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Why does it matter that this happened with Amazon? It could have also happened with ebay, walmart, or a local uncle bob's discount closet shop. We have a judi

Why does it matter that this happened with Amazon? It could have also happened with ebay, walmart, or a local uncle bob's discount closet shop. We have a judicial system to deal with issues like this which generally handles things fairly regardless of the size of each party.

bredren 6y ago
Walmart was long known for its strong arming of its suppliers. I’m sure there are plenty of people out there glad to see Amazon beating them. https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know
- Areading314 6y ago
  Yes Walmart is the textbook example of a monopsonist being able to extract steady profits while creating a race-to-the-bottom for prices among their suppliers. Great for end customers, but harmful nonetheless.
  - bigmattystyles 6y ago
    Great for end customers at first, but then what are you left with.
    - kortilla 6y ago
      Still great? Walmart prices are still low/lowest where I live.
      - ender341341 6y ago
        but they're often low because they're selling bottom barrel quality goods (like electronics with cheap capacitors that fail quickly or clothes with lower quality fabrics & sewing that don't last). Even products that look the same as other stores will commonly have a Walmart specific SKU that uses cheaper components.
        5040 6y ago
        Sadly, this is what customers want. When given the option of a 30$ belt that lasts for life or a 5$ belt that lasts one year, many will go for the latter, and this is who Walmart caters to.
        kortilla 6y ago
        So? People clearly prefer cheap the majority of the time. In the age of the Internet, high quality is a click away.
  - kriro 6y ago
    I don't agree Walmart would make for a textbook example. I'd argue they were/are not even a monopsonist with regard to their suppliers. They might be a strong regional force but they have failed (or chosen) to move out of their regional power position. That's not a bad thing and in fact is a strength. I'm pretty sure they were cited as an example of good strategy for exactly that in "Competition Demistified" but don't have the book with me right now. However, in the day and age of modern logistics I'd argue that their suppliers could have sold to other customers in other states. Ultimately I suppose it depends on how we define a market (ultra regional or wider) and how high the transaction costs (+other extra costs) of the suppliers would be to move to another customer. The classical example in "The Economics of Imperfect Competition" was the labor force in a small town (mining iirc., once again not at my bookshelf). I suppose that would give precedent to the fact that small markets "count". However most studies on the topic I am aware of are about labor not supply/demand structures. And I'd argue it is "easier" for a supplier to move their wares to another customer than for a (specialized) worker to move to another company (uproot family etc.). Additionally some of the suppliers of Walmart are in pretty strong negotiating positions themselves (Unilever etc.). At least there's enough doubt in my mind to say Walmart's supplier relations are "a textbook example of a monopsonist".
    - johnrgrace 6y ago
      They aren't quite a monopsonist, but the difference for most companies is academic. You've never sold to walmart, I have. If they put your physical product on the shelf you'll sell a lot of units. No one else has the shelves walmart does. If you are not on the walmart shelf there is NO way to get the same number of units sold.
gnopgnip 6y ago
Amazon requires mediation or arbitration, so there is no access to the judicial system
- adamparsons 6y ago
  Perhaps this is the issue, having a legal system that you can opt out of. Sounds godawful.
  - bencollier49 6y ago
    I'd be interested to know if this is a problem in other countries.
  - jacobush 6y ago
    European gentry also ruled their local underlings, who had no access to the Kings Justice. There is precedent. Welcome to Amazon-land.
  - unishark 6y ago
    Why is arbitration so bad exactly? The implication seems to be that Amazon has a better chance of winning, but I never see how that is backed up.
    - detaro 6y ago
      Arbitration is done by a company picked by Amazon, paid by Amazon, hoping to remain in business with Amazon, deciding about a conflict between Amazon and a random customer. In whose direction are they likely to err?
      - gruez 6y ago
        I can't comment on the arbitration clauses that Amazon uses, but the arbitration clauses I've seen usually says the arbitrator is randomly assigned by the american arbitration association.
      - unishark 6y ago

bredren 6y ago

Walmart was long known for its strong arming of its suppliers. I’m sure there are plenty of people out there glad to see Amazon beating them. https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know

Areading314 6y ago
Yes Walmart is the textbook example of a monopsonist being able to extract steady profits while creating a race-to-the-bottom for prices among their suppliers. Great for end customers, but harmful nonetheless.
- bigmattystyles 6y ago
  Great for end customers at first, but then what are you left with.
  - kortilla 6y ago
    Still great? Walmart prices are still low/lowest where I live.
    - ender341341 6y ago
      but they're often low because they're selling bottom barrel quality goods (like electronics with cheap capacitors that fail quickly or clothes with lower quality fabrics & sewing that don't last). Even products that look the same as other stores will commonly have a Walmart specific SKU that uses cheaper components.
      - 5040 6y ago
        Sadly, this is what customers want. When given the option of a 30$ belt that lasts for life or a 5$ belt that lasts one year, many will go for the latter, and this is who Walmart caters to.
      - kortilla 6y ago
        So? People clearly prefer cheap the majority of the time. In the age of the Internet, high quality is a click away.
- kriro 6y ago
  I don't agree Walmart would make for a textbook example. I'd argue they were/are not even a monopsonist with regard to their suppliers. They might be a strong regional force but they have failed (or chosen) to move out of their regional power position. That's not a bad thing and in fact is a strength. I'm pretty sure they were cited as an example of good strategy for exactly that in "Competition Demistified" but don't have the book with me right now. However, in the day and age of modern logistics I'd argue that their suppliers could have sold to other customers in other states. Ultimately I suppose it depends on how we define a market (ultra regional or wider) and how high the transaction costs (+other extra costs) of the suppliers would be to move to another customer. The classical example in "The Economics of Imperfect Competition" was the labor force in a small town (mining iirc., once again not at my bookshelf). I suppose that would give precedent to the fact that small markets "count". However most studies on the topic I am aware of are about labor not supply/demand structures. And I'd argue it is "easier" for a supplier to move their wares to another customer than for a (specialized) worker to move to another company (uproot family etc.). Additionally some of the suppliers of Walmart are in pretty strong negotiating positions themselves (Unilever etc.). At least there's enough doubt in my mind to say Walmart's supplier relations are "a textbook example of a monopsonist".
  - johnrgrace 6y ago
    They aren't quite a monopsonist, but the difference for most companies is academic. You've never sold to walmart, I have. If they put your physical product on the shelf you'll sell a lot of units. No one else has the shelves walmart does. If you are not on the walmart shelf there is NO way to get the same number of units sold.

gnopgnip 6y ago

Amazon requires mediation or arbitration, so there is no access to the judicial system

adamparsons 6y ago
Perhaps this is the issue, having a legal system that you can opt out of. Sounds godawful.
- bencollier49 6y ago
  I'd be interested to know if this is a problem in other countries.
- jacobush 6y ago
  European gentry also ruled their local underlings, who had no access to the Kings Justice. There is precedent. Welcome to Amazon-land.
- unishark 6y ago
  Why is arbitration so bad exactly? The implication seems to be that Amazon has a better chance of winning, but I never see how that is backed up.
  - detaro 6y ago
    Arbitration is done by a company picked by Amazon, paid by Amazon, hoping to remain in business with Amazon, deciding about a conflict between Amazon and a random customer. In whose direction are they likely to err?
    - gruez 6y ago
      I can't comment on the arbitration clauses that Amazon uses, but the arbitration clauses I've seen usually says the arbitrator is randomly assigned by the american arbitration association.
    - unishark 6y ago