5 ms·

> “fair pricing policy.” Even though some competing platforms charge much lower fees, if Steve lowers his prices on another shopping site, Amazon’s algorithms

> “fair pricing policy.” Even though some competing platforms charge much lower fees, if Steve lowers his prices on another shopping site, Amazon’s algorithms punish him How the hell is this legal? Who do I donate to in order to start the ball rolling on making it illegal?

ceejayoz 5y ago
https://en.wikipedia.org/wiki/Most-Favoured-Customer_Clause https://en.wikipedia.org/wiki/Most-Favoured-Customer_Clause
- jjoonathan 5y ago
  Thanks for pointing me to the name. These things are gross, and we need to get rid of them ASAP. The whole spirit of market capitalism is "players are allowed to be relentlessly self-interested but we rely on competition to keep them in check." MFCs clearly undermine competition and therefore undermine the very foundation of our economy.
  - aidenn0 5y ago
    They exist on the other side of too: Discover typically charges the merchant lower fees than AmEx does when you checkout at a retailer. However the merchant is forbidden by it's agreements with AmEx (and Visa, and Mastercard) from giving you a discount if you use Discover card.
    - jjoonathan 5y ago
      You'll never guess what I think about credit card interchange fees and the contracts that prevent these prices from being exposed to the customers who could force Visa, Mastercard, and Discover to actually compete on price.
    - jessaustin 5y ago
      This should also be illegal, but one wouldn't expect much movement on this issue during the presidency of "the senator from MBNA".
    - listenallyall 5y ago
      You could word this as "AmEx protects its customers by ensuring stores cannot tack on an AmEx surcharge" and it would be exactly as true as the way you stated it. Two sides to every story, and all that.
      - aidenn0 5y ago
        Except cardholders are not the same thing as customers. AmEx makes most of its money from merchants not cardholders. AmEx attracts cardholders with low fees and perks, and leverages the resultant large base of cardholders to force its customers (the merchants) to pay higher transaction fees.
        ceejayoz 5y ago
        Low fees? Amex? They do make about half their revenue off swipes, but I wouldn't describe Amex as low fee to cardholders. Their flagship card has an annual fee of $695.
        aidenn0 5y ago
        That's relatively low fee for a membership-perks charge card. They also offer zero annual fee credit cards.
        ceejayoz 5y ago
        Pretty much every lender offers some zero-fee cards, and Amex is pretty unusual in having charge cards at all. Amex relies more heavily on annual fees than their competitors in the space - Chase, Citi, Wells Fargo, Capital One... What lender are you thinking of that makes Amex look low-fee?
        aidenn0 5y ago
        Diners club used to be more. They got sold for parts though
        5y ago
NikolaNovak 5y ago
I think there's context & detail beyond immediate outrage. In context of article with specific point to make, it sounds awful. But think about it: if e.g. Marriott starts selling rooms for $100 on their website, but $120 on any other site such as Bookings or Expedia or whatever, isn't this ALSO something you as a consumer would get peeved at? Wouldn't you immediately demand that they put a stop to that insidious practice, and regulate some law that forces Marriott to give same low prices to everybody? :->
- jjoonathan 5y ago
  I'm sure Expedia would try to spin it that way. But no, if Expedia wants a $20 cut, they should be providing a $20 service.
- lyubalesya 5y ago
  Absolutely not. It is obvious that different sales channels have different overheads, that should be reflected in the price. E.g. shops owned by farmer co-ops are able to offer lower prices because there are fewer middle-men taking a cut.
- willcipriano 5y ago
  > if e.g. Marriott starts selling rooms for $100 on their website, but $120 on any other site such as Bookings or Expedia or whatever, isn't this ALSO something you as a consumer would get peeved at? I'm mad it's the other way around, the cheapest price should always be direct. If someone wants to "add value" let them justify the mark up.
listenallyall 5y ago
Why would you possibly want a bureaucrat in Washington, or committee of such, overseeing Amazon's pricing decisions? Amazon's policy makes total sense. If you discover an item on its site, benefit from its reviews, specs and descriptions, and then last minute, go buy at Newegg or Walmart or wherever because its $20 cheaper, how does that help Amazon? Amazon would rather have you "discover" items that it sells at the lowest price, and thus lowest probability of you going to an alternative store. I don't like Amazon's massive dominance but I can't blame them for directing you to items you are most likely to buy from them.
- jjoonathan 5y ago
  Obviously Amazon's anticompetitive behavior is good for Amazon. Why on earth does that make it good for me? Why shouldn't I oppose it?
  - listenallyall 5y ago
    Your comment isn't an argument, just a pair of questions. Don't ask me to justify your opinion, figure it out yourself. Amazon promoting products that Amazon is most likely to sell is NOT "anticompetitive behavior." Every company seeks to do things to benefit themselves. Do you oppose them all?
    - jjoonathan 5y ago
      Yeah, yeah, you're "just asking questions." Lol. Questions that relentlessly frame the matter in an agrgessively pro-amazon stance. Amazon is obviously free to show the best deals on Amazon. That's not at all what this is about, and you know it.
    - jessaustin 5y ago
      You don't seem to be discussing this in good faith. Obviously most consumers prefer what is good for consumers rather than what is good for giant retailers. We don't have to justify that to anyone.
Svettie 5y ago
Amazon wants to be the place with the lowest prices, and to be known as such. If Steve wanted to sell through a traditional retailer, he would wholesale to them and they would set the price to whatever they want. Amazon's model is different, but not really. Imagine Steve could come in to negotiate a wholesale price with an Amazon rep. Amazon would say: "Steve, we want to have the lowest prices in the marketplace. We checked 10 other stores, and the lowest price we found is $10. So, if we make a deal today, that would have to be our retail price. Now, working backwards, if we subtract our profit margin and expenses, the best wholesale price we would buy at from you is $3. Take it or leave it." Also, what are these competing platforms charging much lower fees? In any case, if you're not profitable selling at the lowest price on Amazon, you don't have to sell on Amazon. You can go to these other platforms, or set up your own website. And the reason you won't want to do that is because actually Amazon offers a lot of value both to sellers and customers.

