps listings up or down and you suddenly have no orders for weeks at a time. Same as above, different friend, but again Etsy. > What's even scarier is if a handful of companies run everything we use online. Will I suddenly not be able to get a home loan for a decade because of an account closure? And that's why I'm in favor of strong individual privacy laws, and corresponding enforcement of said laws. Because 'I've got nothing to hide' only works so long as your values/goals are in line with everyone else in the system you're operating in. The second that changes, good luck and godspeed. Thanks for the great read, and... I dunno just validating your view of things.
- rightbyte 6y ago
  The 'I got nothing to hide' is when discussing law enforcement surveilence? It is funny how fear of the "police state" is more or less irrelevant now vs early 2000s and private companies are the main problem. It is hard to predict the future.
  - TimSchumann 6y ago
    Yeah that may have not been the correct phrase to turn there. I guess in this context it's more about personal ownership of data. Which at this point in time, is 100% trust based with Amazon and 0% tech based. I don't think that's something people, even many very technologically knowledgeable people, are aware of.
- TallGuyShort 6y ago
  >> I'm in favor of strong individual privacy laws I support such laws too, but I wouldn't expect them to really change this. I think what we're seeing is more of a monopoly problem than anything else, even if violating privacy is a part of how they pull it off. It's very hard to prove that a company that does, in theory, have access to data is not storing it or looking at it. Even accidentally. I just finished explaining all this to someone who freaked out about a Facebook post they saw about how Facebook was starting to collect information about everything you do off-Facebook. I had them show me what they meant, and it appears to just be every app that integrates with Facebook comments or allows Facebook sign-in as an option, etc. The problem is one Facebook naturally got because of it's success: everyone has good reasons to want to work within their ecosystem. So they get tons of data on everyone. You can inconvenience yourself and refuse to ever visit a service that might share data with Facebook. But honestly: who's going to find that practical and do it? And if Facebook ignores the setting and "accidentally" captures all this data, and I suspect they're misusing it, how do I really get an investigation and more than a slap on the wrist for them? It's messy to be a platform that provides a service and a consumer of that service that competes with your other consumers. At a previous job of mine we made a conscious decision not to do that for fear it would hurt our core business to ruin relationships with our customers. The problem here is Amazon just doesn't fear that. And I can't say they should. But the root problem seems to me to be more of a monopoly problem than a privacy problem.
marcosdumay 6y ago
You know, at some point people will discover that "online market" is something important enough for governments to regulate.
- sneak 6y ago
  I think this is just a special case of “online communication”. It’s illegal for the phone company to arbitrarily suspend your service for what (legal things) you say over the phone. It’s legal for Twitter or Amazon or Etsy or Twitch or Discord or YouTube. I recently got suspended by Twitter after using it daily for 12 years and in addition to not being able to send new tweets or DMs (or do data backup/takeout), I also can no longer see even the usernames (or the message history) of the people I was communicating with in DM. For many of them, that was my only contact info for them. I am becoming increasingly convinced for the need to regulate arbitrary suspensions for communications platforms (including sales/business platforms, that’s just a special case of communication). The current emergency situation really woke me up to the huge dangers involved. GP lost his business, which is sad and tragic and unfair. I envision that in disasters or emergencies, eventually someone is going to lose their life. Imagine if the mobile phone or cable company could arbitrarily suspend your connectivity because you left bad reviews online about their service. I recently did a deep dive on how these sorts of centralized, censorship systems pose an inherent and existential threat to safety and human rights in an emergency/pandemic/war that is non-obvious in peacetime: https://sneak.berlin/20200421/normalcy-bias/ https://sneak.berlin/20200421/normalcy-bias/ It’s truly terrifying to me that these systems (among them Amazon, Discord, Twitter, YouTube, Facebook, Instagram) have final say, practically, over who gets to speak to whom in a lot of cases in society, or what is allowed to be said. These companies (and the government in their jurisdiction) are entirely unaccountable for this terrible censorship power they wield, and it is only a matter of when, not if, it will be horribly abused. TFA is just one important facet of this danger.
  - aleksaxyz 6y ago
    Can I see the laws that affect phone companies and free speech? That's an interesting observation, and does parallel Twitter/YouTube/etc, so I'd like to see the wording for it.
joyj2nd 6y ago
I had a few bad experiences with Amazon. 1st I got an item from a fraudulent 3rd party shipper. Did not get my money back and amazon claimed they don't know his identity 2nd Packet got stolen. Amazon claimed based on statistical analysis this packet is assumed to have reached me. Delivered to "mailbox". Paid with CC, made a charge back, closed my account. You know what is a pretty good competitor? eBay. As a business it may be terrible, but as a market place it is quite good.
- TimSchumann 6y ago
  > You know what is a pretty good competitor? Competitor on what vector? Speaking from a US-centric viewpoint here, but my thoughts; * Distribution & Warehousing - Walmart & Costco * Sales & Advertising - Google & Facebook A few notable online storefronts that are independent and I use frequently are B&H Photovideo and Newegg. Realistically though the options I listed above are the only companies I see having the scale to compete with Amazon at anything, and even then they're an order of magnitude behind. Just my opinion, again very US-centric.
