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What I don’t get it’s why they care now when this is an old retail strategy. Older than Amazon itself. Target is the epitome of pushing you white label brands d

What I don’t get it’s why they care now when this is an old retail strategy. Older than Amazon itself. Target is the epitome of pushing you white label brands down your throat from the minute you step into own of their stores. And this is essentially what every retailer does. They all check what sells the most, then they create their own brands, and then they promote and prioritize those brands over their shelved vendors. Show me one retailer that doesn’t do this. This strategy is the very reason why the direct to consumer model exists. Brands realized that they couldn’t compete fairly through product aggregators and their real survival and path to success was to do what retailers were already doing: to verticalize.

philistine 5y ago
The problem is not the practice itself; it's that Amazon representatives told Congress they did not do it. They lied, that's the problem. If they had said yes, we do indeed analyze what is happening in our marketplace to decide which products to launch, they wouldn't have gotten this letter.
- dehrmann 5y ago
  Are the quibbling over where Amazon looks at individual seller data or aggregated per-SKU data?
  - JumpCrisscross 5y ago
    > Are the quibbling over where Amazon looks at individual seller data or aggregated per-SKU data? No. They're "quibbling" over whether Amazon executives perjured themselves. Perjury doesn't have a "but, like, is it really a big deal" test.
    - RHSeeger 5y ago
      Given that nearly every important member of the government that has testified before congress has flat out lied to congress... this seems like selective enforcement. How about going after all the members of the military and intelligence command structures that told blatant lies when testifying.
      - JumpCrisscross 5y ago
        > nearly every important member of the government that has testified before congress has flat out lied to congress This is rubbish. There is a litany of recent, memorable cases. But they rarely met the legal threshold of contempt of Congress, and in the cases that did, there was seldom political will to prioritise its prosecution. Congress, by design, is a political creature. We don't want the President (DoJ) rounding up people who speak to a co-equal branch of government because he--unilaterally--thinks they might have lied.
    - dehrmann 5y ago
      From the article, > Bezos said the company prohibits its employees from using data on individual sellers to benefit its own private-label product lines. I could see someone hearing that and not realizing that per-SKU aggregation, or even clustered similar products, wouldn't break this rule.
- warmfuzzykitten 5y ago
  There are other possibilities than "they lied". The most likely explanation is that the branch in India used tactics that were specifically forbidden by corporate policy formulated in the United States, that corporate management was unaware that it took place, and is now plenty embarrassed to hear that it did. It's not necessarily true, by the way, that they wouldn't have gotten flack from Congress if they'd initially testified that they use sales and product data only they possess to find out which third-party products are both profitable and vulnerable to lower-cost competition, use it again to design competing house brands that are identical to the third party products down to the smallest detail, and follow that up by using their website to promote the knockoff products as preferable to the third party products they've ripped off. This is not a standard industry practice and would likely not be defensible as "It's just a house brand, like Safeway Soup. What's the big deal?"
rapind 5y ago
Probably not a bad idea to draw more attention to it regardless. Whether it's Walmart, Amazon, Costco, etc. If anyone can do it then they all MUST do it to compete. If we bring the hammer down on Amazon then we'll have to (ideally) bring the hammer down uniformly on everyone else. Basically it's sketchy behaviour across the board and Amazon has just proven themselves to be better, more efficient, and more willing at it. It's an argument worth having IMO. One side will cite consumer benefit and the other will point out that it has long term effects that reduce choice and innovation (and thus consumer benefit). Amazon would do just fine with a level playing field.
- emodendroket 5y ago
  Gotta be honest, I don't see it as much of a win if I can't buy store-brand cereal anymore.
  - xyzzyz 5y ago
    You don’t understand. Government needs you to stop buying store brand cereals, because they unfairly compete against General Mills Cheerios. See, stores can sell store brands cheaper than Cheerios, and that’s an anti-competitive practice, which the anti monopoly law is meant to protect from. Government will protect you by ensuring that there is no cheaper competing product, so that you will end up buying Cheerios at higher price. This will reduce the monopoly, and make the cereal market more competitive. Does that make sense to you? (It shouldn’t, because it doesn’t.)
    - 8note 5y ago
      It's just missing steps on breaking up General Mills, and grants for starting new cereal businesses
      - emodendroket 5y ago
        Seems like a tremendous use of energy and resources for little to no benefit.
throwawaycities 5y ago
Can you really not distinguish Amazon, it’s market position, and their acts from brick and mortar retailers that carry private label items? Even if you can’t distinguish Amazon’s conduct and a grocery store selling private label cereals side by side, the article really isn’t about that anyway but the fact that Amazon went before congress and was asked about prioritizing their private label products in search results over other sellers and Amazon representative lied under oath by denying they do that. I’m not aware of Target going before Congress and lying under oath about selling private label products, one would think if Amazon’s conduct was on the up and up they wouldn’t lie under oath to cover it up.
- devin 5y ago
  Let’s try it and see.
- fiddlerwoaroof 5y ago
  Isn’t it still the case that Walmart and similar brick and mortar stores have significantly higher revenue than Amazon’s e-commerce revenue? If anything, it’s worse for traditional stores because they have limited shelf space and so store brands can prevent name brands from even being available.
  - tw04 5y ago
    No, no it isn’t the case. Walmart is the only one with more revenue, but they don’t have AWS margins to prop up everything else. I think we’d all be better off if we didn’t have a 2-horse race for 90% of our purchases… Target (#3)had $93b in revenue in FY2020. Amazon e-commerce had $120b. https://corporate.target.com/annual-reports/2020 https://corporate.target.com/annual-reports/2020 https://www.statista.com/forecasts/1218313/amazon-revenue-development-ecommercedb https://www.statista.com/forecasts/1218313/amazon-revenue-de...
