Seems like commenters are misreading the lawsuit here. My first instinct after reading the top paragraphs of Stoller's post was also "so what, this seems fine," but if you read to the end and see what the suit is really alleging, it's not just a policy that punished sellers for offering discounts on their products when sold off Amazon. It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers, which is much higher than other online marketplaces and obviously less than the 0% they'd charge themselves to sell through their own site (though they'd still need to pay money to operate the site), and then punishing them if they sell somewhere else that has lower fees for a lower price.
That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. The post is still misleading in that it doesn't mean Amazon is raising prices across the board by 30-45%. But they are raising prices across the board by whatever the delta is between their fees and WalMart's fees, or some other marketplace that charges even less, minus the difference in shipping.
Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. But that doesn't happen precisely because Amazon's massive subscribed user base represents so much of the market that no can afford not to sell there, which is seemingly the definition of a monopoly and why legal intervention is called for. Lower-cost marketplaces can only compete if Amazon is not allowed to blackball sellers from access to the only customer base that matters.
> It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers
I'm glad this was stated. It is new insight for me.
I got in the habit of only buying from the actual manufacturer store on Amazon, thinking it was benefiting the company. For example: buying Bose speakers on the Amazon Bose site, instead of the bose.com. Now I realize that Bose loses a lot of money going through amazon. I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow".
The only thing I've run into is the vendor site saying out of stock, but the vendor -store- on Amazon in stock. E.g., I bought a PixHawk4 flight contgroller from HolyBro. The HolyBro site was out of stock, but Amazon's HolyBro store had it in stock. /bangs head on wall/ I understand why, it's just... weird.
+1 the point of their algorithm not putting sellers in the buy box that offer their product elsewhere cheaper is the problem they should absolutely be ruled to stop that practice by a court. Nobody can make an argument for how that is possibly GOOD for competition and the consumer.
I own a consumer goods business and sell via Amazon and traditional retailers. Amazon's 30% to 40% fee is much less than traditional retail, which starts at 50%. Amazon is where I get my best margins.
> Amazon is charging anywhere between 30-45% in fees to the sellers
Back in the 80s, I used to sell Datalight C and Zortech C++ through mail order distributors. I was shocked to discover they paid us about half, or even less, of what they sold it for.
But they were all like that. It's what the manufacturer has to pay for distribution.
Just try running a store, or a mail order house, without doubling what you pay for the merchandise. You'll go bust if you don't.
If a customer called us direct to buy, it was priced at about the same as what the resellers sold it for. But, of course, then we had to pay the expenses of fulfillment staff, space, etc.
Many people are outraged by this doubling of price from manufacturer to retailer, and start a business believing they can undercut the other retailers and cash in. They get a rude awakening with how much it costs to run a retailing operation. They confuse "margin" with "profit".
> Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers.
WalMart does offer lower seller fees and (at least sometimes) lower prices than Amazon. The problem for me is that those lower prices are usually on things I don't want. I've bought a few times from WalMart's online store, but more often I look for what I want there, can't find it, go to Amazon, find it quickly, and buy it there. Many other comments in this thread indicate that my experience is not atypical.
Breaking up a monopoly is not a good thing if it results in worse outcomes for us as customers. If we end up finding what we want less often, or having to pay more for it, how is that a win?
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped
The type of contract you are describing is common in many industries. They’re known as “full content agreements” in the airline industry for example, and they’re a continual source of tension between the distribution networks and travel agencies (who want these rules) and the airlines (who would like to be able to sell cheaper on their own direct channels). The same thing exists for hotels etc
I guess the question boils down to whether Amazon can be considered to have a monopoly position in the indirect distribution of the specific type of goods being considered. I imagine that might be possible for books, not sure about other goods
It's a messy market. If they weren't paying such high fees to Amazon, they would be paying those fees to Google (Pay per click) or other marketplaces that came and went over the years (those old school price shopping websites - pricegrabber and such)
Walmart does offer a 3rd party seller market and its largely junk in comparison - however, I don't know their fees.
0% is an imaginary fee btw... It costs money to staff/warehouse/sell/distribute/ship/package - i'm willing to bet the 30-45% fee includes amazon warehouse sellers who use prime shipping...
per the post below, a company like bose knows they only make 50% if even that much selling to any retailer, if they can make 55-65% selling direct on amazon and reach the market of people who just default to amazon then they're ahead of other sellers... Prime now for a speaker company is a godesend considering UPS shipping rates and last mile for heavy items are why they depended so much on brick and mortar retail traditionally.