  - joyj2nd 6y ago
    Yes, sorry, I meant from a buyer perspective. As a side node: I am actually thinking of buying a tiny bankrupt travel equipment company. Friends advised against it because of "Amazon essentials". I would not sell on Amazon but it is a strong argument. Maybe someone has some words of wisdom regarding to this.
    - noizejoy 6y ago
      If you’re considering entering anything that depends on travel right now, you are much braver than me! Respect!
    - RandomBacon 6y ago
      > bankrupt What do they have that you want, or what do you think you're going to do differently? Why did it go bankrupt? If they claim it's only bankrupt because of COVID-19, then it must not have been very profitable (if at all) if they didn't have enough money to weather out at least 3 months. So I recommend not accepting that explanation.
deleted 6y ago
[deleted]
madaxe_again 6y ago
There’s a step before them undercutting you, and that’s the margin squeeze. I’ve seen it happen, repeatedly - also years ago. If you sold a high volume commodity on seller central, you’d see your commission go up, and up, and up, until you squeak - you either quit or you complain. They now know exactly how much that line nets you, and whether it’s worth selling.
econcon 6y ago
Same happens to us but we split sales to Shopify. Any idea if Shopify does same? It seems their ambitions keeps growing, they started charging percentage of revenue instead of flat subscription.
- TimSchumann 6y ago
  I've had this thought as well, and certainly there seems to be nothing preventing them from going down that road. Though at least with Shopify, it's theoretically easier to move your website to another platform/service or just roll your own. I'd say that you're basically at their mercy with regards to the charging a percentage of revenue though. I mean, that's how all card processors work. By default I trust Shopify more than Amazon, and in both instances your business is essentially succeeding 'at their pleasure' so to speak. So I thought on it for a minute. I think the main difference comes down to individuals in the business and culture. I'd elaborate more but I'm not sure I want to write that much speculative crap on the internet this morning, and I should get something productive done with my day. EDIT: Also just realized, that if you look at my spending habits, they 100% imply I trust Amazon more than Shopify.
- exolymph 6y ago
  Get worried when they start owning the customer relationship (or trying to). Already low-key happening in payments.
- dmalik 6y ago
  No Shopify does not. Amazon and Shopify are very different 1 1) https://stratechery.com/2019/shopify-and-the-power-of-platforms/ https://stratechery.com/2019/shopify-and-the-power-of-platfo...
chillacy 6y ago
Is life significantly better for retails selling through grocery or other retailers? What stops Safeway from one day selling a competing product under their store brand? And then they'd still be charging you for shelf placement.
deleted 6y ago
[deleted]
shrewduser 6y ago
I don't see how this is legal, Personally i don't think you should be able to run the market and compete in it at the same time. People talk a lot about other companies but the one i'm most worried about for stamping out startups and holding the economy back is amazon.
- TimSchumann 6y ago
  > I don't see how this is legal, Personally i don't think you should be able to run the market and compete in it at the same time. It may be, it may not be. I don't know, I am not a Lawyer nor do I play one on the internet. What I do know is that to date no individual, or collective, has had the financial or political will to test any of this in court. I suspect this is largely a positive feedback loop whereby any entity that has the financial or political capital to do so and stand a reasonable chance of winning has done the calculus and come to the conclusion that setting said legal precedent would do their own businesses more harm than it would net them in value from Amazon. Until that changes, meet the new boss same as the old boss.
  - fuzzfactor 6y ago
    Any individual or collective which had the wherewithal could do the math and it will always be strongly in favor of working with Amazon rather than against it. Old boss wasn't going anywhere until a new one came along that was big enough to crush at will.
xwdv 6y ago
Come to Shopify.
CerealFounder 6y ago
It's pretty anti-competitive that a company can operate a marketplace and sell on the same marketplace. It would seem like an obvious law to enact.
- 2OEH8eoCRo0 6y ago
  It's one of those Schrodinger's laws that applies to companies like Amazon. They're either a marketplace or not depending on the complaint. Complain about shady sellers and fakes? They're a marketplace and not responsible! Complain about anti competitive practices? Well this is clearly the Amazon store, says so right on it, clearly not a marketplace!
  - selimthegrim 6y ago
    Yes, Prime Minister used to call these irregular verbs. I compete, you steal, he or she colludes...
slowwwclap 6y ago
I recently (pre-COVID19) sold all my Amazon and replaced it with Apple due to these issues. I feel Apple Pay, and the fast followers, will drive shopping to more platforms than Amazon by reducing friction for customers of independent websites (supported by USPS, UPS, Fedex... which Amazon has decided not to compete with anymore). With the Amazon COVID19 shipping delays, I’ve established many new shopping relationships online, and I hope that is the experience for many others, changing the market. The CEO of Shopify gives great talks about the important of this, so I do support that platform at this point.
amelius 6y ago
> It taught me a valuable lesson not to build my entire business on someone else's platform. Lots of developers do this already with iOS and the App store. Some people don't even have a choice. E.g. taxi drivers had their entire market turned into a platform. Same with restaurants and meal delivery.

