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In Germany Amazon pressured third-party sellers to use their fulfillment/warehousing service, which would reveal to them where those sellers source their goods

• onion2k 5y ago
  Really clever strategy IMHO Really clever short term strategy. Once word gets out only sellers who don't care will list their products, and your product listings will be page after page of cheap, knock-off crap only an idiot would buy. looks at Amazon listings Yep.
  • toxik 5y ago
    Yes, Amazon is rotting from the inside by their own foul tactics. But by then, everybody involved will be heroes of their field and Bezos will literally be flying away on a rocket.
    • hayd 5y ago
      Bezos can't fly away since all of his rockets fall right back, he's never made it to orbit.
• Hokusai 5y ago
  But as an Amazon employee you need to sign a non compete agreement. https://www.cnbc.com/2020/06/11/aws-case-against-worker-who-joined-google-reignites-non-compete-debate.html https://www.cnbc.com/2020/06/11/aws-case-against-worker-who-... Or we do stop Amazon, and others, or the future will be the corporate hell that 80s movies predicted.
  • gowld 5y ago
    Amazon makes vendors sign non-competes too! But Amazon won't sign one. This was recently rolled back for some vendors. https://www.kaspien.com/blog/amazon-fair-pricing-policy-which-marketplaces-does-amazon-price-match/ https://www.kaspien.com/blog/amazon-fair-pricing-policy-whic...
• kongolongo 5y ago
  Does this not fall under "unreasonably constraining competition" section of anti-trust laws? I'm only familiar with the US anti-trust debates (and even then, not too familiar) is there a German equivalent that should be preventing this?
  • csunbird 5y ago
    Also, isn't there a law strictly forbids this in Germany? As a middle-man, you are not allowed to use their data to compete with them? Because the place I work has a marketplace with third party sellers as well and we have internal rules explicitly disallows this, cited by our compliance team because of the regulations.
    • hef19898 5y ago
      Then it is good for Amazon that the European retail operations are run in Luxembourg under Amazon SARL I guess.
    • flud 5y ago
      În Germany it might stand, but you are forgetting the American legal system is very much moneybased, so Amazon can just fight it in court an win, or at worst settle, which I have no doubt it's overall still a win
• gruez 5y ago
  >They take on the entrepreneurial risk and if they're successful Amazon will know exactly how many goods they sell to which customers and from who they get those goods. What "entrepreneurial risk" are they taking there? Sending the initial batch of products over and creating a product listing? Are they involved with the design/creation of the product itself? If they're just taking already designed/made products and reselling on amazon, and amazon's cutting them out, I can't say I feel sorry for them losing their middle-man position.
  • sumedh 5y ago
    > What "entrepreneurial risk" are they taking there? Maybe identifying which product is good for the market, who is the best supplier, using social media to market the product and create a demand?
    • hef19898 5y ago
      Not to forget the financial risk of inventory.
    • staunch 5y ago
      They're taking on financial risk but I wouldn't call it entrepreneurial risk. They can list any number of products at time, risking nothing but money. There's nothing innovative or novel being added to the world. The closest thing to entrepreneurial risk is the "creating demand" claim but that seems unlikely to be very true in most cases. In most cases, they're likely capturing demand on Amazon itself by being among the first to list a product. It seems pretty clear that they're arbitraging and Amazon is taking advantage of its position to out-arbitrage them. In many cases, it seems reasonable to assume Amazon would've tried selling the product themselves regardless. These arbitragers probably just have to accept that the reward for finding new products to arbitrage is very time-limited, because if Amazon doesn't start competing with them, someone else will. This is a great example of a ruthlessness, but highly functional, capitalist market. It seems to work out great for consumers, all things considered.
      • short12 5y ago
• 2OEH8eoCRo0 5y ago
  > Really clever strategy Reminds me of my clever card playing strategy where I peek at everybody's cards.
  • Spivak 5y ago
    That’s not like this at all. You have businesses who are making a profit off of an information asymmetry and reselling goods for higher prices. Totally normal, not begrudging it. But it’s always a risk that someone will figure out your suppliers and cut you out of the deal. Have you never looked around to figure out where some dropshipper gets their stuff and bought direct?
    • CogitoCogito 5y ago
      > Totally normal, not begrudging it. But it’s always a risk that someone will figure out your suppliers and cut you out of the deal. The risk is quite a bit larger if a large player like Amazon pressures you to tell them who your suppliers are. > Have you never looked around to figure out where some dropshipper gets their stuff and bought direct? Amazon exploiting their market position is not the same thing.
  • wodenokoto 5y ago
    No, your strategy would be clever, like Amazon is clever, if you convinced the other players to show you their cards.
    • felipelemos 5y ago
      It's more like "if you convinced the other players to sit in front a mirror"
• dandanua 5y ago
  Cleverness has a strange meaning nowadays
  • amelius 5y ago
    It's quite simple. More money = more clever.
• croes 5y ago
  Italy has similar organisations with clever strategies. They make you offers you can't refuse.
  • dylan604 5y ago
    Those organisations have gotten so big, they've branched out and are now multi-national. They have been quite successful. I hear their biggest competitor is called RICO.
