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I don't get how people can call them a monopoly in one breath and then in the next breath say that their competitive advantage is pro-consumer pricing

scsilver 6y ago
https://en.m.wikipedia.org/wiki/Predatory_pricing https://en.m.wikipedia.org/wiki/Predatory_pricing
- missedthecue 6y ago
  Retailing is an extremely low barrier to entry industry, especially online retailing. Predatory Pricing may have worked in the era of railroads, which have an extremely high startup cost, but it does not work work for online retailing. Amazon cannot achieve ~100% permanent market share by lowering the prices and then raising them.
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rdtwo 6y ago
They have an unfair logistics advantage that allows them to crush everyone in cost. Part of that comes from contacts with the USPS that are super low price
upbeat_general 6y ago
The two aren’t mutually exclusive at all. Sure, monopolies often have higher pricing but for something like Amazon where the barrier to entry is just a website, of course they need competitive pricing. They’re able to offer that competitive pricing because of the enormous economies of scale, bargaining power, etc. that no one else has.
- rualca 6y ago
  > (...) but for something like Amazon where the barrier to entry is just a website, This comment is totally alienated from Amazon's business. Amazon is not a website. Amazon is a retail company, and their barrier to entry is their logistics infrastructure. You don't buy stuff from Amazon because you can click a button. You buy from Amazon because it can ship your order right to your front door in a matter of hours or days, and do it without any added cost, and even allows you to return everything for free no questions asked. Anyone can put up an website in a week, but no one can put up a high throughout low latency logistics network that allows for a turnaround time between click and doorstep as low as a few hours. In fact, Amazon's website is notoriously horrible in classification and search. I'd argue that Amazon dominates in spite of its website in general, and search and detail pages in particular.
  - upbeat_general 6y ago
    If you read my comment I think it’s clear that’s exactly what I was saying (albeit in less detail).

scsilver 6y ago

https://en.m.wikipedia.org/wiki/Predatory_pricing https://en.m.wikipedia.org/wiki/Predatory_pricing

missedthecue 6y ago
Retailing is an extremely low barrier to entry industry, especially online retailing. Predatory Pricing may have worked in the era of railroads, which have an extremely high startup cost, but it does not work work for online retailing. Amazon cannot achieve ~100% permanent market share by lowering the prices and then raising them.
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rdtwo 6y ago

They have an unfair logistics advantage that allows them to crush everyone in cost. Part of that comes from contacts with the USPS that are super low price

upbeat_general 6y ago

The two aren’t mutually exclusive at all. Sure, monopolies often have higher pricing but for something like Amazon where the barrier to entry is just a website, of course they need competitive pricing. They’re able to offer that competitive pricing because of the enormous economies of scale, bargaining power, etc. that no one else has.

rualca 6y ago
> (...) but for something like Amazon where the barrier to entry is just a website, This comment is totally alienated from Amazon's business. Amazon is not a website. Amazon is a retail company, and their barrier to entry is their logistics infrastructure. You don't buy stuff from Amazon because you can click a button. You buy from Amazon because it can ship your order right to your front door in a matter of hours or days, and do it without any added cost, and even allows you to return everything for free no questions asked. Anyone can put up an website in a week, but no one can put up a high throughout low latency logistics network that allows for a turnaround time between click and doorstep as low as a few hours. In fact, Amazon's website is notoriously horrible in classification and search. I'd argue that Amazon dominates in spite of its website in general, and search and detail pages in particular.
- upbeat_general 6y ago
  If you read my comment I think it’s clear that’s exactly what I was saying (albeit in less detail).