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First of all, people like to complain about Amazon owned brands. But this is just retailing 101, nothing new here. Walk around a Costco and try and find a non C

First of all, people like to complain about Amazon owned brands. But this is just retailing 101, nothing new here. Walk around a Costco and try and find a non Costco branded product in a variety of categories. People seem to love Costco's Kirkland brand and (personally) I also enjoy the AmazonBasics brand. Why have I never heard a peep about Costco? You can make an argument that Amazon's market power has enabled it to gain success in some aspects of online retail. But to the proponents of the "market power has helped Amazon strangle so many industries", you have to answer - how did market power help: -Amazon grow Whole Foods? -AWS become the most popular cloud service? -Kindle become the most popular ereader? It seems to me a much better explanation than "market power abuse" is that Amazon's culture and people have enabled it to dominate a variety of unconnected industries.

nicoburns 6y ago
I think you're right that Amazon has come to dominate a lot of markets on merit. But it's still the case that having overly dominant players in a market is bad for... well everyone except the dominant player. It doesn't matter why or how it came to be.
- darawk 6y ago
  This is not universally true. It's bad if the dominant player uses their dominance to deliver sub-par quality at high prices. But so far Amazon doesn't seem to be doing that, at least in my user experience of it. It is bad that they might one day be able to parlay their dominance into harming consumers, but the dominance itself is not necessarily a bad thing, IMO.
  - apahwa 6y ago
    I completely disagree, the quality of products on Amazon has gone downhill over the past 5 years. You may attribute this to influx of bad merchants but it really comes down to Amazon not having the same incentives to properly rank items and remove bad actors. Instead it created Amazon Basics brand and steers users towards it. The influx of misc brand names and items that look exactly like each other just helps confuse consumers and make them lean towards Amazon Basics.
  - imtringued 6y ago
    Amazon has always been the more expensive online shop in my experience. You should expect to get overcharged by up to 20%.
tw04 6y ago
Such as what? I literally can’t think of a single Kirkland branded item that doesn’t have a name brand right next to it. Toilet paper, water, dog food, clothing, spices, oil, nuts, etc. I literally can’t think of a single Kirkland item that was used to run a name brand out of business. And they don’t do any “special placement” either. Amazon on the other hand....
- dblohm7 6y ago
  Not only that, but often times Costco's Kirkland branded item is made by the same supplier as the adjacent name brand.
  - nordsieck 6y ago
    > often times Costco's Kirkland branded item is made by the same supplier as the adjacent name brand. That's true for basically all store brands including Amazon Basics.
    - Larrikin 6y ago
      Amazon basic is never quality just cheap and not complete crap that will break immediately, especially not within the return window. It's only viable because there are currently so many counterfeit goods and downright awful products on Amazon in any category where the item is less than 100 bucks and especially under fifty. If I buy an Amazon basic usb cord I know it will transfer at the rate it says, unlike dozens of other cords on their site, but I still expect it to fray or break in some other way I wouldn't expect from paying a couple dollars more for anker. Kirkland usually is not a top of a brand category, except when they are putting out marketing to let you know how good their vodka is, but they are never competing at the bottom either.
  - dylan604 6y ago
    Why would you think AmazonBasics are not the same thing? The construction company my dad worked for was hired to redo the concrete flooring in the factory sockets were made. He told me how the sockets would come down the conveyor belt and then get pushed down different paths. At the end of the different paths, the sockets were stamped with Husky, Craftsman, etc. Different company names, same socket.
hrktb 6y ago
On Costco, it’s not a marketplace for third party sellers to ship to customers. Sure it’s closer to us to make analogies with traditional brands, but Amazon’s position is nothing similar. Then, the difference between business as usual and market power abuse is the extent to which you do something. The same way annoying someone and bullying is a matter of degree. Here being in a dominant position Is what makes it different.
- darawk 6y ago
  > On Costco, it’s not a marketplace for third party sellers to ship to customers. Sure it’s closer to us to make analogies with traditional brands, but Amazon’s position is nothing similar. Is it not? I mean, some of the details are different, but fundamentally Costco sells third party products. I don't really see how the distinction here is relevant to the issue at hand.
  - hrktb 6y ago
    Amazon doesn’t buy the third party products to resell to the client, nor does it pass delivery and production contracts with volume orders and quality checks etc. It’s a completely different business that has a different relationship with its sellers. In particular Amazon guarantees nothing and the seller is fully responsible for delivering the goods and satisfying the client. Going through Amazon’s warehouses is still a different case, but if I’m not mistaken it’s just a shipping agreement and nothing more. In specific cases Amazon might actually buy the goods from the seller first, but it’s the exception more than the rule.
sethherr 6y ago