    - didibus 5y ago
      I'd agree if we had a 2-horse race, but I don't see it, there are a ton of competing retail stores both online and offline. And especially online, it's not like you're limited geographically where say your only store that has what you want is a big Walmart, you have access to hundreds of online retailer to choose from.
kennywinker 5y ago
On top of the lying, which another commenter pointed out is the major issue - Target doesn't pretend to be a marketplace. It's a curated store, some of the products are whitelabel, some are not. Amazon presents itself as a marketplace, where buyers and sellers can come together. Imagine I owned a shopping mall, and every time a business renting from me was successful I would hike up their rent and open a copycat shop in the stall next door... I think that's a closer analogy than the Target one.
- tarr11 5y ago
  Most corporate mall landlords have a requirement that you submit your monthly sales numbers and take a percentage of sales in addition to your rent.
  - asdff 5y ago
    Most retail stores also price shelf space according to sales too. Amazon on the other hand doesn't have any mechanism for you the brand to get preferential shelf space. In a mall you probably want a store by the entrance where everyone walks by, in a target you want shelf space at eye level, so there might be a premium for these spaces if you would like them. Can't do anything like that on Amazon. Third party scam products and name brands are weighed equally in search results. Amazon products actually get better placement, something you'd never see in a Target with their store brands since third party brands want to buy access to better placement and target wants to lease space at a premium to these brands.
- didibus 5y ago
  > Target Plus Marketplace is one of the top-tier eCommerce marketplaces, along with Amazon Marketplace and Walmart Marketplace, that cater to third party retailers. Target, one of the biggest retail chains in the United States, entered the eCommerce marketing realm in February 2019 and expanded its product assortment by allowing third party retailers to sell on Target.com
  - tablespoon 5y ago
tablespoon 5y ago
> What I don’t get it’s why they care now when this is an old retail strategy. Older than Amazon itself. > Target is the epitome of pushing you white label brands down your throat from the minute you step into own of their stores. And this is essentially what every retailer does. But Amazon isn't a simple retailer. Isn't the issue that they do this and operate a third party marketplace? IIRC, Target is a traditional retailer that doesn't operate a marketplace for other retailers to compete in.
- emodendroket 5y ago
  How different is Target's relationship to its suppliers from third-party Amazon sellers really? In many cases it's the same entity that wants to appear prominently in both venues.
  - asdff 5y ago
    Target is in the business of leasing shelf space. If you are a third party and want prominent placement in the store, target will lease that shelf to you. If you notice where target's third party stuff is placed, its actually rarely at eye level. That premium placement is reserved for other brands to lease at top dollar. Target probably makes more money selling less of their store brand and leasing primo space than they do if they were to use that primo space to sell more of their store brand and lease the bottom shelves. Amazon on the other hand doesn't work like a retail store. You aren't leasing a finite amount of space within the Amazon website. You are beholden to the search algorithm run by amazon which is a black box compared to an agreement made for shelf space in a retail store, you don't pay less for worse placement and you can't pay more for better placement, and Amazon continually tries to poach your business with low cost knockoffs and their search engines are uncannily tailored to prefer these results.
    - emodendroket 5y ago
      Isn't paying for sponsored results more or less equivalent to paying for better shelf space? The space may not "really" be limited, but for practical purposes, the second page of search results barely exists.
asdff 5y ago
It's a different situation in retail than what goes on with the amazon website. It's not a marketplace in the sense amazon is, brands are leasing specific shelf space. They pay an agreed upon price for these shelves and that's what they receive. Amazon doesn't abide to anything like this. To use a target example, it would be like they just threw all the third party stuff to the back of the store and only left the target brand stuff at eye level in the aisles, when that's not the case since the third party stuff has the best placement in the store. Brands typically pay extra for prominent shelf space position right at eye level and receive it, they aren't getting worked here by target like brands are by amazon when their results are pushed below the fold in favor of amazon basics products.
diffeomorphism 5y ago
Scale. Pointing at any one retailer and saying "that is scummy, stop it" does not work, feels arbitrary and "then go elsewhere" is actually an option. If Amazon or a number of large chains do it, there is no reasonable alternative. Case in point from Germany. If small supermarket chains treat their suppliers badly, that is their business. If Aldi (very large chain) does, this is potentialky ruinous for many companies, so politics do get involved. It always is a tradeoff between the possible harm, number of people affected and the desire to not intervene if at all possible.
sidm83 5y ago
In India, this is being dealt with in a different way. Amazon India and Flipkart (controlled by Walmart) are treated as a "marketplace", ie providing a platform for other sellers. There are strict rules to limit domination of a few sellers on the platform (limits on percentage of sales by each seller). Neither of the two companies are particularly happy about it so probably it works to some extent. https://www.livemint.com/industry/retail/ecommerce-companies-to-write-to-govt-against-draft-rules-11624910348605.html https://www.livemint.com/industry/retail/ecommerce-companies...
timoth3y 5y ago
> how me one retailer that doesn’t do this. The thing is, Amazon claims they are not a retailer, but rather a neutral marketplace matching buyer and seller. Tat's why they claim they should not be held responsible for false advertising, violations of consumer protection laws, or defective products. However, when they misuse that marketplace data, they turn around and claim that they are just one retailer among many. It's getting harder and harder for Amazon to maintain this legal equivocation.