TimSchumann 6y ago

> It taught me a valuable lesson not to build my entire business on someone else's platform. This sounds eerily similar to what happened to a close friend of mine, and that's 100% the right takeaway from the situation. > My wife runs a small business on Etsy and it's just as bad. They make random code changes, which bumps listings up or down and you suddenly have no orders for weeks at a time. Same as above, different friend, but again Etsy. > What's even scarier is if a handful of companies run everything we use online. Will I suddenly not be able to get a home loan for a decade because of an account closure? And that's why I'm in favor of strong individual privacy laws, and corresponding enforcement of said laws. Because 'I've got nothing to hide' only works so long as your values/goals are in line with everyone else in the system you're operating in. The second that changes, good luck and godspeed. Thanks for the great read, and... I dunno just validating your view of things.

rightbyte 6y ago
The 'I got nothing to hide' is when discussing law enforcement surveilence? It is funny how fear of the "police state" is more or less irrelevant now vs early 2000s and private companies are the main problem. It is hard to predict the future.
- TimSchumann 6y ago
  Yeah that may have not been the correct phrase to turn there. I guess in this context it's more about personal ownership of data. Which at this point in time, is 100% trust based with Amazon and 0% tech based. I don't think that's something people, even many very technologically knowledgeable people, are aware of.
TallGuyShort 6y ago
>> I'm in favor of strong individual privacy laws I support such laws too, but I wouldn't expect them to really change this. I think what we're seeing is more of a monopoly problem than anything else, even if violating privacy is a part of how they pull it off. It's very hard to prove that a company that does, in theory, have access to data is not storing it or looking at it. Even accidentally. I just finished explaining all this to someone who freaked out about a Facebook post they saw about how Facebook was starting to collect information about everything you do off-Facebook. I had them show me what they meant, and it appears to just be every app that integrates with Facebook comments or allows Facebook sign-in as an option, etc. The problem is one Facebook naturally got because of it's success: everyone has good reasons to want to work within their ecosystem. So they get tons of data on everyone. You can inconvenience yourself and refuse to ever visit a service that might share data with Facebook. But honestly: who's going to find that practical and do it? And if Facebook ignores the setting and "accidentally" captures all this data, and I suspect they're misusing it, how do I really get an investigation and more than a slap on the wrist for them? It's messy to be a platform that provides a service and a consumer of that service that competes with your other consumers. At a previous job of mine we made a conscious decision not to do that for fear it would hurt our core business to ruin relationships with our customers. The problem here is Amazon just doesn't fear that. And I can't say they should. But the root problem seems to me to be more of a monopoly problem than a privacy problem.