• 8ytecoder 5y ago
  Let me this get out first - It's scummy. However, by no means is this different from the store branded products you find at Safeway or Walgreens. They do the exact same thing. The vendors pay for shelf space, share their profits, only for the supermarkets to copy the product and sell it as store branded ones. Like a lot of things a fresh perspective helps. People are talking about it now but it was a minor shock when I saw this the first time I visited the US (2012is). I was curious on how the brands were okay with it. I assume they rely on their brand sway. Apparently it's been a thing that goes back a very very long time.
  • marcosdumay 5y ago
    Many brands do not want to sell branded products at a discount, so they see the store brand as a positive. Some stores manage to get their brands recognized as high-quality, but not nearly as many as you probably think. The usual consumer recognition is that they are knock-offs. So the more known brands don't see them as direct competition.
  • geoffmcc 5y ago
    a lot of times it’s the same company selling the high end brand and the low end copy.
  • bryanrasmussen 5y ago
    store branded products have a reputation as crappy ripoffs, can you tell these amazon products are from amazon? Haven't used amazon in years so wouldn't know.
    • 8ytecoder 5y ago
      AmazonBasics is the predominant brand they use. But they definitely have some sneaky ones as well https://www.amazon.com/b?node=17728530011 https://www.amazon.com/b?node=17728530011
  • lenwood 5y ago
    > by no means is this different from the store branded products you find at Safeway or Walgreens It is different because Amazon controls exposure to products. In the store if I want ketchup, Heinz and the store brand are right next to each other and easily distinguishable. Amazon can bury the original product on page 2 of the search results. Also, its not always obvious in Amazon's search results that there is a viable option other than the Amazon branded product.
• RNCTX 5y ago
  This is exactly the same thing Walmart used to do. They would buy supply of a product from a startup supplier, who had done all the work of sourcing and designing the production of their product, and then demand ever-declining prices of said supply until the startup supplier had no choice but to abandon ship due to lack of profitability. At which point Walmart would simply re-create the supply chain themselves. The solution is to never deal with a corporation like Amazon or Walmart, Bezos didn't get to be a pretend-astronaut wannabe by paying his bills.
  • dylan604 5y ago
    Remember when Walmart got caught doing this, and then they tried to counter with the Made In USA ad campaign? They don't even bother any more though.
  • trebor 5y ago
    The difference between Walmart and Amazon, is that Amazon can study products it had no analog for. It could decide that it wants to enter a market, study sales patterns, force a supply chain change that let them spy on it, and launch their own products from that data. The depth of data they have is much deeper. Walmart hasn't had 3rd party sellers for as long as Amazon, and that sort of historical sales data is priceless to retailers. They don't willingly share that.
  • anitil 5y ago
    I've heard similar stories where small suppliers are crushed by large customers. But how do you get around this? Is there a way of engaging with these big companies as a small player? Or is it just a fool's errand?
    • RNCTX 5y ago
      > Or is it just a fool's errand? I'd say yes. Consider the possible outcomes: 1. your product doesn't sell very well, but doesn't fail entirely. you bought yourself a job, basically, you work longer hours for the same or a little less money than you made when you were employed. 2. your product doesn't sell well enough to stay on the shelves, you've probably sunk some of your own money into a failed venture and if you have debt you're probably looking at bankruptcy. 3. your product sells well, Amazon or Walmart steal it from you. I'd say the only way to win this game is not play. Build a product for a nice market outside of their clientele's price target that sells at a premium Amazon and Walmart shoppers are unwilling to pay.
• sgregnt 5y ago
  Though, it sound like the bottom line us good: completion helps consumers, as the efficiency goes up (no unefficient small middle man) and eventually the price goes down?
  • Ekaros 5y ago
    Medium term, in long term we end up getting lot less new novel products as cost of developing those won't be recouped.
    • triactual 5y ago
      This is not true. These products are not “developed” by the middle-man seller. They are simply identified and repackaged from their existing factories in low cost regions. If anything, this would force “entrepreneurs” to actually develop a product which is difficult and risky rather than just further rent-seeking on a global scale.
      • Woden501 5y ago
        Completely and patently false. Amazon is literally copying and reselling completely unique designs/products after determining through their marketplace data that it would be worth their time to do so. They're using their own data to undermine the companies that they should be dealing with in good faith. It doesn't sound bad when you're just talking about one product or company but we're not just talking about one. Amazon has done this to thousands of products as part of a plan to use third party sellers as guinea pigs to see what products will sell enough to rip off. This is systemic anti-competitive behavior that is at the very least unethical if not outright criminal. https://www.theverge.com/2021/3/3/22311574/peak-design-video-amazon-copy-everyday-sling-bag https://www.theverge.com/2021/3/3/22311574/peak-design-video...
        • triactual 5y ago
          Thank you for making my point. That bag doesn’t compete with the Peak design bag in any way other than general shape. It’s poorer in design and quality at every step and the user reviews show this clearly when comparing both products. It’s safe to say that Peak is in no danger from poor quality knockoffs because they actually have a value proposition that customers recognize. Lastly, if you need non-public “analytics” to know that Peak bags are popular…
• waynesonfire 5y ago
  don't grocery stores do this too?
• albertopv 5y ago
  Isn't it abuse of dominant position?