ceejayoz 5y ago

https://en.wikipedia.org/wiki/Most-Favoured-Customer_Clause https://en.wikipedia.org/wiki/Most-Favoured-Customer_Clause

jjoonathan 5y ago
Thanks for pointing me to the name. These things are gross, and we need to get rid of them ASAP. The whole spirit of market capitalism is "players are allowed to be relentlessly self-interested but we rely on competition to keep them in check." MFCs clearly undermine competition and therefore undermine the very foundation of our economy.
- aidenn0 5y ago
  They exist on the other side of too: Discover typically charges the merchant lower fees than AmEx does when you checkout at a retailer. However the merchant is forbidden by it's agreements with AmEx (and Visa, and Mastercard) from giving you a discount if you use Discover card.
  - jjoonathan 5y ago
    You'll never guess what I think about credit card interchange fees and the contracts that prevent these prices from being exposed to the customers who could force Visa, Mastercard, and Discover to actually compete on price.
  - jessaustin 5y ago
    This should also be illegal, but one wouldn't expect much movement on this issue during the presidency of "the senator from MBNA".
  - listenallyall 5y ago
    You could word this as "AmEx protects its customers by ensuring stores cannot tack on an AmEx surcharge" and it would be exactly as true as the way you stated it. Two sides to every story, and all that.
    - aidenn0 5y ago
      Except cardholders are not the same thing as customers. AmEx makes most of its money from merchants not cardholders. AmEx attracts cardholders with low fees and perks, and leverages the resultant large base of cardholders to force its customers (the merchants) to pay higher transaction fees.
      - ceejayoz 5y ago
        Low fees? Amex? They do make about half their revenue off swipes, but I wouldn't describe Amex as low fee to cardholders. Their flagship card has an annual fee of $695.
        aidenn0 5y ago
        That's relatively low fee for a membership-perks charge card. They also offer zero annual fee credit cards.
        ceejayoz 5y ago
        Pretty much every lender offers some zero-fee cards, and Amex is pretty unusual in having charge cards at all. Amex relies more heavily on annual fees than their competitors in the space - Chase, Citi, Wells Fargo, Capital One... What lender are you thinking of that makes Amex look low-fee?
        aidenn0 5y ago
        Diners club used to be more. They got sold for parts though
      - 5y ago

