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"This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+." Is this not just a market effect of saturati

"This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+." Is this not just a market effect of saturating the market with competition because suddenly running a business is comparatively easy (communications technology, platforms and existing logistics and production networks) to any other era. I can probably start a company drop shipping crap on Amazon in a short amount of time with a smartphone from my bedroom. The barrier to entry has dropped, rather quickly.

berniedurfee 3y ago
Very similar to the music industry, where technology has made producing music so easy the market is growing by tens of millions of new songs every year. The slices of pie are getting very thin indeed. Especially when there are only a few pie delivery services to choose from and they take their slice first.
- deepsun 3y ago
  In efficient market every business must have razor-thin margins, otherwise competitors squeeze into it. Good fat margins are a result of an ineffective market.
  - hnlmorg 3y ago
    So Amazon making good fat margins on every small business that sells on Amazon is demonstration of an ineffective market. And hence why the FTC are stepping in.
    - deepsun 3y ago
      Comparing to Apple, Amazon margins are thin.
      - hnlmorg 3y ago
        You’re basically comparing despots though.
    - hellojesus 3y ago
      What? Amazon is offering lower prices to consumers, which is why they're winning business. If other competitors could get their costs as low or lower than Amazon's, then they could enjoy those margins themselves.
      - hnlmorg 3y ago
        I cannot speak for every location, but Amazon isn’t the cheapest in the UK. I would say it is about average. Where Amazon wins is the range of stock and its next day deliveries. Which means most people default to Amazon because it’s quicker and easier than shopping around. But you can definitely get cheaper if you were to shop around. Also by Amazon owning the whole pipeline, from stock to delivery, they can squeeze costs down and thus improve their margins. For example, I guarantee you that other online retailers are paying more to ship their products than Amazon are.
        hellojesus 3y ago
        I agree fully, but Amazon is still the "cheapest" when you consider the all in price of cost_of_goods+cost_of_delivery|want_goods_in_fewer_than_two_days. Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created. Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider.
        hnlmorg 3y ago
        > I agree fully, but Amazon is still the "cheapest" when you consider the all in price of cost_of_goods+cost_of_delivery|want_goods_in_fewer_than_two_days. Why say you agree when you only go on to disagree with me? I've bought plenty of things cheaper on other sites. Delivery included. There have been things that were cheaper on Amazon as well. This is why I said it's about average. But there are so many variables at play here (location, items you're looking to purchase, etc) that it might just be easier to agree to disagree. > Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created. Those vertically integrated pipelines come with significant cost savings though. That's why they do it. And because it saves them $$$, it then also increases their margins. > Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider. Those two arguments aren't mutually inclusive. Other companies might be offering cheaper prices but making a loss in the hope that loyalty will win customers in the long run. Or other corners might get cut that could ultimately lead to that businesses demise, such as not hiring skilled staff, not following health and safety or other local laws, etc. And even if none of the aforementioned is true, it still doesn't mean that Amazon aren't being anti-competitive. Also "anti-competitive behaviour" applies to how they block other businesses from competing. You cannot be "anti-competitive to the consumer"
SenAnder 3y ago
Amazon inflating rates after capturing the market, permitting counterfeits, and penalizing sellers offering lower prices off-Amazon, has nothing to do with market efficiency or commoditization.
- starluz 3y ago
  Not saying it’s right but this has been their business model from day one back when it was just books
- midoridensha 3y ago
  There should be some tough laws against selling counterfeits, with harsh penalties.
  - reuben364 3y ago
    Simultaneously, there must be harsh penalties for abusing that system. See Samsung's use of a patent on display technology to label third party displays as counterfeits, despite not using that patent nor misrepresenting themselves as Samsung screens. https://www.youtube.com/watch?v=A002AesVaFk https://www.youtube.com/watch?v=A002AesVaFk
- hellojesus 3y ago
  > and penalizing sellers offering lower prices off-Amazon Why shouldn't they be allowed to do this? If you want to sell on their market, you promise not to undercut them. Amazon exists as a discovery tool for consumers. They don't want third party sellers to get free advertising. That isn't anticompetitive.
  - SenAnder 3y ago
    You've explained what gives Amazon the leverage to set such terms, and why they'd want to set such terms, but you haven't explained why preventing other platforms/sellers from competing on price isn't anti-competitive - you merely asserted that it is so.
xphilter 3y ago
Running a business being easy is limited to these low-value drop-ship businesses. Running an actual business is hard. What they’re doing is just arbitrage: buying in bulk from Ali Baba and selling individually on Amazon. No value would be lost if these companies went away. Compare that to a bookstore or cafe being closed in your town.

