About 10 years ago I met the head of IT for B&H cameras in NYC. Among many things, he was in charge of the hosting for their online store. After he complained about dealing with physical servers, I asked him if he had ever considered using AWS ec2 for the website, and he replied that his boss refused because he believed that Amazon would pull data on B&H products and use it to compete more effectively.
I'm not sure that Amazon would be able to pierce the veil of the hypervisor like that, but his instincts were in the correct direction.
This is the exact reason why Shopify grew rapidly. Sellers knew they needed a platform where they own the data and could abstract the operations outside of Amazon seller dashboard.
People also forget that Amazon doesn't have to pay to advertise its own products, but 3rd party sellers do. This immediately puts you at a disadvantage if you want your product at the top since you pay seller commission and advertising fees to Amazon. Next time you want to buy something from Amazon, I would encourage you to find the seller's website directly or find them on eBay. eBay charges less seller fees and is not in the business of selling products directly.
With Shopify you don't pay ~20% sales commission to Amazon per se, but you sure as heck will end up paying for that if not more to Facebook.
Where by FB has no direct incentive, yet. It could be a FB Marketplace PM team someone has already copied Shopify outright and is just waiting for the right time to roll that out to all FB user worldwide.
With Amazon Marketplace the strategy has always been to convert customers off that platform into your own.
Most top listings in most niches/categories are priced for break even inclusive of the multitudes of keyword PPC campaigns they're running with the hope that you leave a review and that you actually pay attention to the little postcard that comes inside the package asking you to register your email address.
> Next time you want to buy something from Amazon, I would encourage you to find the seller's website directly or find them on eBay. eBay charges less seller fees and is not in the business of selling products directly.
Last time I bought an item off eBay, it arrived shipped via Amazon Prime. Pretty sure the seller just bought it off Amazon and shipped it to my house... it was a weird turn of events.
It wasn't a branded item, just a third-party battery replacement for a cordless phone, but still.
shopify is collecting a lot of data for all web interactions in their customer's websites. What it does with this info, is anyone's guess. There was a pretty explosive article a few days ago in HN.
Shopify may not be amazon yet, but it is certainly learning to be that way.
So many comments about, "doesn't everyone know they do this?", and "everyone does this!"
I say there should be an explicit difference between "running a platform", and "selling on a platform", and never should the two meet. By "platform" here, and in the context of selling stuff online or IRL, I mainly mean that the store should never compete with their suppliers ... it's madness and unethical. If everyone can get a piece of the pie, it makes for a healthier ecosystem. We should want the rising tide to lift more than one boat.
And yes, I believe this should be regulated at the policy level.
This of course has implications for other forms of "platforms", such as operating systems, APIs, and clouds; but I'll leave those discussions for another time ;)
I saw this happening a decade ago, but I had no real proof.
I had a profitable Amazon store in 2010. I found niche products that Amazon didn't sell. As soon as I started getting traction on any one product, Amazon would start undercutting me, and my sales would drop to almost zero over the course of a couple of weeks.
I had near 100% feedback and I had a single customer complaint that I sold them the wrong product. Within a few minutes of me receiving this claim, my account was suspended. I had no chance to rectify the situation.
No amount of calling or emailing Amazon could get me in front of someone that could help me. All responses were an automated rejection.
This was a rough time for me as it was my only form of income and Amazon held almost $30,000 of my money for 3 months. I ended up having to close my business and move on, though I did eventually get all of my money back.
I've built multiple successful businesses since then and Amazon has recently had many business reps try to get me to sign up with a business account, because we purchase lots of items on Amazon/month. I always try to get them to re-investigate my old seller account and our email correspondence stops shortly after this. It's crazy to me that after 10 years and in a completely different industry, I still can't open a seller account.
It taught me a valuable lesson not to build my entire business on someone else's platform.
It only gives them more control over you and they will most likely use your customers, data, and more resources to out-compete you, if you get too big. Twitter has also done this to their app developers.
My wife runs a small business on Etsy and it's just as bad. They make random code changes, which bumps listings up or down and you suddenly have no orders for weeks at a time.
What's even scarier is if a handful of companies run everything we use online. Will I suddenly not be able to get a home loan for a decade because of an account closure?
The solution isn't hoping the free market would solve this with a competing platform. The solution is to create regulations & laws that prevent this behavior.
You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.
