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I’ve heard that Walmart and Amazon also use various unethical means to scrape the websites of competitors to get pricing information and adjust their own items’

I’ve heard that Walmart and Amazon also use various unethical means to scrape the websites of competitors to get pricing information and adjust their own items’ pricing accordingly. This feels a lot like the algorithmic price fixing that is now being scrutinized in the rental industry. I wonder if more attention should be paid to how these companies compete with each other, leaving aside the numerous other controversies around how they treat sellers, how they abuse sales data of manufacturers to compete with them with house brands, and their plain market power from size.

mistrial9 3y ago
small business retail in the San Francisco Bay Area has all but disappeared, it seems.. it apparently split during covid-19 lockdown into two -- "mega corporates" and "we just steal it and sell it at the local casual street market" .. with most things in between closing shop.. to be more complete, liquor stores with some retail items, and gas station chain stores still exist ..
- simfree 3y ago
  Only the businesses that did sufficent volume and had sufficient margins to cover the ever increasing cost of rent, loss of products due to theft, and vandalism have stayed open. The retail shakeout has been brutal in the urban core of Portland and Seattle as well, anywhere where there isn't nearby housing to create a walk shed that would allow smaller businesses to survive has seen something of a retail apocalypse. Single purpose office or commercial neighborhoods just aren't viable anymore, you need a critical mass of local customers adjacent your retail business for it to survive.
mattmaroon 3y ago
What’s unethical about scraping data from a public website?
- blackeyeblitzar 3y ago
  Rather than organically pricing their products, these bigger companies are setting prices to always match or undercut pricing elsewhere. This squeezes the advantage smaller players may have on pricing, and big players can afford to do so even at a loss. Another issue is that the bigger players may be essentially signaling their pricing to each other through their scraping, which can be a form of collusion and price fixing - this is what’s under scrutiny in the rental market where software is performing actions that would be anti-competitive for a human to do.
  - c_o_n_v_e_x 3y ago
    >these bigger companies are setting prices to always match or undercut pricing elsewhere. This squeezes the advantage smaller players may have on pricing, and big players can afford to do so even at a loss. That sounds like a win for the consumer >This squeezes the advantage smaller players may have on pricing Small players competing on price alone with Walmart or Amazon is suicidal. Offering something other than low price is a way to compete.
    - thestepafter 3y ago
      Until the small players all close down and then the big players raise prices.
      - mattmaroon 3y ago
        Amazon has been around nearly 30 years and the prices have gotten steadily lower. Longer for Walmart and Target. That’s just a thing people imagine will happen. What actually happens is the big players just competing on price against each other forever.
    - mattmaroon 3y ago
      In retail the small companies have never successfully competed on price.
    - avidiax 3y ago
      > That sounds like a win for the consumer Let's say that you have a comparative advantage against Amazon. A company went bankrupt and you bought the remaining inventory of lawn darts at a fire sale price. Now you try to sell your lawn darts at 90% of the Amazon price. And they lower their price to match or be below yours. And this continues. And pretty soon you have to sell your lawn darts at the price you bought them for, and even that isn't really moving them. Sure, Amazon is taking a loss on lawn darts. But they've also squashed you, preventing you from specializing in outdoor equipment and building comparative advantage against Amazon. You go out of business, and Amazon's scraper see's no price data so they go back to a default price of cost+100%. And all of this without a human in the loop at Amazon. They just matched your price, and let the network effect they have do the rest to completely drain your customer flow.
Ekaros 3y ago
Scrapping information from other players is actually a good thing. That is how actual free market operates. One where at least some have full knowledge. Competitive pricing based on supply and demand can work in this and likely does not hurt consumers. The algorithmic pricing in rental markets failed because they were not competitive. They were in essence cartel. But Walmart and Amazon surely are there to under-cut each other so it is not same issue.

mistrial9 3y ago

small business retail in the San Francisco Bay Area has all but disappeared, it seems.. it apparently split during covid-19 lockdown into two -- "mega corporates" and "we just steal it and sell it at the local casual street market" .. with most things in between closing shop.. to be more complete, liquor stores with some retail items, and gas station chain stores still exist ..

simfree 3y ago
Only the businesses that did sufficent volume and had sufficient margins to cover the ever increasing cost of rent, loss of products due to theft, and vandalism have stayed open. The retail shakeout has been brutal in the urban core of Portland and Seattle as well, anywhere where there isn't nearby housing to create a walk shed that would allow smaller businesses to survive has seen something of a retail apocalypse. Single purpose office or commercial neighborhoods just aren't viable anymore, you need a critical mass of local customers adjacent your retail business for it to survive.

mattmaroon 3y ago

What’s unethical about scraping data from a public website?

blackeyeblitzar 3y ago
Rather than organically pricing their products, these bigger companies are setting prices to always match or undercut pricing elsewhere. This squeezes the advantage smaller players may have on pricing, and big players can afford to do so even at a loss. Another issue is that the bigger players may be essentially signaling their pricing to each other through their scraping, which can be a form of collusion and price fixing - this is what’s under scrutiny in the rental market where software is performing actions that would be anti-competitive for a human to do.
- c_o_n_v_e_x 3y ago
  >these bigger companies are setting prices to always match or undercut pricing elsewhere. This squeezes the advantage smaller players may have on pricing, and big players can afford to do so even at a loss. That sounds like a win for the consumer >This squeezes the advantage smaller players may have on pricing Small players competing on price alone with Walmart or Amazon is suicidal. Offering something other than low price is a way to compete.
  - thestepafter 3y ago
    Until the small players all close down and then the big players raise prices.
    - mattmaroon 3y ago
      Amazon has been around nearly 30 years and the prices have gotten steadily lower. Longer for Walmart and Target. That’s just a thing people imagine will happen. What actually happens is the big players just competing on price against each other forever.
  - mattmaroon 3y ago
    In retail the small companies have never successfully competed on price.
  - avidiax 3y ago
    > That sounds like a win for the consumer Let's say that you have a comparative advantage against Amazon. A company went bankrupt and you bought the remaining inventory of lawn darts at a fire sale price. Now you try to sell your lawn darts at 90% of the Amazon price. And they lower their price to match or be below yours. And this continues. And pretty soon you have to sell your lawn darts at the price you bought them for, and even that isn't really moving them. Sure, Amazon is taking a loss on lawn darts. But they've also squashed you, preventing you from specializing in outdoor equipment and building comparative advantage against Amazon. You go out of business, and Amazon's scraper see's no price data so they go back to a default price of cost+100%. And all of this without a human in the loop at Amazon. They just matched your price, and let the network effect they have do the rest to completely drain your customer flow.

Ekaros 3y ago

Scrapping information from other players is actually a good thing. That is how actual free market operates. One where at least some have full knowledge. Competitive pricing based on supply and demand can work in this and likely does not hurt consumers. The algorithmic pricing in rental markets failed because they were not competitive. They were in essence cartel. But Walmart and Amazon surely are there to under-cut each other so it is not same issue.