marcosdumay 6y ago

You know, at some point people will discover that "online market" is something important enough for governments to regulate.

sneak 6y ago
I think this is just a special case of “online communication”. It’s illegal for the phone company to arbitrarily suspend your service for what (legal things) you say over the phone. It’s legal for Twitter or Amazon or Etsy or Twitch or Discord or YouTube. I recently got suspended by Twitter after using it daily for 12 years and in addition to not being able to send new tweets or DMs (or do data backup/takeout), I also can no longer see even the usernames (or the message history) of the people I was communicating with in DM. For many of them, that was my only contact info for them. I am becoming increasingly convinced for the need to regulate arbitrary suspensions for communications platforms (including sales/business platforms, that’s just a special case of communication). The current emergency situation really woke me up to the huge dangers involved. GP lost his business, which is sad and tragic and unfair. I envision that in disasters or emergencies, eventually someone is going to lose their life. Imagine if the mobile phone or cable company could arbitrarily suspend your connectivity because you left bad reviews online about their service. I recently did a deep dive on how these sorts of centralized, censorship systems pose an inherent and existential threat to safety and human rights in an emergency/pandemic/war that is non-obvious in peacetime: https://sneak.berlin/20200421/normalcy-bias/ https://sneak.berlin/20200421/normalcy-bias/ It’s truly terrifying to me that these systems (among them Amazon, Discord, Twitter, YouTube, Facebook, Instagram) have final say, practically, over who gets to speak to whom in a lot of cases in society, or what is allowed to be said. These companies (and the government in their jurisdiction) are entirely unaccountable for this terrible censorship power they wield, and it is only a matter of when, not if, it will be horribly abused. TFA is just one important facet of this danger.
- aleksaxyz 6y ago
  Can I see the laws that affect phone companies and free speech? That's an interesting observation, and does parallel Twitter/YouTube/etc, so I'd like to see the wording for it.

joyj2nd 6y ago

I had a few bad experiences with Amazon. 1st I got an item from a fraudulent 3rd party shipper. Did not get my money back and amazon claimed they don't know his identity 2nd Packet got stolen. Amazon claimed based on statistical analysis this packet is assumed to have reached me. Delivered to "mailbox". Paid with CC, made a charge back, closed my account. You know what is a pretty good competitor? eBay. As a business it may be terrible, but as a market place it is quite good.

TimSchumann 6y ago
> You know what is a pretty good competitor? Competitor on what vector? Speaking from a US-centric viewpoint here, but my thoughts; * Distribution & Warehousing - Walmart & Costco * Sales & Advertising - Google & Facebook A few notable online storefronts that are independent and I use frequently are B&H Photovideo and Newegg. Realistically though the options I listed above are the only companies I see having the scale to compete with Amazon at anything, and even then they're an order of magnitude behind. Just my opinion, again very US-centric.
- joyj2nd 6y ago
  Yes, sorry, I meant from a buyer perspective. As a side node: I am actually thinking of buying a tiny bankrupt travel equipment company. Friends advised against it because of "Amazon essentials". I would not sell on Amazon but it is a strong argument. Maybe someone has some words of wisdom regarding to this.
  - noizejoy 6y ago
    If you’re considering entering anything that depends on travel right now, you are much braver than me! Respect!
  - RandomBacon 6y ago
    > bankrupt What do they have that you want, or what do you think you're going to do differently? Why did it go bankrupt? If they claim it's only bankrupt because of COVID-19, then it must not have been very profitable (if at all) if they didn't have enough money to weather out at least 3 months. So I recommend not accepting that explanation.

deleted 6y ago

[deleted]

madaxe_again 6y ago

There’s a step before them undercutting you, and that’s the margin squeeze. I’ve seen it happen, repeatedly - also years ago. If you sold a high volume commodity on seller central, you’d see your commission go up, and up, and up, until you squeak - you either quit or you complain. They now know exactly how much that line nets you, and whether it’s worth selling.

econcon 6y ago

Same happens to us but we split sales to Shopify. Any idea if Shopify does same? It seems their ambitions keeps growing, they started charging percentage of revenue instead of flat subscription.