I don't think the system is perfect by anymeans, but Amazon is just playing in a market that was previoulsly dominated by others and a market where fixed 30-45% is much cheaper, than everyone doing payperclick and hopoing for coneversions (googles market)
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped.
IIRC they do something like it with books through Kindle Direct Publishing: you have to sell on Amazon at the lowest price available anywhere, or else they take a much bigger cut.
It will probably be argued that Amazon isn’t actually a monopoly in these areas, therefore it’s not an abuse of monopoly. I’m only half joking.
Many of us are reading this comment and not understanding why we’re being condescended to. We read TFA and not seeing the problem and the fact that you restate the fees for Marketplace aren’t selling it any more than the article. Explain why the mere act of charging 30-45% rent is a monopoly?
I thought those fees are for FBA. I don't think that service exists else where. Charging more than your competitors is not monopolistic. In fact this sentiment doesn't make any sense: how can they have competitors if they are a monopoly. If amazon made its prices lower than its competitors I'm pretty certain they'd be accused of the same thing.
On the other hand AWS basically saved the world from economically collapsing by WFH made possible through the innovation of turn key massive distributed compute capabilities to anyone with a credit card. AWS offered GPU's in 2015, it took both Google and Microsoft 4 years to make a comparable offer.
The crux of the article was that you lose winning the buy offer if you sell elsewhere cheaper. Okay - so who wins the buy box? Someone who is actually offering a cheaper price, one that’s more enticing for me as the shopper?
How is that hurtful for the consumer? You’re calling that “punishment”, but in fact as a shopper I just want to see the lowest price with the fastest shipping.
The seller fee bit part isn’t relevant. Wal Mart and Target or any other site could well offer lower seller fees - in fact, they’d HAVE to undercut Amazon in order to catch up with Amazon. But that doesn’t mean Amazon has to bring their prices down. I don’t buy that.
One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service.
There is quite a bit to this article that’s disingenuous, for example -
> How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price.
If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. But this isn’t quite true. Using hyperbole like “money laundering” also doesn’t help the case.
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy.
Again, hyperbole. The author merely brushes off the fact that these sellers don’t HAVE to sell on Amazon in the first place. Presumably, Amazon is growing because more and more sellers flock to their website. If it’s a bad deal for sellers, they can sell on other websites. The article makes a one line claim - representing it as a ground truth - that a new business HAS to sell on Amazon. So this is clearly stating that no business can survive if they only have their own store presence or sell on Amazons competitors. I don’t believe this is true (based on a very successful family business). Yes my data point is anecdotal, but if we’re saying no business can survive without the ability to sell on Amazon, then the entire article is moot - the simple reason for breaking up Amazon is that no small business can survive without Amazon.
Again, I don’t think that’s true, and the author knows that - hence, the long wordy article to come at the issue from other angles while sprinkling in hyperbole.
Not defending Amazon's behavior but the standard for government intervention in antitrust cases has for decades been how the anticompetitive behavior affects consumers, NOT other businesses/sellers.
And it's pretty clear that Amazon has led to much lower prices and a consumer surplus compared to alternatives in the market.
And for all the shit AMZN gets on HN and over social media, broadly it is still one of the most widely respected and popular companies in the US across a broad spectrum of consumers.
You can argue whether that's overall good or bad, but I'm talking about the law as it is and has been enforced vs. what people WISH the law said.
For whatever reason HN seems to have a rather unhealthy obsession with Amazon that is evident in somewhat regular articles about Amazon’s dominance in the online retail space. Frankly it gets a little tiring after sometime , specially when walmart.com exists and these posts smells like some underhanded SEO type activities. Anyway hopefully HN moderators will take care of this before it becomes a tool in the hand of SEO agencies paid for by other companies.
I know how some can see it as shady or misleading, but I still prefer it. That is, I prefer having the price baked in, right in front of me...no surprises. Versus some indy site I'll think 'oh only six bucks? sure I'll try it' only to be shown it's actually closer to 20 after shipping and tax. That just wastes both our time.
Further, even if it's a hair more expensive, I'll still pay it for the no hassle returns. I recently purchased a knife I saw on Amazon, but decided to go through the seller's official site to save a couple dollars. It was not worth it, and not something I'll do again.