berniedurfee 3y ago

Very similar to the music industry, where technology has made producing music so easy the market is growing by tens of millions of new songs every year. The slices of pie are getting very thin indeed. Especially when there are only a few pie delivery services to choose from and they take their slice first.

deepsun 3y ago
In efficient market every business must have razor-thin margins, otherwise competitors squeeze into it. Good fat margins are a result of an ineffective market.
- hnlmorg 3y ago
  So Amazon making good fat margins on every small business that sells on Amazon is demonstration of an ineffective market. And hence why the FTC are stepping in.
  - deepsun 3y ago
    Comparing to Apple, Amazon margins are thin.
    - hnlmorg 3y ago
      You’re basically comparing despots though.
  - hellojesus 3y ago
    What? Amazon is offering lower prices to consumers, which is why they're winning business. If other competitors could get their costs as low or lower than Amazon's, then they could enjoy those margins themselves.
    - hnlmorg 3y ago
      I cannot speak for every location, but Amazon isn’t the cheapest in the UK. I would say it is about average. Where Amazon wins is the range of stock and its next day deliveries. Which means most people default to Amazon because it’s quicker and easier than shopping around. But you can definitely get cheaper if you were to shop around. Also by Amazon owning the whole pipeline, from stock to delivery, they can squeeze costs down and thus improve their margins. For example, I guarantee you that other online retailers are paying more to ship their products than Amazon are.
      - hellojesus 3y ago
        I agree fully, but Amazon is still the "cheapest" when you consider the all in price of cost_of_goods+cost_of_delivery|want_goods_in_fewer_than_two_days. Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created. Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider.
        hnlmorg 3y ago
        > I agree fully, but Amazon is still the "cheapest" when you consider the all in price of cost_of_goods+cost_of_delivery|want_goods_in_fewer_than_two_days. Why say you agree when you only go on to disagree with me? I've bought plenty of things cheaper on other sites. Delivery included. There have been things that were cheaper on Amazon as well. This is why I said it's about average. But there are so many variables at play here (location, items you're looking to purchase, etc) that it might just be easier to agree to disagree. > Amazon has the most efficient business, which allows them to survive on lower margins and attract buyers because of the vertically integrated pipeline they've created. Those vertically integrated pipelines come with significant cost savings though. That's why they do it. And because it saves them $$$, it then also increases their margins. > Your example of other companies selling the same product at cheaper prices helps to illuminate the fact that there isn't any real impact from the supposed anti-competitive behavior to the consumer. Cheaper prices still exist! Amazon hasn't become the sole provider. Those two arguments aren't mutually inclusive. Other companies might be offering cheaper prices but making a loss in the hope that loyalty will win customers in the long run. Or other corners might get cut that could ultimately lead to that businesses demise, such as not hiring skilled staff, not following health and safety or other local laws, etc. And even if none of the aforementioned is true, it still doesn't mean that Amazon aren't being anti-competitive. Also "anti-competitive behaviour" applies to how they block other businesses from competing. You cannot be "anti-competitive to the consumer"

SenAnder 3y ago

Amazon inflating rates after capturing the market, permitting counterfeits, and penalizing sellers offering lower prices off-Amazon, has nothing to do with market efficiency or commoditization.

starluz 3y ago
Not saying it’s right but this has been their business model from day one back when it was just books
midoridensha 3y ago
There should be some tough laws against selling counterfeits, with harsh penalties.
- reuben364 3y ago
  Simultaneously, there must be harsh penalties for abusing that system. See Samsung's use of a patent on display technology to label third party displays as counterfeits, despite not using that patent nor misrepresenting themselves as Samsung screens. https://www.youtube.com/watch?v=A002AesVaFk https://www.youtube.com/watch?v=A002AesVaFk
hellojesus 3y ago
> and penalizing sellers offering lower prices off-Amazon Why shouldn't they be allowed to do this? If you want to sell on their market, you promise not to undercut them. Amazon exists as a discovery tool for consumers. They don't want third party sellers to get free advertising. That isn't anticompetitive.
- SenAnder 3y ago
  You've explained what gives Amazon the leverage to set such terms, and why they'd want to set such terms, but you haven't explained why preventing other platforms/sellers from competing on price isn't anti-competitive - you merely asserted that it is so.

xphilter 3y ago

Running a business being easy is limited to these low-value drop-ship businesses. Running an actual business is hard. What they’re doing is just arbitrage: buying in bulk from Ali Baba and selling individually on Amazon. No value would be lost if these companies went away. Compare that to a bookstore or cafe being closed in your town.