philistine 5y ago

The problem is not the practice itself; it's that Amazon representatives told Congress they did not do it. They lied, that's the problem. If they had said yes, we do indeed analyze what is happening in our marketplace to decide which products to launch, they wouldn't have gotten this letter.

dehrmann 5y ago
Are the quibbling over where Amazon looks at individual seller data or aggregated per-SKU data?
- JumpCrisscross 5y ago
  > Are the quibbling over where Amazon looks at individual seller data or aggregated per-SKU data? No. They're "quibbling" over whether Amazon executives perjured themselves. Perjury doesn't have a "but, like, is it really a big deal" test.
  - RHSeeger 5y ago
    Given that nearly every important member of the government that has testified before congress has flat out lied to congress... this seems like selective enforcement. How about going after all the members of the military and intelligence command structures that told blatant lies when testifying.
    - JumpCrisscross 5y ago
      > nearly every important member of the government that has testified before congress has flat out lied to congress This is rubbish. There is a litany of recent, memorable cases. But they rarely met the legal threshold of contempt of Congress, and in the cases that did, there was seldom political will to prioritise its prosecution. Congress, by design, is a political creature. We don't want the President (DoJ) rounding up people who speak to a co-equal branch of government because he--unilaterally--thinks they might have lied.
  - dehrmann 5y ago
    From the article, > Bezos said the company prohibits its employees from using data on individual sellers to benefit its own private-label product lines. I could see someone hearing that and not realizing that per-SKU aggregation, or even clustered similar products, wouldn't break this rule.
warmfuzzykitten 5y ago
There are other possibilities than "they lied". The most likely explanation is that the branch in India used tactics that were specifically forbidden by corporate policy formulated in the United States, that corporate management was unaware that it took place, and is now plenty embarrassed to hear that it did. It's not necessarily true, by the way, that they wouldn't have gotten flack from Congress if they'd initially testified that they use sales and product data only they possess to find out which third-party products are both profitable and vulnerable to lower-cost competition, use it again to design competing house brands that are identical to the third party products down to the smallest detail, and follow that up by using their website to promote the knockoff products as preferable to the third party products they've ripped off. This is not a standard industry practice and would likely not be defensible as "It's just a house brand, like Safeway Soup. What's the big deal?"