Kirkland products are actually white label versions of the products they copy, produced by the company they are copying - so it’s an entirely different situation - ie Costco is paying brands for their products (albeit at a lower price), not stealing. Previous discussion: https://news.ycombinator.com/item?id=23912991 https://news.ycombinator.com/item?id=23912991
- deleted 6y ago
  [deleted]
- phonon 6y ago
  Do you think Amazon is making its own sunblock? I'm sure many of their self-branded products are being manufactured by name brands as well.
- missedthecue 6y ago
  Amazon doesn't manufacture their own Amazon Basics goods. They pay for it, albeit at a lower price.
- astura 6y ago
  This is common with many white label products and not at all unique to Costco. For example, I know which craft brewery white labels one of Trader Joe's brand beers (each type of beer might be made by a different brewery). Same production line, just different bottles.
alextheparrot 6y ago
The argument I’m familiar with goes as follows: Stores choose all their goods, bazaars provide stalls for merchants. People don’t like when one tries to masquerade as the other, or, be both. Costco, being a store, can choose foods or goods that have been rebranded or independently sourced and no one really cares — they are still fully autonomous. They have always taken ownership of the product, so a change in supply seems to be completely within the store’s wheelhouse. On the other hand, Amazon is a bazaar. Merchants line up, trying to get you to purchase from their stall using various tactics. Merchants get unhappy when they see that the bazaar’s guard uses their ledger to inform the head of the bazaar which merchants he could kick out. Not literally kick out, but be put in a worse position so that the bazaar’s own products are now the first ones people see. This conflict of interest is in direct opposition of the merchants and may be in opposition of the consumers. I personally really like Amazon Basics, as it tends to remove the brand cost. However, there’s a reason brands became popular in the first place — and the Amazon Basic brand is not one I associate with “quality”. I think the best part of the Amazon Basic brand is that it establishes a minimum bar of quality that Amazon generally needs. I know if so want the cheapest I go to them, otherwise I do my research or rely on brand reputation like I did before. This is becoming more of the case with Whole Foods, which I’ve started to avoid. They were a quality store and that quality (seems to) have gone down. The issue with the Whole Foods purchase is that there are lower quality grocery stores already, so I’d be interested in how they’re doing with that market.
- yonixw 6y ago
  I think it is more a problem of reach\scale. If a store has a reach just like a bazaar, we need to worry about how the store operates behind the scene just like the bazaar.
  - alextheparrot 6y ago
    Amazon seems to have only recently moved ahead of Walmart in revenue[0], so I find it hard to support the store inherently has a smaller reach than a bazaar. Am I misunderstanding your position or the nuances therein? I think my initial post agrees with your conclusion, though, which is that trying to be both is an area that is not as defined and is part of what is causing issues. [0] https://www.forbes.com/sites/laurendebter/2019/05/15/worlds-largest-retailers-2019-amazon-walmart-alibaba/#cedf0854171c https://www.forbes.com/sites/laurendebter/2019/05/15/worlds-...
an_opabinia 6y ago
Honestly it’s a dumb hill to choose to die on for the simple reason it is so obviously pro consumer as to be politically and legally untenable as a status quo antitrust matter.
PhineasRex 6y ago
This is more like a landlord evicting a restaurant and then opening a copy of that restaurant in the same location
- jdm2212 6y ago
  If the landlord can run the restaurant as profitably as a restaurant operator could, then either the landlord or the restaurant operator was in the wrong business before. Property management and restaurant management are very different businesses that require very different skills, and it's pretty rare to be able to do both very well, which is why landlords normally lease the space to professional restaurateurs. "Amazon took my idea and did the same thing at lower cost" is basically another way of saying "I wasn't adding any value but was still capturing a bunch of money on all those sales". Maybe there's an argument there that Amazon is freeloading on market research, and we should have some kind of intellectual property protection for market research, but that seems like it'd be a policy disaster. And there are lots of businesses out there already that piggyback off their competitors' market research (for instance, Burger King supposedly just locates anywhere McDonald's can operate profitably).
  - nrmitchi 6y ago
    > "Amazon took my idea and did the same thing at lower cost" This isn't always the case, as many merchants have pointed it out. Sometimes (I'm sure not all the time), it's more "Amazon took my idea, and all the validation work I did in order to develop and prove it and build a market for it, and is selling it below cost in order to force everyone else out of the market" I'm not passing judgement on whether that is okay or not; I'm pointing out that Amazon "winning marketshare" does not mean that they're doing it in a better way, or at a lower cost. Sometimes it just means that Amazon is able to spend/risk a whole lot more money than anyone else.
    - jdm2212 6y ago
      I'm not aware of any evidence that Amazon sells stuff below cost.
criddell 6y ago
Kindle definitely became the most popular ereader through a type of market power. The difference is that Amazon didn't win that market power, they were gifted it by publishers that insisted on DRM that would lock users into the Amazon ecosystem.

