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> I guess it’s a little confusing because when Amazon sets a maximum price policy on their marketplace pegged against others, it in effect creates a minimum pri

by rkk3 5y ago

> I guess it’s a little confusing because when Amazon sets a maximum price policy on their marketplace pegged against others, it in effect creates a minimum price policy on other marketplaces. I just don't find it a convincing argument of harm to the consumer. Let's look at restaurants & delivery apps as distribution channels. They charge 12-15 dollars through the menu on the app for a 10 dollar-hamburger if I had ordered in person, because the margins are different. It's not benefiting the consumer, it's benefiting the business and is actually a deceptive practice to the consumer.

jessaustin 5y ago
This example proves the opposite of what you appear to intend. Amazon is the more expensive channel. Of course they would want to force the in-person hamburger price up to $15, so no one gets off his ass and walks down the block when he craves a hamburger. Doordash or whoever don't have the market power to do that now. If somehow they gained such market power (say a worse covid strain appears and only their drivers get to deliver food?), that would harm both consumers and restaurants, helping only the abusive rent-seeking middleman. Free people don't have to abide this kind of shit. This has been illegal in USA since 1890. The only hope for Amazon is to hire every decent economic torts lawyer in the nation before e.g. Shopify get their act together. This is open-and-shut restraint of trade. Given the sums involved, it might actually be possible that a year or two could pass when Bezos doesn't get even more stinking rich...
- rkk3 5y ago
  Amazon is not allowing the the price to be raised for the Consumer. My local FiveGuys sells a Cheeseburger for $11.87 Thru DoorDash app but for $9.89 thru the FiveGuys App. We aren't even talking about a different service like Delivery vs Pickup, those fee's get layered in later -- its the same menu priced 20% higher to pass costs of the partnership onto the customer. This is anti-consumer and deceptive and is the sort of behavior Amazon prevents with their policy.
  - jessaustin 5y ago
    The additional $1.98 is going to Doordash. It represents the additional value that their service provides. If the service isn't worth that much to you, then don't use Doordash. $9.89 is a surprisingly high price for a cheeseburger, but that is apparently what it costs for Fiveguys to pay their costs and make a suitable profit. They don't have $1.98 left over to subsidize Doordash, any more than they have $19.98 left over to subsidize Doordash's more expensive competitor ThresholdSaunter or $199.98 left over to subsidize their even more expensive competitor PorchCrawl. So, in every case, the costs of the additional service are passed on to those customers who want that service. If you can explain why PorchCrawl's service costs $199.98 per cheeseburger then you might have a clue why Doordash's service costs $1.98... You're still completely confused about your own analogy. Fiveguys are analogous to product vendors, in that they actually have the thing that the customer wants. Doordash are analogous to Amazon, in that they charge a fee for delivery of the thing that the customer wants.
    - rkk3 5y ago
      > The additional $1.98 is going to Doordash Yes it is > It represents the additional value that their service provides. In theory but that is with non real world assumptions. In this case, I would be charged 20% more for the identical hamburger either being delivered to my house or me picking it up from the store because of how I placed the order. It has more to do with lack of transparency on the platform and deceptive billing practices than value add. Amazon uses their leverage to not allow vendors to charge 20% to pad their margins. F@#$ DoorDash for lying about prices on their platform and allowing vendors to pass it on to consumers.
      - mint2 5y ago
        You’re missing a major point, it’s similar to credit cards if a cash discount is banned. People would be forced to subsidize the credit card users and their cash back points as credit cards cannot be charged more. Continuing the doordash if it were like Amazon, the 1.98 extra for ordering on door dash is forced to be also charged to people who go pick it up themselves. That doesn’t make sense but that’s what Amazon is doing. Amazon is not forbidding them from padding the price, its forcing them to pad the price elsewhere in order to make that elsewhere uncompetitive. it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does. For your view of it to be correct, the cost of an item would have to be separated into two categories, marketplace fees and base item cost. Market place fees would include every cost of selling on Amazon, any percent they take. Then if Amazon said that the base item cost must not be lower anywhere else, but the marketplace fee portion can vary, then yes your view would be correct. However, Amazon is actually saying yeah our marketplace fee portion may be exorbitantly higher, but you have to charge people our high prices even on other cheaper marketplaces