Many years ago I worked for a small analytics company bought by Amazon. My job was to analyze and report on the rise and fall of various product sectors on the web. We were in a unique position at the time, with the ability to see what URL's people were visiting. Reports we presented to Bezos, Jason Kilar and team, were used to make acquisition and growth decisions. In one case we found that that toys and plus size women's clothes were the top sellers for ecommerce in the US. They looked at the data and backed out of buying one of the major e-commerce players in toys and instead launched their own toy site / section. It was the beginning of Amazon moving away from Books and Music and into all other products.
The point is that competitive data is what drives decisions for product and segments in all areas of retail and business. Either in house or outside. Gathering that data from within your property is no different than using an outside agent.
You are acting as if they're spying on their customers, when the customers are you and me, not the reseller using their platform/space/warehouse/services.
How come we don't see this kind of angst with other store brand items. I can't imagine these comments being lobbed at Wal-Mart's Great Value, Costco's Kirkland Signature, or Bi-Lo's SE Grocers items.
And private label doesn't mean you have to manufacture anything at all. Sometimes, you will go to the company whose marketshare you are trying to take and they will manufacture the product for you.
What really is the issue? That Amazon is leveraging its success to be successful? It's unfair that Amazon is able to see that a product category is doing well so it invests its own money into manufacturing a product to sell through its site?
Do you really think that if Amazon couldn't use the data from its own site that it wouldn't procure it elsewhere? Before any product is developed there is extensive market research done to get an idea of how much money this product could make.
Anyone can and does do this, why should Amazon be punished that its data collection mechanism is cheaper than others?
>You're either a platform/retailer or you're a manufacturer. You don't get to be both
Ok, done.
Now what are manufacturers supposed to do when Amazon and Walmart start bullying them some other way? You just made shipping their product directly to the customer against the law.
I would disagree, the free market is working just fine. Many brands are no longer selling on Amazon and doing very well.
We don't need laws to restrict one party from taking advantage of another in a deal... it just takes brains and some companies are using theirs to partner with other platforms or sell DTC(Direct To Consumer)
Sounds nice in theory, but deferring to the government for this is how to fuel the lobbyist industry and end up with regulatory capture.
Anyone can host a website, market their product, ship with FedEx/UPS. Preach people do that instead, rather than bow down to our government stamped and approved overlord Amazon.
Stating the obvious I guess. All retailers do this and create their own white-label brands to squeeze profit from well-performing categories.
Target, for instance, is very upfront about it and they have like a gazillion white-label brands that compete in hundreds of categories, which makes it very gray for the customer.
Does anyone really think that any retailer launches a competing product in a category without looking at all their supplier data?
If you want distribution you risk this. The only way to avoid it, it's to do direct to consumer or having a product that is extremely hard to copy.
> Stating the obvious I guess. All retailers do this and create their own white-label brands to squeeze profit from well-performing categories. Target, for instance, is very upfront about it and they have like a gazillion white-label brands that compete in hundreds of categories, which makes it very gray for the customer.
IIRC, many traditional white label brands are actually manufactured by the name brands themselves, and they're part of a strategy to segment the market.
The difference here seems to be that Amazon has been cloning relatively unique products made by smaller companies, while traditional white label brands are fungible commodities made by large players with little differentiation. From the OP:
> Because of the limitations of shelf space, traditional retailers stock far fewer products than Amazon’s hundreds millions of items. Typically, they create private-label products to compete in generic categories such as paper towels, rather than copycat versions of items created by smaller entrepreneurs, private-label executives said.
I really don't think Target is that upfront. How am I supposed to know Mossimo and Goodfellow are Target brands. I do however understand that Kroger groceries are made by the kroger store.
Amazon is a monopolist in several categories. Different rules apply to monopolists than other organizations. A basic constraint is that a monopolist may not use their position of monopoly in one area to give them an advantage in another.
Similarly, Netflix's sometimes odd choices for their deals or for original content production is certainly driven by the performance or certain metrics of previously acquired content.
Does anyone really think that any retailer launches a competing product in a category without looking at all their supplier data?
So, if cars are inevitably becoming computers with wheels, what's going to happen to insurance companies? The major weapon of underwriting is data, and a company like Tesla is going to have a huge advantage in data over external insurance companies.
Is it really a societal good for big companies to control all of this data, or should the data belong to the consumer/owner/user? I suspect it's the latter which gives people the most choice and freedom by fostering the most competition.
This is the same situation that happens on most platform plays.