The number of times I’ve gone through the dance of adding to cart, inputting all my information, and then bailing when I see $57 2-day shipping ($97 for next day) and $40 for 5-7 days— it’s ridiculous.
Amazon simplifies my life. To be blunt, I don’t care about the “cost” (fiscal or otherwise).
That's great, for you. The suit isn't alleging that raising the price to pay for free shipping is illegal. The suit is about controlling the market and hiking up the price to pay for your free shipping across the market.
Ie, it's fine that a retailer charges $15 + free shipping, instead of $10 + $5 shipping. It's not fine to them force the price on all other retailers to sell at a minimum of $15. Especially not since they probably have to charge shipping.
The argument that this violates anti trust is because it raises the prices for everyone, not just the people who are fine with hasslefree free shipping
I can rank items by price plus shipping (and filter out stuff I need to wait to arrive from China) for all eBay's inventory, not just some subset of it which they do the fulfilment for.
You have proposed a strawman. What does this have to with Amazon forcing sellers to use Amazon's warehousing and logistics service and ensuring that sellers can’t sell through a different store or even through their own site with a lower price.
I agree. When I buy through Amazon Prime, I can safely buy with one click because I can see the exact price I will be charged and, usually, the exact day it will arrive. For next day delivery, I can't recall they have ever missed the date.
It's logical that they add the cost of shipping to the item price, but their cost must be much lower than alternative sellers, as it is hardly noticeable on low-cost items, and comparable to prices charged by Walmart, etc. who charge extra for shipping.
Amazon stopped having the best pricing long ago, but their real advantage is convenience. Everything is fast, easy, and straightforward - and that's worth the premium (if any).
Wondering what the overlap is between people who share this opinion that having shipping price included is convenient, but do not want sales tax included in the price.
"Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main claim from Racine comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon."
This was the missing piece for me. Would like to see more specifics about how Amazon does this.
The reason Amazon can charge so much for its fulfillment services is that it often delivers the product next day.
I run a print-on-demand company, dropshipping for merchants. For me to deliver a product next day (or even two-day) costs many tens of dollars. The fact that I can buy a $7.95 item on Amazon and have it profitably delivered in a day or two is absolutely incredible. It should be lauded, not punished.
>Amazon founder Jeff Bezos knew that the number one pain point for online buyers is shipping
I disagree. I can't speak for everyone, but for me I want to know the full price of something as soon as possible. Most online/mail order retailers used "shipping" as an opportunity to milk customers for a few more dollars as the amount charged really didn't reflect how much it cost to ship an item.
Customers are well aware today that "free shipping" just means "shipping included". I think this is one thing Amazon has pioneered that is actually GREAT for customers. I would rather see a law passed that makes it illegal to add more fees than the first price you see (after choosing a non-specific shipping location). It'd still be legal to subtract from that to combine on shipping of multiple items, but never add.
You know, in Santiago, near where I lived there was a kiosk owner making, no joke, a million USD a year, in Chile of all places, just because he had a killer location. I knew the guy, I think his name was CG or similar, I never saw the name in print, and he was a pretty solid guy but he knew exactly how much to charge for the convenience. Now it is pretty convenient, but finally someone put up a shop close by, explicitly to compete with CG, and he undercuts him a lot.
I feel like college economics classes teach you a version of perfect competition (like kiosks in Santiago) that is what I would call "hyper-lubricated." Profits lead to competitors instantly, without any friction or delay. You can't raise your prices long enough to profit. And that's not real, many businesspersons can raise prices and profit from it for a period of several years thanks to this friction. But eventually people figure out you're giving them a bad deal in a way they can't forgive.
That happened to me with Amazon. They sold me some fake shit, not much fake shit, not expensive, but that was it, after all that bluster about how I'd never do business with a company that did x or y, I found out x and y consist specifically of selling counterfeits.
It's amazing how writing with a certain tone can totally change how people would react to basic facts. Not that Stoller doesn't manipulate basic facts anyway. The A brief word on numbers is hilarious given his preceding paragraph.
I do agree that Amazon shouldn't be allowed to force sellers to price match on Amazon, though.
When I search for cheap carabiner's on Amazon I notice that my former purchase no longer shows up on amazon search, even though it is prime, and offers great price+product characteristics: https://www.amazon.com/gp/product/B016CMFESW
This pattern seems to be showing up more and more. Maybe it's just that the FBA marketplace is flooded with too many choices, but my "best" often seems to be not searchable any more.
