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Should Costco/Walmart be allowed to sell products along competing ones in their own marketplace? No! Of course! I’d like to see how well they would perform on

Should Costco/Walmart be allowed to sell products along competing ones in their own marketplace? No! Of course! I’d like to see how well they would perform on Target/Best Buy shelves, they probably wouldn’t sell at all. Therefore the only origin for their success is an abuse of marketplace ownership, and it has distorted the market, and therefore has harmed consumers by simply reducing quality brand’s ability to scale, by imposing higher shelf costs for the same brand exposure, and therefore fewer sales. Although it’s not a monopoly — and another law should be drafted against competing on a marketplace you own.

lotsofpulp 6y ago
Should Costco/Walmart be able to sell their own brands on their own website? Should retailers who sell other brands be able to sell their own brand at all? > and therefore has harmed consumers by simply reducing quality brand’s ability to scale, by imposing higher shelf costs for the same brand exposure, and therefore fewer sales. How come brand name items cost more on the brand’s website compared to Walmart’s brands on Walmart’s website? There is no shelf cost online.
- laurent92 6y ago
  Isn’t it because resellers like Walmart always require lower prices than what the brand sells publicly, otherwise brands would always undercut all their resellers? It is the case with electronics, I don’t know for food.
  - lotsofpulp 6y ago
    I doubt it, that would be ascribing immense sway to Walmart over other enormous companies like Procter and Gamble, Unilever, etc. What is more likely is this is a simple example of price discrimination or price segmentation. Theoretically, you can earn the most money by selling each item at the maximum price the buyer is willing to pay. But if the buyers all have varying levels of income or willingness to pay, how do you scale this? Obviously, you can't barter with every single person for every $5 bottle of lotion. What you can do is create various brands, and maybe differentiate the products slightly, or maybe not. Similar to binning with silicon chips where the chips with higher probabilities of performing better and longer get sold for higher. So Walmart can go to Johnson and Johnson and say hey, you're selling Lubriderm for $5, make me some lotion that's similar or lower in quality (but still acceptable to Walmart), and we'll sell that for $4. Now, J&J get to sell their $5 lotion to people willing to pay $5, and a cheaper line to people wanting to pay less, but they don't have to lose the people paying $5. And they do this in many, many layers. P&G, Unilever, J&J, and others all have countless brands they use to hit various price points. And the products may be the same, or may be marginally less in quality. And maybe it behooves some people to pay more for the extra assurance of quality.
kelnos 6y ago
I feel like this ship sailed many many decades (centuries?) ago. Pretty much any store aside from small mom-and-pops will have their own brand of commodity items that they sell alongside third-party brands. Complaints about those seem to be pretty rare. I think the difference is that the playing field is more level. Most stores that I've seen won't make it harder to buy the name-brand version or easier to buy the store-brand version (aside from the store brand often being cheaper). They tend not to really market the store brand, so the name-brand version generally has advertising behind it and is often seen as superior, even when it really isn't. The two versions sit side-by-side on the shelves without preferential placement to either. Meanwhile, I wouldn't be surprised if Amazon gives preferential treatment in search results to stuff that gives them a better margin, regardless of whether or not it's a better product or a better value. I don't necessarily agree that they wouldn't sell outside their own store, though. I generally look at the store brand as the usually-cheaper "generic brand". For example, if I'm looking for cold medicine, I'll never buy NyQuil, because the equivalent store brand is more or less the exact same thing and is cheaper. But I don't really care which store brand. If the CVS-branded version somehow ended up in a Walgreens, I'd still buy it. (Obviously CVS would never sell the Walgreens version, but... yeah.) (Speaking of mom-and-pops, I actually find it annoying when I need cold medicine, walk into my local corner store, and only find NyQuil rather than the generic CVS/Walgreens/whatever store brand. The corner store usually sells NyQuil at an even higher price than the chain pharmacy would, and there's no alternative.)
basch 6y ago
>I’d like to see how well they would perform on Target/Best Buy shelves I don't understand that comparison at all. Do you know what percent of the Target floorspace is Target owned brands? Or Ikea? Imagine being a store that sells its own product, AND wants to augment their own product with some third party products. Like a sweatshirt company that also throws sunglasses on a rack. They arent really "making" either of these things. In one case they are throwing some branding over a product and having having it manufactured by contract. The other they buy generic wholesale. Because they want to sell both branded and unbranded goods they shouldnt exist? That would shut down nearly every retail business in the country overnight. Where has the idea of a neutral marketplace ever been realized in brick and mortar America?

