5 ms·

If amazon overcharges sellers of a 40% fee, then why can’t I get the same object elsewhere cheaper? Obviously if you remove from your mind all market mechanism

by ttoinou 11mo ago

If amazon overcharges sellers of a 40% fee, then why can’t I get the same object elsewhere cheaper? Obviously if you remove from your mind all market mechanisms, then it doesn’t look like a market anymore

nephihaha 11mo ago
Depends what you are buying. In some cases you can buy it elsewhere and in other cases, Amazon may be the only option left.
- ttoinou 11mo ago
  Chinese stuff you can find it cheaper elsewhere most of the time. For the rest, amazon is still cheaper, faster to deliver and easier to return
  - bushbaba 11mo ago
    Yes, but not with the same shipping speed. Often temu/aliexpress requires you to wait week(s).
  - nephihaha 11mo ago
    I wasn't thinking of Chinese goods. Their labour laws and prison camps are even more questionable.
    - red-iron-pine 11mo ago
      amazon is just a middleman for the chinese goods. your objections apply to a fantastic number of amazon sellers.
postexitus 11mo ago
Amazon enforces a Most Favored Nation (MFN) condition on sellers, basically implying that they cannot sell the same product elsewhere for cheaper. Funny enough - when Amazon pushes their fees higher, it means the prices go up everywhere, that's Amazon inflation. https://www.proskauer.com/blog/amazons-most-favored-nations-policies-scrutinized-under-sherman-act https://www.proskauer.com/blog/amazons-most-favored-nations-...
- Imustaskforhelp 11mo ago
  so does this go for companies which sell electronics like phone companies etc. or since I think resellers sell it on amazon, maybe we don't have MFN condition? But like, my question is, Doesn't this cripple every company which sells electronics on amazon or something? I think amazon tries doing it to say that you would only get the best price here, thus people might buy from amazon which can then increase the sales making retailers believe they need to be on amazon agreeing to MFN policy and then crippling their custom market too I suppose Are there any loopholes to this? What if I am a seller and then I can have lets say my book be on amazon for 100 bucks as an example and I can create a website where I sell it for 110$ But when someone signs up they can get a voucher for 20$ and then they can apply it for what I am selling which for them becomes 90$ I think amazon's MFN is monopolistic especially for things like books which is what amazon first was created for. I kinda wish if there was a service where I can buy one time right to publish a book from the authors directly for like the books price and then be able to download it or print it from local competing printing/tech service shops..
  - postexitus 11mo ago
    It does cripple them, but only those Amazon can strong arm. There are some companies that refuse to sell on Amazon for this very reason - one example I know is Jellycats. MFN applies at reseller level - not at product level (obviously). Yes, it is monopolistic - some call it technofeudalism, because Amazon owns the "land" and extract land rent out of it - with questionable service in return.
    - seec 11mo ago
      That's nonsense. People actually choose to use Amazon because their service is impeccable. The argument about Amazon requiring cheaper prices is true in theory but in practice not strongly enforced. I just bought a kettle on Amazon instead of from another seller who had it 2 euros cheaper because I combined the purchase with other stuff that the seller didn't have. I have readily told people that some items they were buying could be found for cheaper on AliExpress, but they didn't care because they wanted the convenience and fast service. By the way, many of Amazon's suppliers sell the same product cheaper on AliExpress and other marketplaces; that completely kills the argument in the first place. Amazon is successful because other companies were complacent and ignored the upcoming internet economy. Amazon built a very complex logistic system that took a very long time and a lot of investment to build. Now that they dominate, the lazy competitors cry about monopoly. In my country (France), the traditional supermarkets are just about now coming in with alternatives to compete, and they are very far off the mark for both service/selection and often price as well…
a2128 11mo ago
It's certainly not the case that you can just buy something outside of Amazon and it'll magically be 40% cheaper. For a long time Amazon pursued aggressive strategies to drive out competition and physical stores, leaving Amazon the most convenient or sometimes the only option. Having built an extremely strong position, they can now increase prices and fees, and leverage power over sellers to stop them from listing lower prices off-Amazon, if they want to also sell on Amazon. See page 42 of https://web.archive.org/oag.ca.gov/system/files/attachments/press-docs/2022-09-14%20Redacted-California%20v.%20Amazon%20Complaint.pdf https://web.archive.org/oag.ca.gov/system/files/attachments/... for an example of this
- ttoinou 11mo ago
  So, a competitor could also invest a lot, drive out competition, be the most convenient, build themselves an extremely strong position then reap the rewards ? This strategy can be replicated, thus is subject to market forces
  - a2128 11mo ago
    The market today is extremely different to what the market looked like at the time Amazon worked their strategy, it was dominated mainly by physical retailers that may have required a long drive, things were not always stocked, limited choice on what's stocked on shelves. And ordering over a phone from paper catalogs had long delivery times and limited information beyond just a picture and short description. Amazon disrupted the industry by changing all of this and becoming the first major online retailer. You won't be able to just replicate their strategy, and they've spent ridiculous amounts of money on next-day/same-day delivery infrastructure that nobody's gonna be able to invest that much. But if you do have any ideas on how to disrupt Amazon and be more convenient than them in 2025 let me know :)
    - ttoinou 11mo ago
      So they worked a lot to get to the position here and no one else wants to make the same efforts. There's no easy play here

by ttoinou 11mo ago

nephihaha 11mo ago

Depends what you are buying. In some cases you can buy it elsewhere and in other cases, Amazon may be the only option left.

