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Seems like commenters are misreading the lawsuit here. My first instinct after reading the top paragraphs of Stoller's post was also "so what, this seems fine,"

Seems like commenters are misreading the lawsuit here. My first instinct after reading the top paragraphs of Stoller's post was also "so what, this seems fine," but if you read to the end and see what the suit is really alleging, it's not just a policy that punished sellers for offering discounts on their products when sold off Amazon. It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers, which is much higher than other online marketplaces and obviously less than the 0% they'd charge themselves to sell through their own site (though they'd still need to pay money to operate the site), and then punishing them if they sell somewhere else that has lower fees for a lower price. That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. The post is still misleading in that it doesn't mean Amazon is raising prices across the board by 30-45%. But they are raising prices across the board by whatever the delta is between their fees and WalMart's fees, or some other marketplace that charges even less, minus the difference in shipping. Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. But that doesn't happen precisely because Amazon's massive subscribed user base represents so much of the market that no can afford not to sell there, which is seemingly the definition of a monopoly and why legal intervention is called for. Lower-cost marketplaces can only compete if Amazon is not allowed to blackball sellers from access to the only customer base that matters.

tracer4201 5y ago
The crux of the article was that you lose winning the buy offer if you sell elsewhere cheaper. Okay - so who wins the buy box? Someone who is actually offering a cheaper price, one that’s more enticing for me as the shopper? How is that hurtful for the consumer? You’re calling that “punishment”, but in fact as a shopper I just want to see the lowest price with the fastest shipping. The seller fee bit part isn’t relevant. Wal Mart and Target or any other site could well offer lower seller fees - in fact, they’d HAVE to undercut Amazon in order to catch up with Amazon. But that doesn’t mean Amazon has to bring their prices down. I don’t buy that. One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service. There is quite a bit to this article that’s disingenuous, for example - > How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price. If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. But this isn’t quite true. Using hyperbole like “money laundering” also doesn’t help the case. > Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy. Again, hyperbole. The author merely brushes off the fact that these sellers don’t HAVE to sell on Amazon in the first place. Presumably, Amazon is growing because more and more sellers flock to their website. If it’s a bad deal for sellers, they can sell on other websites. The article makes a one line claim - representing it as a ground truth - that a new business HAS to sell on Amazon. So this is clearly stating that no business can survive if they only have their own store presence or sell on Amazons competitors. I don’t believe this is true (based on a very successful family business). Yes my data point is anecdotal, but if we’re saying no business can survive without the ability to sell on Amazon, then the entire article is moot - the simple reason for breaking up Amazon is that no small business can survive without Amazon. Again, I don’t think that’s true, and the author knows that - hence, the long wordy article to come at the issue from other angles while sprinkling in hyperbole.
- avianlyric 5y ago
  I don't understand how losing the buy box for offering your products cheaper elsewhere can be anything but punishment. You say yourself that picking the cheapest price plus shipping is what consumers want, so how a companies pricing elsewhere relevant to a consumer buying on Amazon? You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart. This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up. If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers. > If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store? > If it’s a bad deal for sellers, they can sell on other websites. Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL.
  - tracer4201 5y ago
    >You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart. I'm on Amazon page right now. It tells me that I can get a product the fastest with the buy box offer, or I can get a cheaper price from other "offers". And when I click that link, it shows me higher and lower prices, but the lower prices have a delivery date (actually a range, between X and Y) more than a week out. Let me start just by saying that the offer is still shown. It's not immediately in the buy box, but as a shopper, I have access to the lower prices and can buy from a different seller. This information is not obfuscated from me or hidden through some dark pattern. >This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up. >If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers. The incentive goes away if you don't sell on Amazon, right? Any Amazon "strangle" (your word, not mine) only exists because people choose to sell on Amazon, right? >How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store? See my previous point. Don't sell on Amazon. >Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL. I don't agree with this. Companies like Comcast are deemed monopolies because their customers don't have a choice. Just as you stated, Comcast gives me high speed broadband. But my choice is limited to Comcast, and the only competitor (if there even is one in my neighborhood) will offer 2MB DSL. This is NOT the case with online shopping. I can purchase an iPad from Apple, Amazon, Best Buy, and a bunch of other websites. I can purchase my razor blades online from Target, Amazon, Gillette, etc. including several of the grocery stores in my city (who will ship them. Yes people shop at Amazon, but it's because they choose to. I have the option of not shopping with Amazon. As a matter of fact, I bought 10 "5 Star" brand notebooks on Amazon. I saw later that Wal-Mart had them for $3 instead of $7/notebook. I sent them back to Amazon and got them from Wal-Mart instead. With internet service, many people don't have a choice but to go with Comcast, Cox, or whichever single provider offers the service in their neighborhood.
felixfbecker 5y ago
+1 the point of their algorithm not putting sellers in the buy box that offer their product elsewhere cheaper is the problem they should absolutely be ruled to stop that practice by a court. Nobody can make an argument for how that is possibly GOOD for competition and the consumer.
- murgindrag 5y ago
  As a consumer, I've been !@#$%'ed a few times when I've bought from Amazon and didn't notice it was a 3rd party seller with their own shipping method. One time, I was !@#$% to the tune of a few hundred bucks. Amazon can do more QC if it goes through them.