You can see this in how Salesforce and Shopify are leveraging their platforms to learn what is popular and produce/buy their own products to sell to their customers to capture 100% of the value, rather than 30% of the value of the solution to the customer.
Everyone is arguing as if Amazon is the only retailer here. Yes, they are a platform, but they are one of many.
In fact, many people here contradict their own argument by saying that they are forced to go to other websites or direct to the supplier. Stating as much is tantamount to admitting that the market is functioning correctly.
Amazon is great for some things and bad for other things. If it doesn’t meet your needs, go elsewhere instead of rewarding it with your business and then complaining that it’s too big and powerful because people like yourself keep rewarding it with your business.
This is totally false - the number of retailers who have testified before congress that they don't use seller data to compete against sellers - and then who go ahead and do just that is basically zero.
Additionally, most other retailers actually BUY the third parties products and take the risk of promoting and selling it. On Amazon third parties take the inventory and many other risks and may have to pay amazon to promote their product.
The story here is that amazon has testified it does not do something, has supposedly the "highest ethical principals" - yet goes ahead and does exactly that which it said it doesn't do.
Do that not matter to you from a trust / credibility perspective?
A lot of businesses do this. It's far less risky to copy a successful model than it is to explore the unknown space of products/services and find out what a successful model is, what to price it at, etc.
This is part of the reason systems like the patent system were created for inventions: to encourage people to bother exploring risky unknown spaces to develop inventions by granting them essentially a short term monopoly to harvest their reward which they would then compete against after a time period so society could further benefit from their finding by allowing competition to drive prices down and iterate on those inventions.
Obviously the patent system doesn't really serve this purpose anymore like so many systems that have been sidestepped/bypassed, changed through regulatory capture and corrupted by pure profit seeking behaviors.
It's a little bit different because Amazon claims to be a marketplace at the same time as curating its own specific product offering. It would be kind of like if a mall required all transactions from independent stores in the mall to go thru the malls servers and then the mall started its own product lines to sell based on that data.
Many Amazon sellers only sell on Amazon, or have a large majority of their business sales there. This is equivalent to having insight to almost your entire business.
Most brands at Walmart and other stores are sold many other places.
The key difference between what Amazon does and Costco/Walmart etc does, is that regular retail takes the risk of buying the product to resell, prior to gathering data and considering whether to clone it.
Amazon is able to snoop on all the sales data without any risk.
We sell an ERP catered to distributors and many do sell on Amazon. I’ve always wondered why on earth they would continue to sell on a platform that’s constantly gathering their selling data, or even inventory if they’re going FBA, and eventually try to undercut them if their products sell well.
Their response is usually “I’m making enough money now, why worry about later?” or “our product category is too niche for Amazon to enter.” It seems like that kind of reasoning makes sense for traditional retailers like Costco/Walmart/Macy’s etc., but not Amazon where Amazon virtually has no risk in listing a product.
Amazon makes life so hard for their suppliers it doesn't even surprise me. I once shipped a box of 10 laptops to sell on FBA (retail value ~$10k) and UPS showed the box as delivered, Amazon checked in the units and showed them available for sale on the website. Then 24 hours later all of them got removed saying I sent the inaccurate quantity in the box and none where now available for sale. The laptops disappeared and I had to do an insurance claim with UPS. Amazon's support was horrible and made me never want to sell with them again. Lots of stories like mine on the Amazon subreddit.
So this seems to be getting drowned out a bit; but the core issue here is not that Amazon is creating their own labels to compete with seller's products. It's that they've publicly stated, including to congress, that they don't use non-public, seller specific data to compete with them; and now former employees are claiming that's a lie.
Amazon agrees that, as claimed, this is a problem.
'Amazon said employees using such data to inform private-label decisions in the way the Journal described would violate its policies, and that the company has launched an internal investigation.'
There is going to be a coordinated attack on Amazon ahead of the US presidential election and it will have valid information and misinformation. The WSJ will no doubt be involved.
Question why and when old news is being dredged up. For example, is Amazon any worse than Wal-mart or Oracle or any other number of companies out there? If something is not contemporaneous news, then why is being being used at the point in time you are reading it? What is the motivation of the group pushing that information? Sometimes that is the even bigger story.
I am happy to buy these products over generics because of the higher quality. Batteries, paper shredders, water filters, electronics accessories, household supplies, office products...
every major retailer has store brands, and I fully expect they all use their sales data to inform their generic products business, and all of their suppliers expect that too. As a consumer, I like that Amazon is upfront about what products come from their brand. Good luck browsing through the plumbing and electrical fixtures at Home Depot or Lowes and figuring out what crappy store brand stuff and whats not.
