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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

by 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
    - rkk3 5y ago
      >it’s similar to credit cards if a cash discount is banned. [1] A merchant is permitted to offer discounts for paying in cash, however, the discount must be given as a reduction from the standard price. Does Amazon prevent you from offering promotions or discount code's on your own Shopify site? Otherwise I don't think it's analogous. > it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does. No it's forbidding them from passing on the costs of the partnership, to Amazon's customers > 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. Which in my example you do have. The consumer experience is almost identical... I can place order for pickup/delivery thru the FiveGuy's app or thru the DoorDash app, but thru DoorDash the FiveGuys menu is priced 20% higher to pass-on the cost of the partnership to DoorDash's customers, instead of FiveGuy's selling a burger at lower margin. If Amazon remove's the policy, prices go up 20% on Amazon to be at the same margin of their Shopify app or w/e. It's the businesses Amazon was squeezing who will benefit not the consumer. Maybe we shouldn't let Amazon or other oligopolies have that much power over vendors but they are taking the side of Amazon customers here. And at the end of the day... some distribution channels are more expensive than they are worth. If the commercials don't make sense, stop listing on Amazon. [1] https://usa.visa.com/support/consumer/visa-rules.html https://usa.visa.com/support/consumer/visa-rules.html

by rkk3 5y ago

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
  - rkk3 5y ago
    >it’s similar to credit cards if a cash discount is banned. [1] A merchant is permitted to offer discounts for paying in cash, however, the discount must be given as a reduction from the standard price. Does Amazon prevent you from offering promotions or discount code's on your own Shopify site? Otherwise I don't think it's analogous. > it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does. No it's forbidding them from passing on the costs of the partnership, to Amazon's customers > 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. Which in my example you do have. The consumer experience is almost identical... I can place order for pickup/delivery thru the FiveGuy's app or thru the DoorDash app, but thru DoorDash the FiveGuys menu is priced 20% higher to pass-on the cost of the partnership to DoorDash's customers, instead of FiveGuy's selling a burger at lower margin. If Amazon remove's the policy, prices go up 20% on Amazon to be at the same margin of their Shopify app or w/e. It's the businesses Amazon was squeezing who will benefit not the consumer. Maybe we shouldn't let Amazon or other oligopolies have that much power over vendors but they are taking the side of Amazon customers here. And at the end of the day... some distribution channels are more expensive than they are worth. If the commercials don't make sense, stop listing on Amazon. [1] https://usa.visa.com/support/consumer/visa-rules.html https://usa.visa.com/support/consumer/visa-rules.html