  - the_local_host 5y ago
    I don't know why you're getting downvoted, this is my experience as well. It's to the point where if it doesn't ship from Amazon, I don't buy it. The last thing I accidentally bought from a non-Amazon shipper arrived in a semi-destroyed box, inside a too-small bubble-wrap envelope, apparently shipped from someone's condominium (I guess they bought in bulk and repackaged?)
    - mattmcknight 5y ago
      Absolutely. I'd pay more if I could look at Amazon without any of the third party garbage.
    - stjohnswarts 5y ago
      Probably "buyer beware", if you're buying something that expensive then you should look around and not just assume Amazon has the lowest price.
      - CyberDildonics 5y ago
        It is not always that simple. Part of the arbitrage can be generic things from aliexpress bought in bulk and shipped from china over 8-10 weeks. The mark up on amazon is partly the fact that the long ship time has already been done.
forgithubs 5y ago
That's just far from being a monopoly. I subscribe to Amazon because I've always got an excellent service. I also buy on Ebay, Craglist, Walmart and diverse retailers that are entering the eCommerce game. The thing here is that markets take longer to work but if you look around, there is plenty of competition.
- diffeomorphism 5y ago
  > That's just far from being a monopoly. Correct, but besides the point. The relevant laws are not just about monopolies. >but if you look around, there is plenty of competition. Also correct, but again not really relevant.
  - forgithubs 5y ago
    I guess it is relevant to the "Amazon is an evil and monopolistic organisation" theme. Maybe not relevant for the lawsuit specified in the report, they are certainly entitled to sue for any reason. But the classic theme still show its nose. On an other note, if amazon has 128 million prime subscribers and they like the service, it is something politicians need to be aware if they still want to be elected.
- matsemann 5y ago
  Many other comments here in addition to yours fail to grasp that one doesn't have to have a literal 100% monopoly to show monopolistic behavior that leaves the customers as a whole worse off. Like this article says, prices are increased across the board because of how Amazon acts.
  - forgithubs 5y ago
    Don't paint amazon subscribers as victims here. I am entirely satisfied of the time saved and the cost of Amazon products I buy. The yelling comes from the Amazon sellers side, not from the customers. There is plenty of competition for me to shop around, and if there are none, I'd rather buy from Amazon as I trust that they reduce the costs , fees and taxes effectively. I would argue that the government should do less and not more. If they really want competition to grow, they could stop charging capital gains on every item a seller flip. For example, when I was selling on Ebay, after the platform fees, the shipping fees, and the government taxes, it's just not worth it to enter the sector as a small guy.
bryanrasmussen 5y ago
>That seems like legitimately monopolistic behavior It seems monopsonistic to me, I believe it should be illegal but not sure it actually is?
- rsj_hn 5y ago
  Correct. A lot of people assume that if something doesn't seem "fair", then it must be illegal. And they assume that if a company uses it's market power in some way to benefit itself at the expense of others in the market, then this must also be illegal. This goes to the idea of viewing the world as a type of HR department where you can always appeal unfairness to some authority that will punish appropriately. Many people go through life endlessly looking for an authority figure, or manager-in-the-sky to file complaints with and make things right. But that's not how it works, you have to actually violate some law on the books, and I'm not sure what laws against monopsony we have -- for example, Apple is ruthless in driving down prices (for itself) due to its market power, and if it forces vendors to agree to never charge Apple more than what they charge another customer, this would not be illegal, even though the end result might be vendors raising prices for everyone except Apple, and thus seeming "unfair" to everyone else forced to compete with Apple. Demanding the best possible deal is not unfair competition.
  - oceanplexian 5y ago
    It works whatever way public sentiment wants it to work. Most of us live in a democracy, laws aren’t black and white and can be changed on a whim with little more than a single election cycle, or interpreted by courts in any arbitrary fashion. Sure, a large company can push unfair practices to a point, and can throw lawyers at it to a point but I think some large companies fatally underestimate the danger of flouting their position; the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about. So it is absolutely in their self-interest to make sure their practices are “fair”.
    - rsj_hn 5y ago
      Well, we don't live in a democracy, we live in a republic with various roadblocks and safeguards that make it much harder to pass laws than taking public opinion polls. There is the dreaded senate, for example, that can block laws. So as is often the case, the legal system is quite conservative whereas people wildly claim that whatever they don't like at the moment -- whatever seems "unfair" should be illegal, and fortunately there are usually enough roadblocks to prevent that from happening. > the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about. Nope. Even if there are pissed off or crusading judges -- of which there are plenty -- those decisions will get appealed and overturned via the appeals process and it definately will not take one day, these cases can take a decade as they wind their way to the supreme court where they are finally turned into nothingburgers most of the time, to the constant fury of those who insist that their ever-changing moods should be encoded in law, or that a pissed off judge should be able to carve apart a company. There is a reason this has never happened in the history of the U.S. Sometimes monopolies are broken up, but you can usually count on one hand how many times that will happen in your lifetime -- I think ATT was the last time that happened, before most of the people on this site were born. And it hasn't happened since. The judicial system just doesn't have this power and laws are very slow to change, requiring much more than just a shift in public opinion.
setum 5y ago
> and then punishing them if they sell somewhere else that has lower fees for a lower price how would Amazon know if a particular seller is also selling elsewhere?
- teawrecks 5y ago
  Eyeballs.
- lallysingh 5y ago
  A web crawler
- jannes 5y ago
  I have read that they even go so far and crawl+scrape other shop websites. Of course that is hard to prove because they have plausible deniability.
  - DaiPlusPlus 5y ago