by rkk3 5y ago

jessaustin 5y ago

This example proves the opposite of what you appear to intend. Amazon is the more expensive channel. Of course they would want to force the in-person hamburger price up to $15, so no one gets off his ass and walks down the block when he craves a hamburger. Doordash or whoever don't have the market power to do that now. If somehow they gained such market power (say a worse covid strain appears and only their drivers get to deliver food?), that would harm both consumers and restaurants, helping only the abusive rent-seeking middleman. Free people don't have to abide this kind of shit. This has been illegal in USA since 1890. The only hope for Amazon is to hire every decent economic torts lawyer in the nation before e.g. Shopify get their act together. This is open-and-shut restraint of trade. Given the sums involved, it might actually be possible that a year or two could pass when Bezos doesn't get even more stinking rich...

rkk3 5y ago
Amazon is not allowing the the price to be raised for the Consumer. My local FiveGuys sells a Cheeseburger for $11.87 Thru DoorDash app but for $9.89 thru the FiveGuys App. We aren't even talking about a different service like Delivery vs Pickup, those fee's get layered in later -- its the same menu priced 20% higher to pass costs of the partnership onto the customer. This is anti-consumer and deceptive and is the sort of behavior Amazon prevents with their policy.
- jessaustin 5y ago
  The additional $1.98 is going to Doordash. It represents the additional value that their service provides. If the service isn't worth that much to you, then don't use Doordash. $9.89 is a surprisingly high price for a cheeseburger, but that is apparently what it costs for Fiveguys to pay their costs and make a suitable profit. They don't have $1.98 left over to subsidize Doordash, any more than they have $19.98 left over to subsidize Doordash's more expensive competitor ThresholdSaunter or $199.98 left over to subsidize their even more expensive competitor PorchCrawl. So, in every case, the costs of the additional service are passed on to those customers who want that service. If you can explain why PorchCrawl's service costs $199.98 per cheeseburger then you might have a clue why Doordash's service costs $1.98... You're still completely confused about your own analogy. Fiveguys are analogous to product vendors, in that they actually have the thing that the customer wants. Doordash are analogous to Amazon, in that they charge a fee for delivery of the thing that the customer wants.
  - rkk3 5y ago
    > The additional $1.98 is going to Doordash Yes it is > It represents the additional value that their service provides. In theory but that is with non real world assumptions. In this case, I would be charged 20% more for the identical hamburger either being delivered to my house or me picking it up from the store because of how I placed the order. It has more to do with lack of transparency on the platform and deceptive billing practices than value add. Amazon uses their leverage to not allow vendors to charge 20% to pad their margins. F@#$ DoorDash for lying about prices on their platform and allowing vendors to pass it on to consumers.
    - mint2 5y ago
      You’re missing a major point, it’s similar to credit cards if a cash discount is banned. People would be forced to subsidize the credit card users and their cash back points as credit cards cannot be charged more. Continuing the doordash if it were like Amazon, the 1.98 extra for ordering on door dash is forced to be also charged to people who go pick it up themselves. That doesn’t make sense but that’s what Amazon is doing. Amazon is not forbidding them from padding the price, its forcing them to pad the price elsewhere in order to make that elsewhere uncompetitive. it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does. For your view of it to be correct, the cost of an item would have to be separated into two categories, marketplace fees and base item cost. Market place fees would include every cost of selling on Amazon, any percent they take. Then if Amazon said that the base item cost must not be lower anywhere else, but the marketplace fee portion can vary, then yes your view would be correct. However, Amazon is actually saying yeah our marketplace fee portion may be exorbitantly higher, but you have to charge people our high prices even on other cheaper marketplaces