lotsofpulp 6y ago

Should Costco/Walmart be able to sell their own brands on their own website? Should retailers who sell other brands be able to sell their own brand at all? > and therefore has harmed consumers by simply reducing quality brand’s ability to scale, by imposing higher shelf costs for the same brand exposure, and therefore fewer sales. How come brand name items cost more on the brand’s website compared to Walmart’s brands on Walmart’s website? There is no shelf cost online.

laurent92 6y ago
Isn’t it because resellers like Walmart always require lower prices than what the brand sells publicly, otherwise brands would always undercut all their resellers? It is the case with electronics, I don’t know for food.
- lotsofpulp 6y ago
  I doubt it, that would be ascribing immense sway to Walmart over other enormous companies like Procter and Gamble, Unilever, etc. What is more likely is this is a simple example of price discrimination or price segmentation. Theoretically, you can earn the most money by selling each item at the maximum price the buyer is willing to pay. But if the buyers all have varying levels of income or willingness to pay, how do you scale this? Obviously, you can't barter with every single person for every $5 bottle of lotion. What you can do is create various brands, and maybe differentiate the products slightly, or maybe not. Similar to binning with silicon chips where the chips with higher probabilities of performing better and longer get sold for higher. So Walmart can go to Johnson and Johnson and say hey, you're selling Lubriderm for $5, make me some lotion that's similar or lower in quality (but still acceptable to Walmart), and we'll sell that for $4. Now, J&J get to sell their $5 lotion to people willing to pay $5, and a cheaper line to people wanting to pay less, but they don't have to lose the people paying $5. And they do this in many, many layers. P&G, Unilever, J&J, and others all have countless brands they use to hit various price points. And the products may be the same, or may be marginally less in quality. And maybe it behooves some people to pay more for the extra assurance of quality.

kelnos 6y ago

I feel like this ship sailed many many decades (centuries?) ago. Pretty much any store aside from small mom-and-pops will have their own brand of commodity items that they sell alongside third-party brands. Complaints about those seem to be pretty rare. I think the difference is that the playing field is more level. Most stores that I've seen won't make it harder to buy the name-brand version or easier to buy the store-brand version (aside from the store brand often being cheaper). They tend not to really market the store brand, so the name-brand version generally has advertising behind it and is often seen as superior, even when it really isn't. The two versions sit side-by-side on the shelves without preferential placement to either. Meanwhile, I wouldn't be surprised if Amazon gives preferential treatment in search results to stuff that gives them a better margin, regardless of whether or not it's a better product or a better value. I don't necessarily agree that they wouldn't sell outside their own store, though. I generally look at the store brand as the usually-cheaper "generic brand". For example, if I'm looking for cold medicine, I'll never buy NyQuil, because the equivalent store brand is more or less the exact same thing and is cheaper. But I don't really care which store brand. If the CVS-branded version somehow ended up in a Walgreens, I'd still buy it. (Obviously CVS would never sell the Walgreens version, but... yeah.) (Speaking of mom-and-pops, I actually find it annoying when I need cold medicine, walk into my local corner store, and only find NyQuil rather than the generic CVS/Walgreens/whatever store brand. The corner store usually sells NyQuil at an even higher price than the chain pharmacy would, and there's no alternative.)

basch 6y ago

>I’d like to see how well they would perform on Target/Best Buy shelves I don't understand that comparison at all. Do you know what percent of the Target floorspace is Target owned brands? Or Ikea? Imagine being a store that sells its own product, AND wants to augment their own product with some third party products. Like a sweatshirt company that also throws sunglasses on a rack. They arent really "making" either of these things. In one case they are throwing some branding over a product and having having it manufactured by contract. The other they buy generic wholesale. Because they want to sell both branded and unbranded goods they shouldnt exist? That would shut down nearly every retail business in the country overnight. Where has the idea of a neutral marketplace ever been realized in brick and mortar America?