    The trick is to have “Amazon-exclusive” SKUs, or vice-versa: “NotAmazon-exclusive” SKUs that are ever-so-slightly different to justify a different price.
- myself248 5y ago
  There's a "report lower price" button that shoppers are incentivized to use...
skystarman 5y ago
Not defending Amazon's behavior but the standard for government intervention in antitrust cases has for decades been how the anticompetitive behavior affects consumers, NOT other businesses/sellers. And it's pretty clear that Amazon has led to much lower prices and a consumer surplus compared to alternatives in the market. And for all the shit AMZN gets on HN and over social media, broadly it is still one of the most widely respected and popular companies in the US across a broad spectrum of consumers. You can argue whether that's overall good or bad, but I'm talking about the law as it is and has been enforced vs. what people WISH the law said.
- stjohnswarts 5y ago
  Yeah I don't think current antitrust law really covers it. I think in the next decade we'll get new versions of what a monopoly, oliogopoly, and antitrust cover as umbrella descriptors. Amazon may get even worse since Bezos is leaving soon.
- ticviking 5y ago
  Except that the lawsuit literally says the opposite. That Amazon punishes people offering lower prices elsewhere.
- TheOtherHobbes 5y ago
  Your point might be true in small sub-markets - for example for AliBaba imports, especially those where tens of sellers all import exactly the same items at broadly similar prices. As a general point, it's not even close to being true.
SavantIdiot 5y ago
> It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers I'm glad this was stated. It is new insight for me. I got in the habit of only buying from the actual manufacturer store on Amazon, thinking it was benefiting the company. For example: buying Bose speakers on the Amazon Bose site, instead of the bose.com. Now I realize that Bose loses a lot of money going through amazon. I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow". The only thing I've run into is the vendor site saying out of stock, but the vendor -store- on Amazon in stock. E.g., I bought a PixHawk4 flight contgroller from HolyBro. The HolyBro site was out of stock, but Amazon's HolyBro store had it in stock. /bangs head on wall/ I understand why, it's just... weird.
- dpwm 5y ago
  I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others. Which raises an obvious asymmetry: Amazon makes no guarantee that it is not offering more favourable terms for bigger suppliers – and although mere speculation, I would be surprised if that didn’t go on, because I seem to remember traditional retailers doing similar things. I’m not saying this is good or bad, just pointing out that with all retail there has been almost a phase transition once the supplier is a household name, and the dynamics change almost to the point where retailers would offer their products at cost price or even a loss just to make sure that their customers could buy the household name through them.
  - dls2016 5y ago
    > I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others. I'm not sure what, but there's a story on lower end, too. A lot of crap on Amazon is from no-name brands like MAKNO and TURBLEX which don't even exist outside of Amazon. If I sell $19.99 TURBLEX kitchen knives on Amazon and the $11.87 MAKNO version through AliExpress, then I've not violated the policy.
- Rapzid 5y ago
  I would like more information on that number. It doesn't sound tenable as presented for physical goods.
dpwm 5y ago
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. IIRC they do something like it with books through Kindle Direct Publishing: you have to sell on Amazon at the lowest price available anywhere, or else they take a much bigger cut. It will probably be argued that Amazon isn’t actually a monopoly in these areas, therefore it’s not an abuse of monopoly. I’m only half joking.
- Symbiote 5y ago
  I've seen local restaurants and takeaways with (presumably) similar contracts with the food-ordering aggregators (Just Eat etc). Some have a clear statement on the website like "10% discount for ordering by phone", others will apply a similar discount when ordering in person, or will put a 10% off coupon (must order by phone / their own website) in with every delivery.
  - dpwm 5y ago
    I think I’ve seen it more directly with Amazon sellers including discount vouchers that only work on their own store.
testcase_delta 5y ago
I own a consumer goods business and sell via Amazon and traditional retailers. Amazon's 30% to 40% fee is much less than traditional retail, which starts at 50%. Amazon is where I get my best margins.
- dpwm 5y ago
  This is an interesting perspective. It fits with my understanding of traditional retail as pretty brutal for new entrants, taking more of a cut and putting up a much higher barrier to entry than Amazon. Ebay may have lower fees, but Amazon is where many people go for convenience.
- MomoXenosaga 5y ago
  Yeah people love bitching about Amazon but traditional retail was scum. How quickly everyone forgets why internet shopping got big...
- andersonvom 5y ago
  It's great that we can use this as reference for what it used to be. Presumably, this is what competition should bring in: "traditional retail sucked, so amazon comes in and takes over it by offering something better." The same thing would still apply now too: "if sellers are able to offer their goods elsewhere for cheaper, they should be able to", instead of being forced to raise prices everywhere.
- deleted 5y ago
  [deleted]
la6471 5y ago
For whatever reason HN seems to have a rather unhealthy obsession with Amazon that is evident in somewhat regular articles about Amazon’s dominance in the online retail space. Frankly it gets a little tiring after sometime , specially when walmart.com exists and these posts smells like some underhanded SEO type activities. Anyway hopefully HN moderators will take care of this before it becomes a tool in the hand of SEO agencies paid for by other companies.
- IncRnd 5y ago
  > Frankly it gets a little tiring after sometime , specially when walmart.com exists You didn't read the article, which demonstrates how Amazon's actions raise the prices at Wal-Mart.
- serf 5y ago
  the existence of a competitor is poor reasoning about whether or not monopolistic intention exists. When a single entity in the market can control and set the prices for the entire market it indicates an uneven shift in market power. Amazon has such market power at the moment, and this puts them at risk of committing monopolistic behaviors.
- forgithubs 5y ago
  You're totally right
hammock 5y ago
>It's the fact that Amazon is charging anywhere between 30-45% You ought to see what b&m retailers charger their suppliers !
- waitwhat333 5y ago
  Please explain, I thought B&M was just a discount store that purchased surplus inventory and knocked it out cheap? why would they be charging their suppliers
  - nhooyr 5y ago
    Brick and mortar.
  - mprev 5y ago
    Brick and mortar, not the UK retail chain.
