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You’re just wrong, Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers. The sec

You’re just wrong, Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers. The second largest is Walmart and it’s closer to 7%. Walmart, target, whatever, don’t add up to Amazons market.

endisneigh 3y ago
> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin? Sellers should stop using Amazon if they don't like their policies, and the issues will correct themselves.
- imchillyb 3y ago
  Or, hear me out here, The Federal Trade Commission orders a study done and the study corroborates the general sentiment here that Amazon is abusing their power in the marketplace. So, the FTC then sues Amazon. Your 'feelings' about how this works only matters to you. The US branch of oversight for trade has declared (with a lawsuit) that this behavior is unconscionable and either is or will be illegal by the time this suit is finished. You're welcome to dispute the FTC and the crowd here on HN, but you need to provide some sort of data to back up your claim of: Sellers should just stop using Amazon...the issues will correct themselves. The FTC's suit alleges the exact opposite of what you allege. The FTC states that there is harm to the entire economy if Amazon is allowed to continue this practice. Please cite the studies, data, or metrics you used to claim '...will correct themselves." Thanks @endisneigh.
  - bryan_w 3y ago
    > The Federal Trade Commission orders a study done > the study corroborates the general sentiment Seems fishy ... Good thing that even corporations like Amazon get a day in court.
- kube-system 3y ago
  The math absolutely does check out, lets say, for an addressable market of 100k purchasers: (and I'll be generous and I'll pretend Walmart has zero fees) Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000 Walmart: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $8,400 And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $29,400 See the issue? The problem is that one seller on Amazon moving to another platform won't change the fact that Amazon has the majority market share. That's how market momentum works and it's why we have antitrust laws. Even with exorbitant fees, they are still where sellers need to be. And they are using this market share to force sellers into overpricing on other platforms so that they maintain this unfair position.
  - jjk166 3y ago
    Walmart is not all-non amazon customers. If Amazon's market share is 35%, then the non-amazon customers comprise the other 65% (which, being greater than 50%, constitutes "most"). Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000 Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 65%) = $78,000 If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share. Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.
    - kube-system 3y ago
      There are two reasons why that 65% number is wildly unrealistic: 1. We're ignoring fixed costs associated with onboarding with an ecommerce platform. Selling on one website has significantly lower fixed costs than it is to sell on every ecommerce site on the internet minus one. We're talking thousands upon thousands of retailers, not a handful. If what you were thinking is that they could sell across the next 5 to 10 most popular ecommerce marketplaces, you're somewhere between 15% and 20% marketshare. A more realistic number for that strategy is: Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 17%) = $20,400 https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-commerce/ https://www.statista.com/statistics/274255/market-share-of-t... 2. Not all ecommerce sites represented in that 65% permit third party sellers. You can't just sign up and sell your stuff. You may have to convince their buyers to stock your product. This is not easy or cheap.
- mecha_ghidorah 3y ago
  > Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. This is a problem in terms of organisation. If lots of people stop selling on Amazon this would be true. The problem is individually each seller is motivated to deal with Amazon so long as lots of other sellers are. A mass exodus from Amazon would in short order make the Amazon store far less relevant, but nobody wants to leave before everyone else is doing it because until then it costs them
sib 3y ago
And if lots of items became available on other sites, but not Amazon (as per the theory being propounded), then Amazon would no longer control 35% of all US e-commerce.
- neilparikh 3y ago
  This is a classic coordination problem: you need all the sellers to leave together so that individual merchants don't take a loss. And coordination problems like this are one of the main areas government action can help!
  - AlanYx 3y ago
    Also, I'd imagine that coordination would probably leave them vulnerable to their own set of anticompetitive allegations (i.e., some variant of cartel behavior/price-fixing). To the extent anyone acts, it would probably have to be government.
SoftTalker 3y ago
There are companies that do not sell on Amazon. I seek them out. They will tell you that if their product appears on Amazon, it's counterfeit. It's probably an impossiblity if your business model is selling cheap imported Chinese garbage at a profit, but that's the businesess you chose. Others have chosen to sell quality items on their own terms. Those are the businesses I want to reward.
scarface_74 3y ago
And how much of the stuff that these sellers are just cheap Chinese crap that they wouldn’t be able to sell at all if Amazon didn’t exist?

