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It is none of Amazons business what prices they put when they list their wares on other services, the only reason they care is that they want to crush the compe
by Jensson 3y ago
It is none of Amazons business what prices they put when they list their wares on other services, the only reason they care is that they want to crush the competition.
Dictating how retailers can interact with your competitors is anti-competitive. Dictating what prices they can offer when they put up listings is a part of that, it is anti-competitive.
- endisneigh 3y ago[flagged]
- tartuffe78 3y agoAmazon is abusing it's monopoly power to hurt competition, when Amazon is the only place to certain things, consumer cost will go up.
- endisneigh 3y ago> when Amazon is the only place to certain things No seller is obligated to sell on Amazon to begin with, so this entire premise is false.
- smoldesu 3y ago"No manufacturer is obligated to buy Standard Oil or Carnegie steel, so this entire premise is false."
- endisneigh 3y agoYes, because there are not literally thousands of e-commerce stores out there. Amazon is the only one. UPS, USPS and FedEx don't exist either. You must use Prime to transport your stuff.
- smoldesu 3y agoLook, with this reasoning there is literally no world in which Amazon can be implicated for monopoly abuse of power. Apparently, having any other option (even if it is damaged by monopoly abuse) is good enough for you. Clearly the FTC disagrees with your logic, and I'm glad they do. FedEx, UPS and USPS should be sued too if they did what Amazon is doing.
- endisneigh 3y agoThe FTC disagrees, but they will lose, as they've lost before.
- smoldesu 3y agoIt's definitely not just the FTC. 3 years ago, the European commission launched an investigation for the same thing: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077 https://ec.europa.eu/commission/presscorner/detail/en/ip_20_... If the FTC doesn't get them, rest easy. At least Europe knows how to keep their market on a leash.
- fzeroracer 3y agoI assume you're not familiar with Walmart or how they operate?
- Jensson 3y agoHow is Amazon forcing them to raise prices on other platforms pro consumer? The only one who benefits from this arrangement is Amazon, everyone else including the consumer just loses out.
- endisneigh 3y agoAmazon is not forcing them to raise prices on other platforms? Amazon is telling their sellers that they must offer the best price on their platform. That does not necessarily mean they have to raise prices on other platforms.
- belltaco 3y agoIf another ecommerce platform wants to compete on price to encourage customers to shop there, they cannot. Any discounts will only go to the seller's bottomline. How is that helping customers?
- endisneigh 3y agoAmazon wants its customers to have the lowest available price. Their rule ensures that. It's very simple.
- dwallin 3y agoClearly you are not a believer in free markets, because by the theory of free markets these prices would naturally arrive at the lowest possible price all on their own. You are right that this policy is very simple, it's very clear both mathematically and logically. Companies cannot lower their prices lower than their costs. If costs are variable across platforms but prices are fixed to a single value than this will de-facto result in INCREASED prices. If this policy causes someone to leave a platform, that STILL doesn't result in prices any lower than they would absent the rule. In fact, the sheer existence of the rule is a clear statement from Amazon that they believe they have significant and durable market pricing power, since if they didn't, this policy would clearly lead to sellers and buyers leaving their platform.
- dwallin 3y agoIt's not pro-consumer in any way. If the seller can profitably list it for a given price on a given platform, competition will almost certainly drive their price down to that level. The only time a policy like this becomes significant is if another platform, or the sellers own platform, can offer the product for cheaper than Amazon (eg. maybe they can ship straight from the factory), in which case this policy would force them to raise their prices, while simultaneously removing potential competitive pressure on Amazon.
- endisneigh 3y agoYour assumption here is that they have to sell on Amazon to begin with, which they do not. There are plenty of products that you cannot buy on Amazon, so your entire post is ridiculous as it shows again, you don't need Amazon to succeed to begin with.
- dwallin 3y agoYou are a seller. Amazon makes up 40% of your sales. You have your own first party website where you can profitably offer your product for 5% less and still make an additional 10% profit but it only makes up 5% of your sales currently. What's your move in this position? You can't just imagine all companies as perfect frictionless spherical interchangeable cows. In reality companies as large as Amazon can have significant market distorting effect, while much smaller companies might have to choose between their principles and going out of business.
- endisneigh 3y agoYou can lower the product for 5% on both your site and on Amazon. Since Amazon makes up the plurality of your sales you gain more sales both there and on your site. Everyone wins except for you, and such is the life of race-to-the-bottom e-commerce sales. What I'm describing is already what happens, by the way. Look at Anker for an example.
- Jensson 3y ago
- wallaBBB 3y agoYou can repeat that comment here as many times as you want but it will not make it a valid one. Amazon is practically a monopoly, and they have reached that position by often selling goods below COG prices, incurring losses but outliving the competition. Now without a competitive marketplace for quite a lot of stuff they can dictate the prices at a loss for everyone except them. If somebody was to challenge them with lower prices they can just repeat the cycle. They simply do not have proper competition for a lot of stuff and they are abusing it.