In the carabiner example I present, there are plenty of tiny carabiners or those with weird shapes, or expensive ones. Just not low cost, non-tiny, normal shaped carabiners
Amazon founder Jeff Bezos knew that the number one pain point for online buyers is shipping - one third of shoppers abandon their carts when they see shipping charges.
I'll wager this is due to sites that won't let shoppers see shipping charges until they get to the end of checkout.
The sunk-cost focus of just getting people to pay for a membership to something and then they care about getting the most out of their membership… that would be an issue on its own, though not massively distorting.
The rest of the behind-the-scenes stuff is appalling.
I fear that doing anything about this relies mainly on bad experiences. The harder it is to find a good product or the more commonly a low-quality knock-off makes people unhappy, the more they will actually listen to these other complaints about all the problems with Amazon. If Amazon can figure out how to keep customers having mostly positive experiences of finding things they want and being happy with them, it will be very difficult to get the public support needed to push back on all the problems.
Lousy bread and boring circuses make it much easier to build movements for change. Artisan bread and excellent circuses really are probably enough to keep people from wanting to rock the boat (sorry for the mixed metaphor).
Sellers compete for the "buy box", inflating prices through Amazon requirements. That seems fair enough, but why then are the "other sellers" never cheaper, at least in my experience? While the buy box might have the costs of shipping and FBA baked in, the other options don't yet they're universally a worse deal all in. More often than not they're the "gimmicky" types of deals where the base price is "less", but the shipping is absurd.
Conditions like "don't sell cheaper elsewhere" are gross across the board, but the fundamental point doesn't seem valid.
> Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main claim from Racine comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
>Amazon has between a half and three quarters of all customers online, so not being able to sell on Amazon is a nonstarter for brands and merchants. As a result, to keep selling on Amazon, merchants are forced to inflate their prices everywhere, with the 35-45% commission baked into the consumer price regardless of whether they are selling through Amazon.
[...]
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy. Amazon spent some of it to build out a Hollywood studio, offering its original content ‘free’ to Prime members, who are of course indirectly paying for it with higher consumer prices. Prime also offers free video games and millions of songs. But none of this is actually free, it’s paid for by Prime members in ways that Amazon disguises with its coercive arrangements.
Screams monopoly. I think if the regulators and courts are just they'll sunder Amazon's "flywheel" and force them to deal honestly.
Only mentioned a few times here, but I think Amazon's "moat" is actually their customer service.
It's the only reason I'm still strongly with them.
I'd pay higher prices elsewhere for "local" or "indie" or whatever ... but have been stung so many times that I return to Amazon.
I'm p!ssed off about that, as I recognise Amazon as the monopoly, but don't take kindly either to get ripped off elsewhere.
Personally, yes, a monopoly is in the house. But the rest of retail has to up their game.
If Amazon get broken up, which causes their prices to rise, which helps competition. That competition will still need to "customer serve" as well as Amazon for me to consider them.
Good lawsuit, but stupid article. It’s good practice that Amazon is incorporating the shipping price into the listed price of the product instead of charging it separately. On the other hand the practice of policing the prices that sellers charge for products outside the Amazon platform is certainly anti-competitive and should be slapped down by the courts.
> Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
How exactly does Amazon achieve this? How can they tell that CheapGoods4u on Amazon is the same seller as BargainStuff4Less over on Walmart?
If they can't tell the sellers are the same company, they can't punish one for selling cheaper on another platform.
This sort of reads to me like Amazon have mastered the last mile that people really care about and are charging a premium for sellers to leverage their last mile solution. I just don’t see how this constitutes a monopoly when you have tons of other options out there. Walmart, Target, Wayfair, Shopify all are competing.
The original idea with prime (for the consumer) was that they would get free two day shipping. Amazon already had free shipping for Amazon sold items starting at like $25 total (is it 35 now?) but back then it could take 3-7 days to arrive.
I can't claim to know the average amount of orders but it is not that hard to meet the hurdle for free 'standard' shipping and (pre-covid) most deliveries now are already in a two to three day window.
Think it will be difficult to prove that the existence of Prime actually inflates the price of goods, net net, absent Prime.
They have to pass a law preventing marketplaces from mandating prices on other marketplaces - this is straight out consumer hurting uncompetitive behaviour 101% when coupled with large market makers - governments are supposed to deal with this shit in the interest of consumers.