    - simondotau 5y ago
      Hang on, there’s a B&M retail chain in the UK? I know of B&Q and H&M and M&S but not B&M. edit: never mind, yes, there’s also a B&M. UK store names, sigh.
namdnay 5y ago
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped The type of contract you are describing is common in many industries. They’re known as “full content agreements” in the airline industry for example, and they’re a continual source of tension between the distribution networks and travel agencies (who want these rules) and the airlines (who would like to be able to sell cheaper on their own direct channels). The same thing exists for hotels etc I guess the question boils down to whether Amazon can be considered to have a monopoly position in the indirect distribution of the specific type of goods being considered. I imagine that might be possible for books, not sure about other goods
- shellfishgene 5y ago
  Booking.com's "best price agreement", which prohibited hotels from offering lower prices on their own website, was just declared illegal by the highest German court because it's anti competitive.
  - lotsofpulp 5y ago
    All the hotel chains in the US have been offering cheaper prices conditional upon signing up for the rewards program for many years now, and it’s free and a simple check mark to become a rewards program member.
  - Dylan16807 5y ago
    Well that's good, but I sort of see it as solving the problem from the wrong end. As a consumer what I want to see is a booking site that does have the lowest price but can't charge the hotel more than a tiny fee.
- aidenn0 5y ago
  For online shopping for most goods under $100, and many over $100, they really do. I've seen a few balance sheets, and Amazon is usually over 80% of online sales.
- markus_zhang 5y ago
  Monopoly can also be achieved by colluding (even just implicitly without formal agreement) with other similar scale companies in the same trench. It's difficult to prove.
WalterBright 5y ago
> Amazon is charging anywhere between 30-45% in fees to the sellers Back in the 80s, I used to sell Datalight C and Zortech C++ through mail order distributors. I was shocked to discover they paid us about half, or even less, of what they sold it for. But they were all like that. It's what the manufacturer has to pay for distribution. Just try running a store, or a mail order house, without doubling what you pay for the merchandise. You'll go bust if you don't. If a customer called us direct to buy, it was priced at about the same as what the resellers sold it for. But, of course, then we had to pay the expenses of fulfillment staff, space, etc. Many people are outraged by this doubling of price from manufacturer to retailer, and start a business believing they can undercut the other retailers and cash in. They get a rude awakening with how much it costs to run a retailing operation. They confuse "margin" with "profit".
- bombcar 5y ago
  A similar margin/profit disconnect exists in those wanting to start a restaurant or bar. It’s cutthroat out there.
- gnopgnip 5y ago
  But Amazon isn't running a store, it is a marketplace
  - WalterBright 5y ago
    Just a modern version of the same mail order distributor.
pdonis 5y ago
> Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. WalMart does offer lower seller fees and (at least sometimes) lower prices than Amazon. The problem for me is that those lower prices are usually on things I don't want. I've bought a few times from WalMart's online store, but more often I look for what I want there, can't find it, go to Amazon, find it quickly, and buy it there. Many other comments in this thread indicate that my experience is not atypical. Breaking up a monopoly is not a good thing if it results in worse outcomes for us as customers. If we end up finding what we want less often, or having to pay more for it, how is that a win?
lowdose 5y ago
On the other hand AWS basically saved the world from economically collapsing by WFH made possible through the innovation of turn key massive distributed compute capabilities to anyone with a credit card. AWS offered GPU's in 2015, it took both Google and Microsoft 4 years to make a comparable offer.
- teawrecks 5y ago
  If this is a team effort and capitalism is benefiting us as a society as intended, then the majority of people should feel better off that we had amazon here to help us through a time of need, and amazon should feel appropriately rewarded for its technological foresight. If instead this is a war between corporations and society, then we would expect to see a huge number of people feel like amazon exploited them in a time of weakness, furthered an already bad state of wealth inequality and classism, and accrued an order of magnitude more power over everyone than they had before. Which outcome do you think is a better reflection of reality?
rubyfan 5y ago
Many of us are reading this comment and not understanding why we’re being condescended to. We read TFA and not seeing the problem and the fact that you restate the fees for Marketplace aren’t selling it any more than the article. Explain why the mere act of charging 30-45% rent is a monopoly?
- hedora 5y ago
  By preventing sellers from offering lower prices elsewhere, they’re using their monopoly power to directly stifle competition, and also to directly raise consumer prices. The size of the fee they charge on top of this doesn’t matter.
bennysomething 5y ago
I thought those fees are for FBA. I don't think that service exists else where. Charging more than your competitors is not monopolistic. In fact this sentiment doesn't make any sense: how can they have competitors if they are a monopoly. If amazon made its prices lower than its competitors I'm pretty certain they'd be accused of the same thing.
supernovae 5y ago
It's a messy market. If they weren't paying such high fees to Amazon, they would be paying those fees to Google (Pay per click) or other marketplaces that came and went over the years (those old school price shopping websites - pricegrabber and such) Walmart does offer a 3rd party seller market and its largely junk in comparison - however, I don't know their fees. 0% is an imaginary fee btw... It costs money to staff/warehouse/sell/distribute/ship/package - i'm willing to bet the 30-45% fee includes amazon warehouse sellers who use prime shipping... per the post below, a company like bose knows they only make 50% if even that much selling to any retailer, if they can make 55-65% selling direct on amazon and reach the market of people who just default to amazon then they're ahead of other sellers... Prime now for a speaker company is a godesend considering UPS shipping rates and last mile for heavy items are why they depended so much on brick and mortar retail traditionally. I don't think the system is perfect by anymeans, but Amazon is just playing in a market that was previoulsly dominated by others and a market where fixed 30-45% is much cheaper, than everyone doing payperclick and hopoing for coneversions (googles market)