rapind 5y ago

Probably not a bad idea to draw more attention to it regardless. Whether it's Walmart, Amazon, Costco, etc. If anyone can do it then they all MUST do it to compete. If we bring the hammer down on Amazon then we'll have to (ideally) bring the hammer down uniformly on everyone else. Basically it's sketchy behaviour across the board and Amazon has just proven themselves to be better, more efficient, and more willing at it. It's an argument worth having IMO. One side will cite consumer benefit and the other will point out that it has long term effects that reduce choice and innovation (and thus consumer benefit). Amazon would do just fine with a level playing field.

emodendroket 5y ago
Gotta be honest, I don't see it as much of a win if I can't buy store-brand cereal anymore.
- xyzzyz 5y ago
  You don’t understand. Government needs you to stop buying store brand cereals, because they unfairly compete against General Mills Cheerios. See, stores can sell store brands cheaper than Cheerios, and that’s an anti-competitive practice, which the anti monopoly law is meant to protect from. Government will protect you by ensuring that there is no cheaper competing product, so that you will end up buying Cheerios at higher price. This will reduce the monopoly, and make the cereal market more competitive. Does that make sense to you? (It shouldn’t, because it doesn’t.)
  - 8note 5y ago
    It's just missing steps on breaking up General Mills, and grants for starting new cereal businesses
    - emodendroket 5y ago
      Seems like a tremendous use of energy and resources for little to no benefit.

throwawaycities 5y ago

Can you really not distinguish Amazon, it’s market position, and their acts from brick and mortar retailers that carry private label items? Even if you can’t distinguish Amazon’s conduct and a grocery store selling private label cereals side by side, the article really isn’t about that anyway but the fact that Amazon went before congress and was asked about prioritizing their private label products in search results over other sellers and Amazon representative lied under oath by denying they do that. I’m not aware of Target going before Congress and lying under oath about selling private label products, one would think if Amazon’s conduct was on the up and up they wouldn’t lie under oath to cover it up.

devin 5y ago
Let’s try it and see.
fiddlerwoaroof 5y ago
Isn’t it still the case that Walmart and similar brick and mortar stores have significantly higher revenue than Amazon’s e-commerce revenue? If anything, it’s worse for traditional stores because they have limited shelf space and so store brands can prevent name brands from even being available.
- tw04 5y ago
  No, no it isn’t the case. Walmart is the only one with more revenue, but they don’t have AWS margins to prop up everything else. I think we’d all be better off if we didn’t have a 2-horse race for 90% of our purchases… Target (#3)had $93b in revenue in FY2020. Amazon e-commerce had $120b. https://corporate.target.com/annual-reports/2020 https://corporate.target.com/annual-reports/2020 https://www.statista.com/forecasts/1218313/amazon-revenue-development-ecommercedb https://www.statista.com/forecasts/1218313/amazon-revenue-de...
  - didibus 5y ago
    I'd agree if we had a 2-horse race, but I don't see it, there are a ton of competing retail stores both online and offline. And especially online, it's not like you're limited geographically where say your only store that has what you want is a big Walmart, you have access to hundreds of online retailer to choose from.

kennywinker 5y ago

On top of the lying, which another commenter pointed out is the major issue - Target doesn't pretend to be a marketplace. It's a curated store, some of the products are whitelabel, some are not. Amazon presents itself as a marketplace, where buyers and sellers can come together. Imagine I owned a shopping mall, and every time a business renting from me was successful I would hike up their rent and open a copycat shop in the stall next door... I think that's a closer analogy than the Target one.