NikolaNovak 5y ago

I think there's context & detail beyond immediate outrage. In context of article with specific point to make, it sounds awful. But think about it: if e.g. Marriott starts selling rooms for $100 on their website, but $120 on any other site such as Bookings or Expedia or whatever, isn't this ALSO something you as a consumer would get peeved at? Wouldn't you immediately demand that they put a stop to that insidious practice, and regulate some law that forces Marriott to give same low prices to everybody? :->

jjoonathan 5y ago
I'm sure Expedia would try to spin it that way. But no, if Expedia wants a $20 cut, they should be providing a $20 service.
lyubalesya 5y ago
Absolutely not. It is obvious that different sales channels have different overheads, that should be reflected in the price. E.g. shops owned by farmer co-ops are able to offer lower prices because there are fewer middle-men taking a cut.
willcipriano 5y ago
> if e.g. Marriott starts selling rooms for $100 on their website, but $120 on any other site such as Bookings or Expedia or whatever, isn't this ALSO something you as a consumer would get peeved at? I'm mad it's the other way around, the cheapest price should always be direct. If someone wants to "add value" let them justify the mark up.

listenallyall 5y ago

Why would you possibly want a bureaucrat in Washington, or committee of such, overseeing Amazon's pricing decisions? Amazon's policy makes total sense. If you discover an item on its site, benefit from its reviews, specs and descriptions, and then last minute, go buy at Newegg or Walmart or wherever because its $20 cheaper, how does that help Amazon? Amazon would rather have you "discover" items that it sells at the lowest price, and thus lowest probability of you going to an alternative store. I don't like Amazon's massive dominance but I can't blame them for directing you to items you are most likely to buy from them.

jjoonathan 5y ago
Obviously Amazon's anticompetitive behavior is good for Amazon. Why on earth does that make it good for me? Why shouldn't I oppose it?
- listenallyall 5y ago
  Your comment isn't an argument, just a pair of questions. Don't ask me to justify your opinion, figure it out yourself. Amazon promoting products that Amazon is most likely to sell is NOT "anticompetitive behavior." Every company seeks to do things to benefit themselves. Do you oppose them all?
  - jjoonathan 5y ago
    Yeah, yeah, you're "just asking questions." Lol. Questions that relentlessly frame the matter in an agrgessively pro-amazon stance. Amazon is obviously free to show the best deals on Amazon. That's not at all what this is about, and you know it.
  - jessaustin 5y ago
    You don't seem to be discussing this in good faith. Obviously most consumers prefer what is good for consumers rather than what is good for giant retailers. We don't have to justify that to anyone.

Svettie 5y ago

Amazon wants to be the place with the lowest prices, and to be known as such. If Steve wanted to sell through a traditional retailer, he would wholesale to them and they would set the price to whatever they want. Amazon's model is different, but not really. Imagine Steve could come in to negotiate a wholesale price with an Amazon rep. Amazon would say: "Steve, we want to have the lowest prices in the marketplace. We checked 10 other stores, and the lowest price we found is $10. So, if we make a deal today, that would have to be our retail price. Now, working backwards, if we subtract our profit margin and expenses, the best wholesale price we would buy at from you is $3. Take it or leave it." Also, what are these competing platforms charging much lower fees? In any case, if you're not profitable selling at the lowest price on Amazon, you don't have to sell on Amazon. You can go to these other platforms, or set up your own website. And the reason you won't want to do that is because actually Amazon offers a lot of value both to sellers and customers.