nicoburns 6y ago

I think you're right that Amazon has come to dominate a lot of markets on merit. But it's still the case that having overly dominant players in a market is bad for... well everyone except the dominant player. It doesn't matter why or how it came to be.

darawk 6y ago
This is not universally true. It's bad if the dominant player uses their dominance to deliver sub-par quality at high prices. But so far Amazon doesn't seem to be doing that, at least in my user experience of it. It is bad that they might one day be able to parlay their dominance into harming consumers, but the dominance itself is not necessarily a bad thing, IMO.
- apahwa 6y ago
  I completely disagree, the quality of products on Amazon has gone downhill over the past 5 years. You may attribute this to influx of bad merchants but it really comes down to Amazon not having the same incentives to properly rank items and remove bad actors. Instead it created Amazon Basics brand and steers users towards it. The influx of misc brand names and items that look exactly like each other just helps confuse consumers and make them lean towards Amazon Basics.
- imtringued 6y ago
  Amazon has always been the more expensive online shop in my experience. You should expect to get overcharged by up to 20%.

tw04 6y ago

Such as what? I literally can’t think of a single Kirkland branded item that doesn’t have a name brand right next to it. Toilet paper, water, dog food, clothing, spices, oil, nuts, etc. I literally can’t think of a single Kirkland item that was used to run a name brand out of business. And they don’t do any “special placement” either. Amazon on the other hand....

dblohm7 6y ago
Not only that, but often times Costco's Kirkland branded item is made by the same supplier as the adjacent name brand.
- nordsieck 6y ago
  > often times Costco's Kirkland branded item is made by the same supplier as the adjacent name brand. That's true for basically all store brands including Amazon Basics.
  - Larrikin 6y ago
    Amazon basic is never quality just cheap and not complete crap that will break immediately, especially not within the return window. It's only viable because there are currently so many counterfeit goods and downright awful products on Amazon in any category where the item is less than 100 bucks and especially under fifty. If I buy an Amazon basic usb cord I know it will transfer at the rate it says, unlike dozens of other cords on their site, but I still expect it to fray or break in some other way I wouldn't expect from paying a couple dollars more for anker. Kirkland usually is not a top of a brand category, except when they are putting out marketing to let you know how good their vodka is, but they are never competing at the bottom either.
- dylan604 6y ago
  Why would you think AmazonBasics are not the same thing? The construction company my dad worked for was hired to redo the concrete flooring in the factory sockets were made. He told me how the sockets would come down the conveyor belt and then get pushed down different paths. At the end of the different paths, the sockets were stamped with Husky, Craftsman, etc. Different company names, same socket.

hrktb 6y ago

On Costco, it’s not a marketplace for third party sellers to ship to customers. Sure it’s closer to us to make analogies with traditional brands, but Amazon’s position is nothing similar. Then, the difference between business as usual and market power abuse is the extent to which you do something. The same way annoying someone and bullying is a matter of degree. Here being in a dominant position Is what makes it different.

darawk 6y ago
> On Costco, it’s not a marketplace for third party sellers to ship to customers. Sure it’s closer to us to make analogies with traditional brands, but Amazon’s position is nothing similar. Is it not? I mean, some of the details are different, but fundamentally Costco sells third party products. I don't really see how the distinction here is relevant to the issue at hand.
- hrktb 6y ago
  Amazon doesn’t buy the third party products to resell to the client, nor does it pass delivery and production contracts with volume orders and quality checks etc. It’s a completely different business that has a different relationship with its sellers. In particular Amazon guarantees nothing and the seller is fully responsible for delivering the goods and satisfying the client. Going through Amazon’s warehouses is still a different case, but if I’m not mistaken it’s just a shipping agreement and nothing more. In specific cases Amazon might actually buy the goods from the seller first, but it’s the exception more than the rule.