endisneigh 3y ago

> Amazon controls around 35% of all US e-commerce. Not being able to sell on Amazon instantly removes most of your available customers Math doesn't check out. Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. How exactly is making everyone sell on Amazon going to solve anythin? Sellers should stop using Amazon if they don't like their policies, and the issues will correct themselves.

imchillyb 3y ago
Or, hear me out here, The Federal Trade Commission orders a study done and the study corroborates the general sentiment here that Amazon is abusing their power in the marketplace. So, the FTC then sues Amazon. Your 'feelings' about how this works only matters to you. The US branch of oversight for trade has declared (with a lawsuit) that this behavior is unconscionable and either is or will be illegal by the time this suit is finished. You're welcome to dispute the FTC and the crowd here on HN, but you need to provide some sort of data to back up your claim of: Sellers should just stop using Amazon...the issues will correct themselves. The FTC's suit alleges the exact opposite of what you allege. The FTC states that there is harm to the entire economy if Amazon is allowed to continue this practice. Please cite the studies, data, or metrics you used to claim '...will correct themselves." Thanks @endisneigh.
- bryan_w 3y ago
  > The Federal Trade Commission orders a study done > the study corroborates the general sentiment Seems fishy ... Good thing that even corporations like Amazon get a day in court.
kube-system 3y ago
The math absolutely does check out, lets say, for an addressable market of 100k purchasers: (and I'll be generous and I'll pretend Walmart has zero fees) Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000 Walmart: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $8,400 And even if they price the same on Walmart as they would on Amazon: ($5 selling price - $0 fees - 0.80 COGS) * (100k * 7%) = $29,400 See the issue? The problem is that one seller on Amazon moving to another platform won't change the fact that Amazon has the majority market share. That's how market momentum works and it's why we have antitrust laws. Even with exorbitant fees, they are still where sellers need to be. And they are using this market share to force sellers into overpricing on other platforms so that they maintain this unfair position.
- jjk166 3y ago
  Walmart is not all-non amazon customers. If Amazon's market share is 35%, then the non-amazon customers comprise the other 65% (which, being greater than 50%, constitutes "most"). Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000 Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 65%) = $78,000 If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share. Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.
  - kube-system 3y ago
    There are two reasons why that 65% number is wildly unrealistic: 1. We're ignoring fixed costs associated with onboarding with an ecommerce platform. Selling on one website has significantly lower fixed costs than it is to sell on every ecommerce site on the internet minus one. We're talking thousands upon thousands of retailers, not a handful. If what you were thinking is that they could sell across the next 5 to 10 most popular ecommerce marketplaces, you're somewhere between 15% and 20% marketshare. A more realistic number for that strategy is: Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 17%) = $20,400 https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-commerce/ https://www.statista.com/statistics/274255/market-share-of-t... 2. Not all ecommerce sites represented in that 65% permit third party sellers. You can't just sign up and sell your stuff. You may have to convince their buyers to stock your product. This is not easy or cheap.
mecha_ghidorah 3y ago
> Not to mention that if sellers stopped selling on Amazon they wouldn't control so much. This is a problem in terms of organisation. If lots of people stop selling on Amazon this would be true. The problem is individually each seller is motivated to deal with Amazon so long as lots of other sellers are. A mass exodus from Amazon would in short order make the Amazon store far less relevant, but nobody wants to leave before everyone else is doing it because until then it costs them

sib 3y ago

And if lots of items became available on other sites, but not Amazon (as per the theory being propounded), then Amazon would no longer control 35% of all US e-commerce.

neilparikh 3y ago
This is a classic coordination problem: you need all the sellers to leave together so that individual merchants don't take a loss. And coordination problems like this are one of the main areas government action can help!
- AlanYx 3y ago
  Also, I'd imagine that coordination would probably leave them vulnerable to their own set of anticompetitive allegations (i.e., some variant of cartel behavior/price-fixing). To the extent anyone acts, it would probably have to be government.

SoftTalker 3y ago

There are companies that do not sell on Amazon. I seek them out. They will tell you that if their product appears on Amazon, it's counterfeit. It's probably an impossiblity if your business model is selling cheap imported Chinese garbage at a profit, but that's the businesess you chose. Others have chosen to sell quality items on their own terms. Those are the businesses I want to reward.

scarface_74 3y ago

And how much of the stuff that these sellers are just cheap Chinese crap that they wouldn’t be able to sell at all if Amazon didn’t exist?