Up front disclaimer: this is my own personal conspiracy theory with no objective proof. I have quite a few pieces of anecdotal evidence to support this, but anecdotal is anecdotal.
Looking through the comments, everyone is talking about Amazon.com purchases, but the much quieter, arguably more valuable move on Amazon's part would be to do this via AWS. If you're running your entire system on AWS, Amazon immediately knows what kind of scale you're currently running. Depending on the type of product, they can pretty easily ballpark what your profit margin is based on your pricing model and all the metrics they have on your application (which is basically everything).
The application of this data could be used for acquisition targets, deciding which products to build into AWS, ongoing competitive analysis when they do build those competing products...
Wow, lots of comments stating that it was common knowledge, but some fact doesn't become common knowledge simply because everyone knows it. Everyone should also know that everyone knows it and know that everyone knows that etc. which only becomes true after the article is published. The situation is materially different - this is illustrated e.g. by the famous 'island with a blue eyed population' puzzle: https://en.wikipedia.org/wiki/Common_knowledge_(logic)
In this case one of consequences could be that previously during negotiations with Amazon suppliers couldn't effectively use the fact that Amazon would scoop them (even if both parties knew that it was true), and now they can.
Oftentimes this is done to circumvent paying patent license fees- for example if a patented component in a BOM would cost 75 cents per unit from the manufacturer, and the in-house team found a way to perform the equivalent function for 15 cents then it would instantly allow your product to undercut the competition. In Amazon's case, all it takes is a query to find high margin items in which knockoffs can be made and self-promoted to eventually outrank sales of the original item.
[+] [-] nateburke|6 years ago|reply
I'm not sure that Amazon would be able to pierce the veil of the hypervisor like that, but his instincts were in the correct direction.
[+] [-] theturtletalks|6 years ago|reply
People also forget that Amazon doesn't have to pay to advertise its own products, but 3rd party sellers do. This immediately puts you at a disadvantage if you want your product at the top since you pay seller commission and advertising fees to Amazon. Next time you want to buy something from Amazon, I would encourage you to find the seller's website directly or find them on eBay. eBay charges less seller fees and is not in the business of selling products directly.
[+] [-] alaskamiller|6 years ago|reply
Where by FB has no direct incentive, yet. It could be a FB Marketplace PM team someone has already copied Shopify outright and is just waiting for the right time to roll that out to all FB user worldwide.
With Amazon Marketplace the strategy has always been to convert customers off that platform into your own.
Most top listings in most niches/categories are priced for break even inclusive of the multitudes of keyword PPC campaigns they're running with the hope that you leave a review and that you actually pay attention to the little postcard that comes inside the package asking you to register your email address.
Both games suck tbh.
[+] [-] julianlam|6 years ago|reply
Last time I bought an item off eBay, it arrived shipped via Amazon Prime. Pretty sure the seller just bought it off Amazon and shipped it to my house... it was a weird turn of events.
It wasn't a branded item, just a third-party battery replacement for a cordless phone, but still.
[+] [-] chrischen|6 years ago|reply
[+] [-] IG_Semmelweiss|6 years ago|reply
Shopify may not be amazon yet, but it is certainly learning to be that way.
[+] [-] abtinf|6 years ago|reply
[+] [-] CodeCube|6 years ago|reply
I say there should be an explicit difference between "running a platform", and "selling on a platform", and never should the two meet. By "platform" here, and in the context of selling stuff online or IRL, I mainly mean that the store should never compete with their suppliers ... it's madness and unethical. If everyone can get a piece of the pie, it makes for a healthier ecosystem. We should want the rising tide to lift more than one boat.
And yes, I believe this should be regulated at the policy level.
This of course has implications for other forms of "platforms", such as operating systems, APIs, and clouds; but I'll leave those discussions for another time ;)
[+] [-] sacks2k|6 years ago|reply
I had a profitable Amazon store in 2010. I found niche products that Amazon didn't sell. As soon as I started getting traction on any one product, Amazon would start undercutting me, and my sales would drop to almost zero over the course of a couple of weeks.
I had near 100% feedback and I had a single customer complaint that I sold them the wrong product. Within a few minutes of me receiving this claim, my account was suspended. I had no chance to rectify the situation.
