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What Amazon is typically accused of, having store brands, is what every retailer does. This is simply not true and displays a fundamental misunderstanding of h
by gamblor956 6y ago
What Amazon is typically accused of, having store brands, is what every retailer does.
This is simply not true and displays a fundamental misunderstanding of how retail works. A retailer pays the supplier for the stock of inventory that goes on its shelves, Amazon does not. (It is only in very rare cases the supplier only gets paid for actual sales of retail inventory; generally this happens for new products offered on a consignment basis to demonstrate market demand.) Frequently, retailers will share sales data with their suppliers so that the suppliers can make more attractive products, because then they can sell more units to end customers or charge higher markups.
But importantly, with retail, the retailer is the supplier's customer, not you.
In contrast, Amazon does not buy the inventory from the suppliers, instead it charges them money to store their inventory in Amazon's warehouses. On top of that, Amazon uses its access to sales data of external suppliers' products to design competing products which it then offers for sale, utilizing its ownership of the platform to promote its own products above competing products. While both of these latter two activities are problematic, it is the last one that definitely runs afoul of antitrust law (and was what got Microsoft into trouble with the EU).
The problem with Amazon: it is using its position as the controller of the dominant online marketplace to establish a position in the market for individual categories of goods in a manner that interferes with the normal dynamics of the market.
- nearbuy 6y ago> In contrast, Amazon does not buy the inventory from the suppliers, instead it charges them money to store their inventory in Amazon's warehouses. That part seems entirely reasonable. Would you rather Amazon pay sellers for unsold stock? That seems like a sure way to get Amazon to reduce the number of 3rd party sellers they stock.
- henryfjordan 6y agoAmazon's model is entirely reasonable until they become a 1st-party seller that competes with 3rd parties. Then it is all too natural for there to be some market abuse. For instance, configuring search ranking to always put the Amazon branded option in the top results is Amazon abusing their market position as a marketplace/distributor to now directly sell goods.
- deleted 6y ago[deleted]