tarr11 5y ago
Most corporate mall landlords have a requirement that you submit your monthly sales numbers and take a percentage of sales in addition to your rent.
- asdff 5y ago
  Most retail stores also price shelf space according to sales too. Amazon on the other hand doesn't have any mechanism for you the brand to get preferential shelf space. In a mall you probably want a store by the entrance where everyone walks by, in a target you want shelf space at eye level, so there might be a premium for these spaces if you would like them. Can't do anything like that on Amazon. Third party scam products and name brands are weighed equally in search results. Amazon products actually get better placement, something you'd never see in a Target with their store brands since third party brands want to buy access to better placement and target wants to lease space at a premium to these brands.
didibus 5y ago
> Target Plus Marketplace is one of the top-tier eCommerce marketplaces, along with Amazon Marketplace and Walmart Marketplace, that cater to third party retailers. Target, one of the biggest retail chains in the United States, entered the eCommerce marketing realm in February 2019 and expanded its product assortment by allowing third party retailers to sell on Target.com
- tablespoon 5y ago

tablespoon 5y ago

> What I don’t get it’s why they care now when this is an old retail strategy. Older than Amazon itself. > Target is the epitome of pushing you white label brands down your throat from the minute you step into own of their stores. And this is essentially what every retailer does. But Amazon isn't a simple retailer. Isn't the issue that they do this and operate a third party marketplace? IIRC, Target is a traditional retailer that doesn't operate a marketplace for other retailers to compete in.

emodendroket 5y ago
How different is Target's relationship to its suppliers from third-party Amazon sellers really? In many cases it's the same entity that wants to appear prominently in both venues.
- asdff 5y ago
  Target is in the business of leasing shelf space. If you are a third party and want prominent placement in the store, target will lease that shelf to you. If you notice where target's third party stuff is placed, its actually rarely at eye level. That premium placement is reserved for other brands to lease at top dollar. Target probably makes more money selling less of their store brand and leasing primo space than they do if they were to use that primo space to sell more of their store brand and lease the bottom shelves. Amazon on the other hand doesn't work like a retail store. You aren't leasing a finite amount of space within the Amazon website. You are beholden to the search algorithm run by amazon which is a black box compared to an agreement made for shelf space in a retail store, you don't pay less for worse placement and you can't pay more for better placement, and Amazon continually tries to poach your business with low cost knockoffs and their search engines are uncannily tailored to prefer these results.
  - emodendroket 5y ago
    Isn't paying for sponsored results more or less equivalent to paying for better shelf space? The space may not "really" be limited, but for practical purposes, the second page of search results barely exists.

asdff 5y ago

It's a different situation in retail than what goes on with the amazon website. It's not a marketplace in the sense amazon is, brands are leasing specific shelf space. They pay an agreed upon price for these shelves and that's what they receive. Amazon doesn't abide to anything like this. To use a target example, it would be like they just threw all the third party stuff to the back of the store and only left the target brand stuff at eye level in the aisles, when that's not the case since the third party stuff has the best placement in the store. Brands typically pay extra for prominent shelf space position right at eye level and receive it, they aren't getting worked here by target like brands are by amazon when their results are pushed below the fold in favor of amazon basics products.

diffeomorphism 5y ago

Scale. Pointing at any one retailer and saying "that is scummy, stop it" does not work, feels arbitrary and "then go elsewhere" is actually an option. If Amazon or a number of large chains do it, there is no reasonable alternative. Case in point from Germany. If small supermarket chains treat their suppliers badly, that is their business. If Aldi (very large chain) does, this is potentialky ruinous for many companies, so politics do get involved. It always is a tradeoff between the possible harm, number of people affected and the desire to not intervene if at all possible.

sidm83 5y ago

In India, this is being dealt with in a different way. Amazon India and Flipkart (controlled by Walmart) are treated as a "marketplace", ie providing a platform for other sellers. There are strict rules to limit domination of a few sellers on the platform (limits on percentage of sales by each seller). Neither of the two companies are particularly happy about it so probably it works to some extent. https://www.livemint.com/industry/retail/ecommerce-companies-to-write-to-govt-against-draft-rules-11624910348605.html https://www.livemint.com/industry/retail/ecommerce-companies...

timoth3y 5y ago

> how me one retailer that doesn’t do this. The thing is, Amazon claims they are not a retailer, but rather a neutral marketplace matching buyer and seller. Tat's why they claim they should not be held responsible for false advertising, violations of consumer protection laws, or defective products. However, when they misuse that marketplace data, they turn around and claim that they are just one retailer among many. It's getting harder and harder for Amazon to maintain this legal equivocation.