TimSchumann 6y ago
I've had this thought as well, and certainly there seems to be nothing preventing them from going down that road. Though at least with Shopify, it's theoretically easier to move your website to another platform/service or just roll your own. I'd say that you're basically at their mercy with regards to the charging a percentage of revenue though. I mean, that's how all card processors work. By default I trust Shopify more than Amazon, and in both instances your business is essentially succeeding 'at their pleasure' so to speak. So I thought on it for a minute. I think the main difference comes down to individuals in the business and culture. I'd elaborate more but I'm not sure I want to write that much speculative crap on the internet this morning, and I should get something productive done with my day. EDIT: Also just realized, that if you look at my spending habits, they 100% imply I trust Amazon more than Shopify.
exolymph 6y ago
Get worried when they start owning the customer relationship (or trying to). Already low-key happening in payments.
dmalik 6y ago
No Shopify does not. Amazon and Shopify are very different 1 1) https://stratechery.com/2019/shopify-and-the-power-of-platforms/ https://stratechery.com/2019/shopify-and-the-power-of-platfo...

chillacy 6y ago

Is life significantly better for retails selling through grocery or other retailers? What stops Safeway from one day selling a competing product under their store brand? And then they'd still be charging you for shelf placement.

deleted 6y ago

[deleted]

shrewduser 6y ago

I don't see how this is legal, Personally i don't think you should be able to run the market and compete in it at the same time. People talk a lot about other companies but the one i'm most worried about for stamping out startups and holding the economy back is amazon.

TimSchumann 6y ago
> I don't see how this is legal, Personally i don't think you should be able to run the market and compete in it at the same time. It may be, it may not be. I don't know, I am not a Lawyer nor do I play one on the internet. What I do know is that to date no individual, or collective, has had the financial or political will to test any of this in court. I suspect this is largely a positive feedback loop whereby any entity that has the financial or political capital to do so and stand a reasonable chance of winning has done the calculus and come to the conclusion that setting said legal precedent would do their own businesses more harm than it would net them in value from Amazon. Until that changes, meet the new boss same as the old boss.
- fuzzfactor 6y ago
  Any individual or collective which had the wherewithal could do the math and it will always be strongly in favor of working with Amazon rather than against it. Old boss wasn't going anywhere until a new one came along that was big enough to crush at will.

xwdv 6y ago

Come to Shopify.

CerealFounder 6y ago

It's pretty anti-competitive that a company can operate a marketplace and sell on the same marketplace. It would seem like an obvious law to enact.

2OEH8eoCRo0 6y ago
It's one of those Schrodinger's laws that applies to companies like Amazon. They're either a marketplace or not depending on the complaint. Complain about shady sellers and fakes? They're a marketplace and not responsible! Complain about anti competitive practices? Well this is clearly the Amazon store, says so right on it, clearly not a marketplace!
- selimthegrim 6y ago
  Yes, Prime Minister used to call these irregular verbs. I compete, you steal, he or she colludes...

slowwwclap 6y ago

I recently (pre-COVID19) sold all my Amazon and replaced it with Apple due to these issues. I feel Apple Pay, and the fast followers, will drive shopping to more platforms than Amazon by reducing friction for customers of independent websites (supported by USPS, UPS, Fedex... which Amazon has decided not to compete with anymore). With the Amazon COVID19 shipping delays, I’ve established many new shopping relationships online, and I hope that is the experience for many others, changing the market. The CEO of Shopify gives great talks about the important of this, so I do support that platform at this point.

amelius 6y ago

> It taught me a valuable lesson not to build my entire business on someone else's platform. Lots of developers do this already with iOS and the App store. Some people don't even have a choice. E.g. taxi drivers had their entire market turned into a platform. Same with restaurants and meal delivery.