tracer4201 5y ago

The crux of the article was that you lose winning the buy offer if you sell elsewhere cheaper. Okay - so who wins the buy box? Someone who is actually offering a cheaper price, one that’s more enticing for me as the shopper? How is that hurtful for the consumer? You’re calling that “punishment”, but in fact as a shopper I just want to see the lowest price with the fastest shipping. The seller fee bit part isn’t relevant. Wal Mart and Target or any other site could well offer lower seller fees - in fact, they’d HAVE to undercut Amazon in order to catch up with Amazon. But that doesn’t mean Amazon has to bring their prices down. I don’t buy that. One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service. There is quite a bit to this article that’s disingenuous, for example - > How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price. If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. But this isn’t quite true. Using hyperbole like “money laundering” also doesn’t help the case. > Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy. Again, hyperbole. The author merely brushes off the fact that these sellers don’t HAVE to sell on Amazon in the first place. Presumably, Amazon is growing because more and more sellers flock to their website. If it’s a bad deal for sellers, they can sell on other websites. The article makes a one line claim - representing it as a ground truth - that a new business HAS to sell on Amazon. So this is clearly stating that no business can survive if they only have their own store presence or sell on Amazons competitors. I don’t believe this is true (based on a very successful family business). Yes my data point is anecdotal, but if we’re saying no business can survive without the ability to sell on Amazon, then the entire article is moot - the simple reason for breaking up Amazon is that no small business can survive without Amazon. Again, I don’t think that’s true, and the author knows that - hence, the long wordy article to come at the issue from other angles while sprinkling in hyperbole.

avianlyric 5y ago
I don't understand how losing the buy box for offering your products cheaper elsewhere can be anything but punishment. You say yourself that picking the cheapest price plus shipping is what consumers want, so how a companies pricing elsewhere relevant to a consumer buying on Amazon? You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart. This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up. If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers. > If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store? > If it’s a bad deal for sellers, they can sell on other websites. Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL.
- tracer4201 5y ago
  >You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart. I'm on Amazon page right now. It tells me that I can get a product the fastest with the buy box offer, or I can get a cheaper price from other "offers". And when I click that link, it shows me higher and lower prices, but the lower prices have a delivery date (actually a range, between X and Y) more than a week out. Let me start just by saying that the offer is still shown. It's not immediately in the buy box, but as a shopper, I have access to the lower prices and can buy from a different seller. This information is not obfuscated from me or hidden through some dark pattern. >This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up. >If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers. The incentive goes away if you don't sell on Amazon, right? Any Amazon "strangle" (your word, not mine) only exists because people choose to sell on Amazon, right? >How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store? See my previous point. Don't sell on Amazon. >Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL. I don't agree with this. Companies like Comcast are deemed monopolies because their customers don't have a choice. Just as you stated, Comcast gives me high speed broadband. But my choice is limited to Comcast, and the only competitor (if there even is one in my neighborhood) will offer 2MB DSL. This is NOT the case with online shopping. I can purchase an iPad from Apple, Amazon, Best Buy, and a bunch of other websites. I can purchase my razor blades online from Target, Amazon, Gillette, etc. including several of the grocery stores in my city (who will ship them. Yes people shop at Amazon, but it's because they choose to. I have the option of not shopping with Amazon. As a matter of fact, I bought 10 "5 Star" brand notebooks on Amazon. I saw later that Wal-Mart had them for $3 instead of $7/notebook. I sent them back to Amazon and got them from Wal-Mart instead. With internet service, many people don't have a choice but to go with Comcast, Cox, or whichever single provider offers the service in their neighborhood.

felixfbecker 5y ago

+1 the point of their algorithm not putting sellers in the buy box that offer their product elsewhere cheaper is the problem they should absolutely be ruled to stop that practice by a court. Nobody can make an argument for how that is possibly GOOD for competition and the consumer.

murgindrag 5y ago
As a consumer, I've been !@#$%'ed a few times when I've bought from Amazon and didn't notice it was a 3rd party seller with their own shipping method. One time, I was !@#$% to the tune of a few hundred bucks. Amazon can do more QC if it goes through them.
- the_local_host 5y ago
  I don't know why you're getting downvoted, this is my experience as well. It's to the point where if it doesn't ship from Amazon, I don't buy it. The last thing I accidentally bought from a non-Amazon shipper arrived in a semi-destroyed box, inside a too-small bubble-wrap envelope, apparently shipped from someone's condominium (I guess they bought in bulk and repackaged?)
  - mattmcknight 5y ago
    Absolutely. I'd pay more if I could look at Amazon without any of the third party garbage.
  - stjohnswarts 5y ago
    Probably "buyer beware", if you're buying something that expensive then you should look around and not just assume Amazon has the lowest price.
    - CyberDildonics 5y ago
      It is not always that simple. Part of the arbitrage can be generic things from aliexpress bought in bulk and shipped from china over 8-10 weeks. The mark up on amazon is partly the fact that the long ship time has already been done.