- endisneigh 3y agoAmazon isn't a monopoly by any definition. There are plenty of places to buy things. Repeating it over and over again won't change reality. Feel free to bookmark this and come back to it 10 years from now. Amazon won't be broken up, either. Customers are so lazy they want the government do everything for them. If you don't like Amazon, close the tab and go to eBay.com or Walmart.com. It's very easy, and can be done in seconds. This isn't like telecom monopolies where you can't actually switch.
- Jensson 3y agoFor b2c monopolies matters, for b2b it is enough to be a dominant player to engage on a lot of harmful anti-competitive practices. This is a b2b situation that harms consumers, in that situation it doesn't matter that there are competitors, what matters is how much power Amazon has over vendors.
- endisneigh 3y agoI disagree. Demanding the lowest price does not harm consumers. Overstock, Wayfair, Walmart and others do the same thing. The result is the lowest price for a given product on all sites. This is unquestionably good for consumers.
- Jensson 3y agoMost disagrees with you here, including those who makes the laws and the courts.
- locallost 3y agoIt's pro consumer to pay more than you would've because one company in an allegedly free market decides what the price is allowed to be.
- proamdev123 3y ago> It is none of Amazons business what prices they put when they list their wares on other services… It is literally Amazon’s business to offer pricing at equal to or better than their competitors. > …the only reason they care is that they want to crush the competition. Every company wants to beat their competition, and many (most?) want to “crush” their competition. Don’t you think Target wants to crush Amazon? Don’t you think Google wants to crush Apple in smartphone sales? Don’t you think a local retailer would love to crush Amazon for products in their niche? The only question here is whether Amazon is doing this in an abusive way and/or a way that negatively impacts consumers. We’ll find out in the trial…
- LunaSea 3y ago> It is literally Amazon’s business to offer pricing at equal to or better than their competitors. For their own products they can. For third-party items, Amazon is free to lower their margin.
- jasonjayr 3y agoOverstock & Wayfair scan + compare identical & similar listings at Amazon and other sites, and will message sellers if their price is not the better price. It's annoyingly a pretty standard practice. And they will see through the "different SKU" trick simply by comparing the product images.
- gbear605 3y agoIsn’t the solution to just ban all of the companies from doing it? More companies than just Amazon can be anti-competitive.
- gorbypark 3y agoI think that's a good solution in this case (ban it for everyone), but remember that there are different rules for companies who are found to have monopolies in a specific market. Something a monopolist does could be illegal while being completely legal for their competitors (who don't have a monopoly).
- EGreg 3y agoTo be fair, every single wholesaler operates this way. I have personalky spoken to wholesalers who sell widgets X (lighters etc) to retail stores. If the retail stores undercut everyone else and drop the price below MSRP, they will exclude them in the future. There is centralized price control even though the retailers are free to do what they want. That is done by auto dealers and anyone else who does MSRP. The difference is that they are still competing in that product category. Amazon on the other hand is a platform that stands BEHIND them. This leads to an emergent price cartel, just like in the propu lica piece on NYC real estate: https://magarshak.com/blog/?p=385 https://magarshak.com/blog/?p=385
- oogali 3y agoTo shine a little more light, what you're referring to is called a minimum advertised price policy, or MAPP. And as you've stated, it's done by anyone who publishes a MSRP. https://www.deltafaucet.com/for-professionals/product-resources/sales--map-policies https://www.deltafaucet.com/for-professionals/product-resour... https://assets.ctfassets.net/zlhl2y58oyef/3wENIXr7qvqyOoVD6RfD6d/f066dfc867711a183ac5afe2de40b1e9/April_2023_Notification_of_Price_Reduction_of_Air-Cooled_Residential_Generators___ATS.pdf https://assets.ctfassets.net/zlhl2y58oyef/3wENIXr7qvqyOoVD6R... https://www.pricespider.com/Blog/map-policy-faqs/ https://www.pricespider.com/Blog/map-policy-faqs/
- sib 3y agoIt's exactly their business. Amazon is going to use the limited "shelf space" to promote and highlight those products which are most likely to sell (and to generate best margins). If a product is for sale for less elsewhere, it's less likely to do so, so why should Amazon waste the "shelf space"? This is no different than what non-e-commerce stores (such as Walmart) have been doing for years.
- Retric 3y agoAmazon doesn’t need to promote every single item they sell and it would be meaningless for them to do so. They have a long tail of items which rarely sell and only show up on very specific queries disproving any kind of limited shelf space argument. As a simple practical manner a small manufacturer can more cheaply sell products at their factory than the overhead of selling through Amazon or anywhere else. You often see this where mid sized brewery offers beer kegs more cheaply on location. Amazon’s policy simply increases prices without any benefit to consumers or the overall economy.