4 ms·
There's still a lot of value for pricing intelligence (see current #3 post talking about Amazon's Fulfillment-By-Amazon product) in arbitrage. The "shipped by a
by meritt 13y ago
There's still a lot of value for pricing intelligence (see current #3 post talking about Amazon's Fulfillment-By-Amazon product) in arbitrage. The "shipped by amazon" has an immense amount of weight. It's pretty straightforward to acquire products (even from amazon 3rd party sellers), relist on amazon with FBA/prime/etc logos and profit.
Although Amazon has started it to do it themselves directly via "Amazon Warehouse Deals" -- http://www.amazon.com/b?node=1267877011 http://www.amazon.com/b?node=1267877011 -- They'll actually purchase other seller's underpriced inventory and relist it themselves for a tidy profit. Especially easy when it's sitting in their warehouse already in a box.
- thaumasiotes 13y agoThis is a great "anecdote" (I don't have a better word...). It's easy to imagine someone finding cheap goods, setting himself up with fulfillment by amazon, and setting a price, and then Amazon deciding his price is wrong, buying his stuff, and relisting it (after all, it's already catalogued in their warehouse) themselves. I don't think anyone thinks such behavior would be morally alarming... but that's certainly a common perspective when it comes to high-frequency stock trading. What makes the difference?
- meric 13y agoI doubt the seller would mind. Amazon could have not bought it and let the seller hold onto the inventory longer. Amazon buying it from the seller brings the seller profit from future to now.
- thaumasiotes 13y agoI don't understand how I provoked this response, but just for the record, I agree with the entire text of your comment?
- meric 13y agoI agreed with your comment and further elaborated why "I don't think anyone thinks such behavior would be morally alarming".
- wtracy 13y ago1. Normal people don't have access to HFT equipment, giving a handful of corporations an edge over the rest of us. 2. Most people really don't understand HFT. I think #2 is actually the real reason people are up in arms about HFT, honestly. It's new, scary, and allows corporations to extract money seemingly from nowhere.
- thaumasiotes 13y agoI'm with you on the reasoning, but I hate the logic of 1. I don't understand phenomenon X Therefore, 2. Phenomenon X must be stopped To your point #1 in particular, it's true that normal people don't have access to HFT equipment, but they also don't own warehouses full of third-party goods (and would find those probably more difficult to obtain), so it's hard to explain in those terms why Amazon's hypothetical maneuver is different from HFT.
- caf 13y agoI think the "extract money seemingly from nowhere" might be the operative part here - one thing that almost everyone shares is an instinctive understanding that money does not come from nowhere. In the absence of further information, many will be suspicious that it's probably coming from themselves.