ttoinou 11mo ago
Chinese stuff you can find it cheaper elsewhere most of the time. For the rest, amazon is still cheaper, faster to deliver and easier to return
- bushbaba 11mo ago
  Yes, but not with the same shipping speed. Often temu/aliexpress requires you to wait week(s).
- nephihaha 11mo ago
  I wasn't thinking of Chinese goods. Their labour laws and prison camps are even more questionable.
  - red-iron-pine 11mo ago
    amazon is just a middleman for the chinese goods. your objections apply to a fantastic number of amazon sellers.

postexitus 11mo ago

Amazon enforces a Most Favored Nation (MFN) condition on sellers, basically implying that they cannot sell the same product elsewhere for cheaper. Funny enough - when Amazon pushes their fees higher, it means the prices go up everywhere, that's Amazon inflation. https://www.proskauer.com/blog/amazons-most-favored-nations-policies-scrutinized-under-sherman-act https://www.proskauer.com/blog/amazons-most-favored-nations-...

Imustaskforhelp 11mo ago
so does this go for companies which sell electronics like phone companies etc. or since I think resellers sell it on amazon, maybe we don't have MFN condition? But like, my question is, Doesn't this cripple every company which sells electronics on amazon or something? I think amazon tries doing it to say that you would only get the best price here, thus people might buy from amazon which can then increase the sales making retailers believe they need to be on amazon agreeing to MFN policy and then crippling their custom market too I suppose Are there any loopholes to this? What if I am a seller and then I can have lets say my book be on amazon for 100 bucks as an example and I can create a website where I sell it for 110$ But when someone signs up they can get a voucher for 20$ and then they can apply it for what I am selling which for them becomes 90$ I think amazon's MFN is monopolistic especially for things like books which is what amazon first was created for. I kinda wish if there was a service where I can buy one time right to publish a book from the authors directly for like the books price and then be able to download it or print it from local competing printing/tech service shops..
- postexitus 11mo ago
  It does cripple them, but only those Amazon can strong arm. There are some companies that refuse to sell on Amazon for this very reason - one example I know is Jellycats. MFN applies at reseller level - not at product level (obviously). Yes, it is monopolistic - some call it technofeudalism, because Amazon owns the "land" and extract land rent out of it - with questionable service in return.
  - seec 11mo ago
    That's nonsense. People actually choose to use Amazon because their service is impeccable. The argument about Amazon requiring cheaper prices is true in theory but in practice not strongly enforced. I just bought a kettle on Amazon instead of from another seller who had it 2 euros cheaper because I combined the purchase with other stuff that the seller didn't have. I have readily told people that some items they were buying could be found for cheaper on AliExpress, but they didn't care because they wanted the convenience and fast service. By the way, many of Amazon's suppliers sell the same product cheaper on AliExpress and other marketplaces; that completely kills the argument in the first place. Amazon is successful because other companies were complacent and ignored the upcoming internet economy. Amazon built a very complex logistic system that took a very long time and a lot of investment to build. Now that they dominate, the lazy competitors cry about monopoly. In my country (France), the traditional supermarkets are just about now coming in with alternatives to compete, and they are very far off the mark for both service/selection and often price as well…

a2128 11mo ago

It's certainly not the case that you can just buy something outside of Amazon and it'll magically be 40% cheaper. For a long time Amazon pursued aggressive strategies to drive out competition and physical stores, leaving Amazon the most convenient or sometimes the only option. Having built an extremely strong position, they can now increase prices and fees, and leverage power over sellers to stop them from listing lower prices off-Amazon, if they want to also sell on Amazon. See page 42 of https://web.archive.org/oag.ca.gov/system/files/attachments/press-docs/2022-09-14%20Redacted-California%20v.%20Amazon%20Complaint.pdf https://web.archive.org/oag.ca.gov/system/files/attachments/... for an example of this

ttoinou 11mo ago
So, a competitor could also invest a lot, drive out competition, be the most convenient, build themselves an extremely strong position then reap the rewards ? This strategy can be replicated, thus is subject to market forces
- a2128 11mo ago
  The market today is extremely different to what the market looked like at the time Amazon worked their strategy, it was dominated mainly by physical retailers that may have required a long drive, things were not always stocked, limited choice on what's stocked on shelves. And ordering over a phone from paper catalogs had long delivery times and limited information beyond just a picture and short description. Amazon disrupted the industry by changing all of this and becoming the first major online retailer. You won't be able to just replicate their strategy, and they've spent ridiculous amounts of money on next-day/same-day delivery infrastructure that nobody's gonna be able to invest that much. But if you do have any ideas on how to disrupt Amazon and be more convenient than them in 2025 let me know :)
  - ttoinou 11mo ago
    So they worked a lot to get to the position here and no one else wants to make the same efforts. There's no easy play here