No amount of calling or emailing Amazon could get me in front of someone that could help me. All responses were an automated rejection.
This was a rough time for me as it was my only form of income and Amazon held almost $30,000 of my money for 3 months. I ended up having to close my business and move on, though I did eventually get all of my money back.
I've built multiple successful businesses since then and Amazon has recently had many business reps try to get me to sign up with a business account, because we purchase lots of items on Amazon/month. I always try to get them to re-investigate my old seller account and our email correspondence stops shortly after this. It's crazy to me that after 10 years and in a completely different industry, I still can't open a seller account.
It taught me a valuable lesson not to build my entire business on someone else's platform.
It only gives them more control over you and they will most likely use your customers, data, and more resources to out-compete you, if you get too big. Twitter has also done this to their app developers.
My wife runs a small business on Etsy and it's just as bad. They make random code changes, which bumps listings up or down and you suddenly have no orders for weeks at a time.
What's even scarier is if a handful of companies run everything we use online. Will I suddenly not be able to get a home loan for a decade because of an account closure?
[+] [-] MichaelApproved|6 years ago|reply
You're either a platform/retailer or you're a manufacturer. You don't get to be both because we see the perverse incentive that happens when it's allowed.
[+] [-] 12xo|6 years ago|reply
The point is that competitive data is what drives decisions for product and segments in all areas of retail and business. Either in house or outside. Gathering that data from within your property is no different than using an outside agent.
You are acting as if they're spying on their customers, when the customers are you and me, not the reseller using their platform/space/warehouse/services.
[+] [-] x86_64Ubuntu|6 years ago|reply
And private label doesn't mean you have to manufacture anything at all. Sometimes, you will go to the company whose marketshare you are trying to take and they will manufacture the product for you.
[+] [-] chairmanwow1|6 years ago|reply
Do you really think that if Amazon couldn't use the data from its own site that it wouldn't procure it elsewhere? Before any product is developed there is extensive market research done to get an idea of how much money this product could make.
Anyone can and does do this, why should Amazon be punished that its data collection mechanism is cheaper than others?
[+] [-] ses1984|6 years ago|reply
[+] [-] allemagne|6 years ago|reply
Ok, done.
Now what are manufacturers supposed to do when Amazon and Walmart start bullying them some other way? You just made shipping their product directly to the customer against the law.
[+] [-] mtnGoat|6 years ago|reply
We don't need laws to restrict one party from taking advantage of another in a deal... it just takes brains and some companies are using theirs to partner with other platforms or sell DTC(Direct To Consumer)
[+] [-] jberm123|6 years ago|reply
Anyone can host a website, market their product, ship with FedEx/UPS. Preach people do that instead, rather than bow down to our government stamped and approved overlord Amazon.
[+] [-] whoisjuan|6 years ago|reply
Does anyone really think that any retailer launches a competing product in a category without looking at all their supplier data?
If you want distribution you risk this. The only way to avoid it, it's to do direct to consumer or having a product that is extremely hard to copy.
[+] [-] ardy42|6 years ago|reply
IIRC, many traditional white label brands are actually manufactured by the name brands themselves, and they're part of a strategy to segment the market.
The difference here seems to be that Amazon has been cloning relatively unique products made by smaller companies, while traditional white label brands are fungible commodities made by large players with little differentiation. From the OP:
> Because of the limitations of shelf space, traditional retailers stock far fewer products than Amazon’s hundreds millions of items. Typically, they create private-label products to compete in generic categories such as paper towels, rather than copycat versions of items created by smaller entrepreneurs, private-label executives said.
[+] [-] hlmencken|6 years ago|reply
[+] [-] tomohawk|6 years ago|reply
https://www.marketplacepulse.com/articles/amazon-is-a-monopo...
[+] [-] interestica|6 years ago|reply
[+] [-] stcredzero|6 years ago|reply
So, if cars are inevitably becoming computers with wheels, what's going to happen to insurance companies? The major weapon of underwriting is data, and a company like Tesla is going to have a huge advantage in data over external insurance companies.
Is it really a societal good for big companies to control all of this data, or should the data belong to the consumer/owner/user? I suspect it's the latter which gives people the most choice and freedom by fostering the most competition.
[+] [-] bcx|6 years ago|reply
You can see this in how Salesforce and Shopify are leveraging their platforms to learn what is popular and produce/buy their own products to sell to their customers to capture 100% of the value, rather than 30% of the value of the solution to the customer.