forgithubs 5y ago

That's just far from being a monopoly. I subscribe to Amazon because I've always got an excellent service. I also buy on Ebay, Craglist, Walmart and diverse retailers that are entering the eCommerce game. The thing here is that markets take longer to work but if you look around, there is plenty of competition.

diffeomorphism 5y ago
> That's just far from being a monopoly. Correct, but besides the point. The relevant laws are not just about monopolies. >but if you look around, there is plenty of competition. Also correct, but again not really relevant.
- forgithubs 5y ago
  I guess it is relevant to the "Amazon is an evil and monopolistic organisation" theme. Maybe not relevant for the lawsuit specified in the report, they are certainly entitled to sue for any reason. But the classic theme still show its nose. On an other note, if amazon has 128 million prime subscribers and they like the service, it is something politicians need to be aware if they still want to be elected.
matsemann 5y ago
Many other comments here in addition to yours fail to grasp that one doesn't have to have a literal 100% monopoly to show monopolistic behavior that leaves the customers as a whole worse off. Like this article says, prices are increased across the board because of how Amazon acts.
- forgithubs 5y ago
  Don't paint amazon subscribers as victims here. I am entirely satisfied of the time saved and the cost of Amazon products I buy. The yelling comes from the Amazon sellers side, not from the customers. There is plenty of competition for me to shop around, and if there are none, I'd rather buy from Amazon as I trust that they reduce the costs , fees and taxes effectively. I would argue that the government should do less and not more. If they really want competition to grow, they could stop charging capital gains on every item a seller flip. For example, when I was selling on Ebay, after the platform fees, the shipping fees, and the government taxes, it's just not worth it to enter the sector as a small guy.

bryanrasmussen 5y ago

>That seems like legitimately monopolistic behavior It seems monopsonistic to me, I believe it should be illegal but not sure it actually is?

rsj_hn 5y ago
Correct. A lot of people assume that if something doesn't seem "fair", then it must be illegal. And they assume that if a company uses it's market power in some way to benefit itself at the expense of others in the market, then this must also be illegal. This goes to the idea of viewing the world as a type of HR department where you can always appeal unfairness to some authority that will punish appropriately. Many people go through life endlessly looking for an authority figure, or manager-in-the-sky to file complaints with and make things right. But that's not how it works, you have to actually violate some law on the books, and I'm not sure what laws against monopsony we have -- for example, Apple is ruthless in driving down prices (for itself) due to its market power, and if it forces vendors to agree to never charge Apple more than what they charge another customer, this would not be illegal, even though the end result might be vendors raising prices for everyone except Apple, and thus seeming "unfair" to everyone else forced to compete with Apple. Demanding the best possible deal is not unfair competition.
- oceanplexian 5y ago
  It works whatever way public sentiment wants it to work. Most of us live in a democracy, laws aren’t black and white and can be changed on a whim with little more than a single election cycle, or interpreted by courts in any arbitrary fashion. Sure, a large company can push unfair practices to a point, and can throw lawyers at it to a point but I think some large companies fatally underestimate the danger of flouting their position; the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about. So it is absolutely in their self-interest to make sure their practices are “fair”.
  - rsj_hn 5y ago
    Well, we don't live in a democracy, we live in a republic with various roadblocks and safeguards that make it much harder to pass laws than taking public opinion polls. There is the dreaded senate, for example, that can block laws. So as is often the case, the legal system is quite conservative whereas people wildly claim that whatever they don't like at the moment -- whatever seems "unfair" should be illegal, and fortunately there are usually enough roadblocks to prevent that from happening. > the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about. Nope. Even if there are pissed off or crusading judges -- of which there are plenty -- those decisions will get appealed and overturned via the appeals process and it definately will not take one day, these cases can take a decade as they wind their way to the supreme court where they are finally turned into nothingburgers most of the time, to the constant fury of those who insist that their ever-changing moods should be encoded in law, or that a pissed off judge should be able to carve apart a company. There is a reason this has never happened in the history of the U.S. Sometimes monopolies are broken up, but you can usually count on one hand how many times that will happen in your lifetime -- I think ATT was the last time that happened, before most of the people on this site were born. And it hasn't happened since. The judicial system just doesn't have this power and laws are very slow to change, requiring much more than just a shift in public opinion.

setum 5y ago

> and then punishing them if they sell somewhere else that has lower fees for a lower price how would Amazon know if a particular seller is also selling elsewhere?

teawrecks 5y ago
Eyeballs.
lallysingh 5y ago
A web crawler
jannes 5y ago
I have read that they even go so far and crawl+scrape other shop websites. Of course that is hard to prove because they have plausible deniability.
- DaiPlusPlus 5y ago
  The trick is to have “Amazon-exclusive” SKUs, or vice-versa: “NotAmazon-exclusive” SKUs that are ever-so-slightly different to justify a different price.
myself248 5y ago
There's a "report lower price" button that shoppers are incentivized to use...

skystarman 5y ago

Not defending Amazon's behavior but the standard for government intervention in antitrust cases has for decades been how the anticompetitive behavior affects consumers, NOT other businesses/sellers. And it's pretty clear that Amazon has led to much lower prices and a consumer surplus compared to alternatives in the market. And for all the shit AMZN gets on HN and over social media, broadly it is still one of the most widely respected and popular companies in the US across a broad spectrum of consumers. You can argue whether that's overall good or bad, but I'm talking about the law as it is and has been enforced vs. what people WISH the law said.

stjohnswarts 5y ago
Yeah I don't think current antitrust law really covers it. I think in the next decade we'll get new versions of what a monopoly, oliogopoly, and antitrust cover as umbrella descriptors. Amazon may get even worse since Bezos is leaving soon.
ticviking 5y ago
Except that the lawsuit literally says the opposite. That Amazon punishes people offering lower prices elsewhere.
TheOtherHobbes 5y ago
Your point might be true in small sub-markets - for example for AliBaba imports, especially those where tens of sellers all import exactly the same items at broadly similar prices. As a general point, it's not even close to being true.