sethherr 6y ago

Kirkland products are actually white label versions of the products they copy, produced by the company they are copying - so it’s an entirely different situation - ie Costco is paying brands for their products (albeit at a lower price), not stealing. Previous discussion: https://news.ycombinator.com/item?id=23912991 https://news.ycombinator.com/item?id=23912991

deleted 6y ago
[deleted]
phonon 6y ago
Do you think Amazon is making its own sunblock? I'm sure many of their self-branded products are being manufactured by name brands as well.
missedthecue 6y ago
Amazon doesn't manufacture their own Amazon Basics goods. They pay for it, albeit at a lower price.
astura 6y ago
This is common with many white label products and not at all unique to Costco. For example, I know which craft brewery white labels one of Trader Joe's brand beers (each type of beer might be made by a different brewery). Same production line, just different bottles.

alextheparrot 6y ago

The argument I’m familiar with goes as follows: Stores choose all their goods, bazaars provide stalls for merchants. People don’t like when one tries to masquerade as the other, or, be both. Costco, being a store, can choose foods or goods that have been rebranded or independently sourced and no one really cares — they are still fully autonomous. They have always taken ownership of the product, so a change in supply seems to be completely within the store’s wheelhouse. On the other hand, Amazon is a bazaar. Merchants line up, trying to get you to purchase from their stall using various tactics. Merchants get unhappy when they see that the bazaar’s guard uses their ledger to inform the head of the bazaar which merchants he could kick out. Not literally kick out, but be put in a worse position so that the bazaar’s own products are now the first ones people see. This conflict of interest is in direct opposition of the merchants and may be in opposition of the consumers. I personally really like Amazon Basics, as it tends to remove the brand cost. However, there’s a reason brands became popular in the first place — and the Amazon Basic brand is not one I associate with “quality”. I think the best part of the Amazon Basic brand is that it establishes a minimum bar of quality that Amazon generally needs. I know if so want the cheapest I go to them, otherwise I do my research or rely on brand reputation like I did before. This is becoming more of the case with Whole Foods, which I’ve started to avoid. They were a quality store and that quality (seems to) have gone down. The issue with the Whole Foods purchase is that there are lower quality grocery stores already, so I’d be interested in how they’re doing with that market.

yonixw 6y ago
I think it is more a problem of reach\scale. If a store has a reach just like a bazaar, we need to worry about how the store operates behind the scene just like the bazaar.
- alextheparrot 6y ago
  Amazon seems to have only recently moved ahead of Walmart in revenue[0], so I find it hard to support the store inherently has a smaller reach than a bazaar. Am I misunderstanding your position or the nuances therein? I think my initial post agrees with your conclusion, though, which is that trying to be both is an area that is not as defined and is part of what is causing issues. [0] https://www.forbes.com/sites/laurendebter/2019/05/15/worlds-largest-retailers-2019-amazon-walmart-alibaba/#cedf0854171c https://www.forbes.com/sites/laurendebter/2019/05/15/worlds-...

an_opabinia 6y ago

Honestly it’s a dumb hill to choose to die on for the simple reason it is so obviously pro consumer as to be politically and legally untenable as a status quo antitrust matter.

PhineasRex 6y ago

This is more like a landlord evicting a restaurant and then opening a copy of that restaurant in the same location

jdm2212 6y ago
If the landlord can run the restaurant as profitably as a restaurant operator could, then either the landlord or the restaurant operator was in the wrong business before. Property management and restaurant management are very different businesses that require very different skills, and it's pretty rare to be able to do both very well, which is why landlords normally lease the space to professional restaurateurs. "Amazon took my idea and did the same thing at lower cost" is basically another way of saying "I wasn't adding any value but was still capturing a bunch of money on all those sales". Maybe there's an argument there that Amazon is freeloading on market research, and we should have some kind of intellectual property protection for market research, but that seems like it'd be a policy disaster. And there are lots of businesses out there already that piggyback off their competitors' market research (for instance, Burger King supposedly just locates anywhere McDonald's can operate profitably).
- nrmitchi 6y ago
  > "Amazon took my idea and did the same thing at lower cost" This isn't always the case, as many merchants have pointed it out. Sometimes (I'm sure not all the time), it's more "Amazon took my idea, and all the validation work I did in order to develop and prove it and build a market for it, and is selling it below cost in order to force everyone else out of the market" I'm not passing judgement on whether that is okay or not; I'm pointing out that Amazon "winning marketshare" does not mean that they're doing it in a better way, or at a lower cost. Sometimes it just means that Amazon is able to spend/risk a whole lot more money than anyone else.
  - jdm2212 6y ago
    I'm not aware of any evidence that Amazon sells stuff below cost.

criddell 6y ago

Kindle definitely became the most popular ereader through a type of market power. The difference is that Amazon didn't win that market power, they were gifted it by publishers that insisted on DRM that would lock users into the Amazon ecosystem.