[+] [-] malandrew|6 years ago|reply
In fact, many people here contradict their own argument by saying that they are forced to go to other websites or direct to the supplier. Stating as much is tantamount to admitting that the market is functioning correctly.
Amazon is great for some things and bad for other things. If it doesn’t meet your needs, go elsewhere instead of rewarding it with your business and then complaining that it’s too big and powerful because people like yourself keep rewarding it with your business.
[+] [-] gigatexal|6 years ago|reply
[+] [-] thoraway1010|6 years ago|reply
Additionally, most other retailers actually BUY the third parties products and take the risk of promoting and selling it. On Amazon third parties take the inventory and many other risks and may have to pay amazon to promote their product.
The story here is that amazon has testified it does not do something, has supposedly the "highest ethical principals" - yet goes ahead and does exactly that which it said it doesn't do.
Do that not matter to you from a trust / credibility perspective?
[+] [-] stormdennis|6 years ago|reply
[+] [-] Operyl|6 years ago|reply
[+] [-] Frost1x|6 years ago|reply
This is part of the reason systems like the patent system were created for inventions: to encourage people to bother exploring risky unknown spaces to develop inventions by granting them essentially a short term monopoly to harvest their reward which they would then compete against after a time period so society could further benefit from their finding by allowing competition to drive prices down and iterate on those inventions.
Obviously the patent system doesn't really serve this purpose anymore like so many systems that have been sidestepped/bypassed, changed through regulatory capture and corrupted by pure profit seeking behaviors.
[+] [-] sct202|6 years ago|reply
[+] [-] TheKarateKid|6 years ago|reply
Most brands at Walmart and other stores are sold many other places.
[+] [-] dangwu|6 years ago|reply
[+] [-] woodgrainz|6 years ago|reply
https://www.cnbc.com/2019/07/16/amazon-tells-house-it-doesnt...
[+] [-] blueboo|6 years ago|reply
[+] [-] Tiktaalik|6 years ago|reply
Amazon is able to snoop on all the sales data without any risk.
[+] [-] acwan93|6 years ago|reply
Their response is usually “I’m making enough money now, why worry about later?” or “our product category is too niche for Amazon to enter.” It seems like that kind of reasoning makes sense for traditional retailers like Costco/Walmart/Macy’s etc., but not Amazon where Amazon virtually has no risk in listing a product.
[+] [-] johnqpub|6 years ago|reply
[+] [-] tcarn|6 years ago|reply
[+] [-] viahoptop|6 years ago|reply
[+] [-] so_tired|6 years ago|reply
> a practice at odds with the company’s stated policies...
> .. as stated to congress
[+] [-] archgoon|6 years ago|reply
Amazon agrees that, as claimed, this is a problem.
'Amazon said employees using such data to inform private-label decisions in the way the Journal described would violate its policies, and that the company has launched an internal investigation.'
[+] [-] sharkweek|6 years ago|reply
Retail is ruthless.
[+] [-] throwaway5752|6 years ago|reply
Question why and when old news is being dredged up. For example, is Amazon any worse than Wal-mart or Oracle or any other number of companies out there? If something is not contemporaneous news, then why is being being used at the point in time you are reading it? What is the motivation of the group pushing that information? Sometimes that is the even bigger story.
[+] [-] Cactus2018|6 years ago|reply
https://www.amazon.com/s?rh=p_89%3AAmazonBasics
I am happy to buy these products over generics because of the higher quality. Batteries, paper shredders, water filters, electronics accessories, household supplies, office products...
[+] [-] repiret|6 years ago|reply
[+] [-] sh1ps|6 years ago|reply
Looking through the comments, everyone is talking about Amazon.com purchases, but the much quieter, arguably more valuable move on Amazon's part would be to do this via AWS. If you're running your entire system on AWS, Amazon immediately knows what kind of scale you're currently running. Depending on the type of product, they can pretty easily ballpark what your profit margin is based on your pricing model and all the metrics they have on your application (which is basically everything).
The application of this data could be used for acquisition targets, deciding which products to build into AWS, ongoing competitive analysis when they do build those competing products...
[+] [-] dunkelheit|6 years ago|reply
In this case one of consequences could be that previously during negotiations with Amazon suppliers couldn't effectively use the fact that Amazon would scoop them (even if both parties knew that it was true), and now they can.
[+] [-] jadeddrag|6 years ago|reply
[+] [-] kregasaurusrex|6 years ago|reply