SavantIdiot 5y ago

> It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers I'm glad this was stated. It is new insight for me. I got in the habit of only buying from the actual manufacturer store on Amazon, thinking it was benefiting the company. For example: buying Bose speakers on the Amazon Bose site, instead of the bose.com. Now I realize that Bose loses a lot of money going through amazon. I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow". The only thing I've run into is the vendor site saying out of stock, but the vendor -store- on Amazon in stock. E.g., I bought a PixHawk4 flight contgroller from HolyBro. The HolyBro site was out of stock, but Amazon's HolyBro store had it in stock. /bangs head on wall/ I understand why, it's just... weird.

dpwm 5y ago
I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others. Which raises an obvious asymmetry: Amazon makes no guarantee that it is not offering more favourable terms for bigger suppliers – and although mere speculation, I would be surprised if that didn’t go on, because I seem to remember traditional retailers doing similar things. I’m not saying this is good or bad, just pointing out that with all retail there has been almost a phase transition once the supplier is a household name, and the dynamics change almost to the point where retailers would offer their products at cost price or even a loss just to make sure that their customers could buy the household name through them.
- dls2016 5y ago
  > I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others. I'm not sure what, but there's a story on lower end, too. A lot of crap on Amazon is from no-name brands like MAKNO and TURBLEX which don't even exist outside of Amazon. If I sell $19.99 TURBLEX kitchen knives on Amazon and the $11.87 MAKNO version through AliExpress, then I've not violated the policy.
Rapzid 5y ago
I would like more information on that number. It doesn't sound tenable as presented for physical goods.

dpwm 5y ago

> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. IIRC they do something like it with books through Kindle Direct Publishing: you have to sell on Amazon at the lowest price available anywhere, or else they take a much bigger cut. It will probably be argued that Amazon isn’t actually a monopoly in these areas, therefore it’s not an abuse of monopoly. I’m only half joking.

Symbiote 5y ago
I've seen local restaurants and takeaways with (presumably) similar contracts with the food-ordering aggregators (Just Eat etc). Some have a clear statement on the website like "10% discount for ordering by phone", others will apply a similar discount when ordering in person, or will put a 10% off coupon (must order by phone / their own website) in with every delivery.
- dpwm 5y ago
  I think I’ve seen it more directly with Amazon sellers including discount vouchers that only work on their own store.

testcase_delta 5y ago

I own a consumer goods business and sell via Amazon and traditional retailers. Amazon's 30% to 40% fee is much less than traditional retail, which starts at 50%. Amazon is where I get my best margins.

dpwm 5y ago
This is an interesting perspective. It fits with my understanding of traditional retail as pretty brutal for new entrants, taking more of a cut and putting up a much higher barrier to entry than Amazon. Ebay may have lower fees, but Amazon is where many people go for convenience.
MomoXenosaga 5y ago
Yeah people love bitching about Amazon but traditional retail was scum. How quickly everyone forgets why internet shopping got big...
andersonvom 5y ago
It's great that we can use this as reference for what it used to be. Presumably, this is what competition should bring in: "traditional retail sucked, so amazon comes in and takes over it by offering something better." The same thing would still apply now too: "if sellers are able to offer their goods elsewhere for cheaper, they should be able to", instead of being forced to raise prices everywhere.
deleted 5y ago
[deleted]

la6471 5y ago

For whatever reason HN seems to have a rather unhealthy obsession with Amazon that is evident in somewhat regular articles about Amazon’s dominance in the online retail space. Frankly it gets a little tiring after sometime , specially when walmart.com exists and these posts smells like some underhanded SEO type activities. Anyway hopefully HN moderators will take care of this before it becomes a tool in the hand of SEO agencies paid for by other companies.

IncRnd 5y ago
> Frankly it gets a little tiring after sometime , specially when walmart.com exists You didn't read the article, which demonstrates how Amazon's actions raise the prices at Wal-Mart.
serf 5y ago
the existence of a competitor is poor reasoning about whether or not monopolistic intention exists. When a single entity in the market can control and set the prices for the entire market it indicates an uneven shift in market power. Amazon has such market power at the moment, and this puts them at risk of committing monopolistic behaviors.
forgithubs 5y ago
You're totally right

hammock 5y ago

>It's the fact that Amazon is charging anywhere between 30-45% You ought to see what b&m retailers charger their suppliers !

waitwhat333 5y ago
Please explain, I thought B&M was just a discount store that purchased surplus inventory and knocked it out cheap? why would they be charging their suppliers
- nhooyr 5y ago
  Brick and mortar.
- mprev 5y ago
  Brick and mortar, not the UK retail chain.
  - simondotau 5y ago
    Hang on, there’s a B&M retail chain in the UK? I know of B&Q and H&M and M&S but not B&M. edit: never mind, yes, there’s also a B&M. UK store names, sigh.

namdnay 5y ago

> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped The type of contract you are describing is common in many industries. They’re known as “full content agreements” in the airline industry for example, and they’re a continual source of tension between the distribution networks and travel agencies (who want these rules) and the airlines (who would like to be able to sell cheaper on their own direct channels). The same thing exists for hotels etc I guess the question boils down to whether Amazon can be considered to have a monopoly position in the indirect distribution of the specific type of goods being considered. I imagine that might be possible for books, not sure about other goods

shellfishgene 5y ago
Booking.com's "best price agreement", which prohibited hotels from offering lower prices on their own website, was just declared illegal by the highest German court because it's anti competitive.
- lotsofpulp 5y ago
  All the hotel chains in the US have been offering cheaper prices conditional upon signing up for the rewards program for many years now, and it’s free and a simple check mark to become a rewards program member.
- Dylan16807 5y ago
  Well that's good, but I sort of see it as solving the problem from the wrong end. As a consumer what I want to see is a booking site that does have the lowest price but can't charge the hotel more than a tiny fee.
aidenn0 5y ago
For online shopping for most goods under $100, and many over $100, they really do. I've seen a few balance sheets, and Amazon is usually over 80% of online sales.
markus_zhang 5y ago
Monopoly can also be achieved by colluding (even just implicitly without formal agreement) with other similar scale companies in the same trench. It's difficult to prove.

WalterBright 5y ago

> Amazon is charging anywhere between 30-45% in fees to the sellers Back in the 80s, I used to sell Datalight C and Zortech C++ through mail order distributors. I was shocked to discover they paid us about half, or even less, of what they sold it for. But they were all like that. It's what the manufacturer has to pay for distribution. Just try running a store, or a mail order house, without doubling what you pay for the merchandise. You'll go bust if you don't. If a customer called us direct to buy, it was priced at about the same as what the resellers sold it for. But, of course, then we had to pay the expenses of fulfillment staff, space, etc. Many people are outraged by this doubling of price from manufacturer to retailer, and start a business believing they can undercut the other retailers and cash in. They get a rude awakening with how much it costs to run a retailing operation. They confuse "margin" with "profit".

bombcar 5y ago
A similar margin/profit disconnect exists in those wanting to start a restaurant or bar. It’s cutthroat out there.
gnopgnip 5y ago
But Amazon isn't running a store, it is a marketplace
- WalterBright 5y ago
  Just a modern version of the same mail order distributor.

pdonis 5y ago

> Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. WalMart does offer lower seller fees and (at least sometimes) lower prices than Amazon. The problem for me is that those lower prices are usually on things I don't want. I've bought a few times from WalMart's online store, but more often I look for what I want there, can't find it, go to Amazon, find it quickly, and buy it there. Many other comments in this thread indicate that my experience is not atypical. Breaking up a monopoly is not a good thing if it results in worse outcomes for us as customers. If we end up finding what we want less often, or having to pay more for it, how is that a win?

lowdose 5y ago

On the other hand AWS basically saved the world from economically collapsing by WFH made possible through the innovation of turn key massive distributed compute capabilities to anyone with a credit card. AWS offered GPU's in 2015, it took both Google and Microsoft 4 years to make a comparable offer.

teawrecks 5y ago
If this is a team effort and capitalism is benefiting us as a society as intended, then the majority of people should feel better off that we had amazon here to help us through a time of need, and amazon should feel appropriately rewarded for its technological foresight. If instead this is a war between corporations and society, then we would expect to see a huge number of people feel like amazon exploited them in a time of weakness, furthered an already bad state of wealth inequality and classism, and accrued an order of magnitude more power over everyone than they had before. Which outcome do you think is a better reflection of reality?

rubyfan 5y ago

Many of us are reading this comment and not understanding why we’re being condescended to. We read TFA and not seeing the problem and the fact that you restate the fees for Marketplace aren’t selling it any more than the article. Explain why the mere act of charging 30-45% rent is a monopoly?

hedora 5y ago
By preventing sellers from offering lower prices elsewhere, they’re using their monopoly power to directly stifle competition, and also to directly raise consumer prices. The size of the fee they charge on top of this doesn’t matter.

bennysomething 5y ago

I thought those fees are for FBA. I don't think that service exists else where. Charging more than your competitors is not monopolistic. In fact this sentiment doesn't make any sense: how can they have competitors if they are a monopoly. If amazon made its prices lower than its competitors I'm pretty certain they'd be accused of the same thing.

supernovae 5y ago

It's a messy market. If they weren't paying such high fees to Amazon, they would be paying those fees to Google (Pay per click) or other marketplaces that came and went over the years (those old school price shopping websites - pricegrabber and such) Walmart does offer a 3rd party seller market and its largely junk in comparison - however, I don't know their fees. 0% is an imaginary fee btw... It costs money to staff/warehouse/sell/distribute/ship/package - i'm willing to bet the 30-45% fee includes amazon warehouse sellers who use prime shipping... per the post below, a company like bose knows they only make 50% if even that much selling to any retailer, if they can make 55-65% selling direct on amazon and reach the market of people who just default to amazon then they're ahead of other sellers... Prime now for a speaker company is a godesend considering UPS shipping rates and last mile for heavy items are why they depended so much on brick and mortar retail traditionally. I don't think the system is perfect by anymeans, but Amazon is just playing in a market that was previoulsly dominated by others and a market where fixed 30-45% is much cheaper, than everyone doing payperclick and hopoing for coneversions (googles market)