[+] [-] nonameiguess|4 years ago|reply
That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. The post is still misleading in that it doesn't mean Amazon is raising prices across the board by 30-45%. But they are raising prices across the board by whatever the delta is between their fees and WalMart's fees, or some other marketplace that charges even less, minus the difference in shipping.
Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. But that doesn't happen precisely because Amazon's massive subscribed user base represents so much of the market that no can afford not to sell there, which is seemingly the definition of a monopoly and why legal intervention is called for. Lower-cost marketplaces can only compete if Amazon is not allowed to blackball sellers from access to the only customer base that matters.
[+] [-] SavantIdiot|4 years ago|reply
I'm glad this was stated. It is new insight for me.
I got in the habit of only buying from the actual manufacturer store on Amazon, thinking it was benefiting the company. For example: buying Bose speakers on the Amazon Bose site, instead of the bose.com. Now I realize that Bose loses a lot of money going through amazon. I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow".
The only thing I've run into is the vendor site saying out of stock, but the vendor -store- on Amazon in stock. E.g., I bought a PixHawk4 flight contgroller from HolyBro. The HolyBro site was out of stock, but Amazon's HolyBro store had it in stock. /bangs head on wall/ I understand why, it's just... weird.
[+] [-] felixfbecker|4 years ago|reply
[+] [-] testcase_delta|4 years ago|reply
[+] [-] WalterBright|4 years ago|reply
Back in the 80s, I used to sell Datalight C and Zortech C++ through mail order distributors. I was shocked to discover they paid us about half, or even less, of what they sold it for.
But they were all like that. It's what the manufacturer has to pay for distribution.
Just try running a store, or a mail order house, without doubling what you pay for the merchandise. You'll go bust if you don't.
If a customer called us direct to buy, it was priced at about the same as what the resellers sold it for. But, of course, then we had to pay the expenses of fulfillment staff, space, etc.
Many people are outraged by this doubling of price from manufacturer to retailer, and start a business believing they can undercut the other retailers and cash in. They get a rude awakening with how much it costs to run a retailing operation. They confuse "margin" with "profit".
[+] [-] pdonis|4 years ago|reply
WalMart does offer lower seller fees and (at least sometimes) lower prices than Amazon. The problem for me is that those lower prices are usually on things I don't want. I've bought a few times from WalMart's online store, but more often I look for what I want there, can't find it, go to Amazon, find it quickly, and buy it there. Many other comments in this thread indicate that my experience is not atypical.
Breaking up a monopoly is not a good thing if it results in worse outcomes for us as customers. If we end up finding what we want less often, or having to pay more for it, how is that a win?
[+] [-] namdnay|4 years ago|reply
The type of contract you are describing is common in many industries. They’re known as “full content agreements” in the airline industry for example, and they’re a continual source of tension between the distribution networks and travel agencies (who want these rules) and the airlines (who would like to be able to sell cheaper on their own direct channels). The same thing exists for hotels etc
I guess the question boils down to whether Amazon can be considered to have a monopoly position in the indirect distribution of the specific type of goods being considered. I imagine that might be possible for books, not sure about other goods
[+] [-] bryanrasmussen|4 years ago|reply
It seems monopsonistic to me, I believe it should be illegal but not sure it actually is?
[+] [-] supernovae|4 years ago|reply
Walmart does offer a 3rd party seller market and its largely junk in comparison - however, I don't know their fees.
0% is an imaginary fee btw... It costs money to staff/warehouse/sell/distribute/ship/package - i'm willing to bet the 30-45% fee includes amazon warehouse sellers who use prime shipping...
per the post below, a company like bose knows they only make 50% if even that much selling to any retailer, if they can make 55-65% selling direct on amazon and reach the market of people who just default to amazon then they're ahead of other sellers... Prime now for a speaker company is a godesend considering UPS shipping rates and last mile for heavy items are why they depended so much on brick and mortar retail traditionally.
I don't think the system is perfect by anymeans, but Amazon is just playing in a market that was previoulsly dominated by others and a market where fixed 30-45% is much cheaper, than everyone doing payperclick and hopoing for coneversions (googles market)
[+] [-] dpwm|4 years ago|reply
IIRC they do something like it with books through Kindle Direct Publishing: you have to sell on Amazon at the lowest price available anywhere, or else they take a much bigger cut.
It will probably be argued that Amazon isn’t actually a monopoly in these areas, therefore it’s not an abuse of monopoly. I’m only half joking.
[+] [-] hammock|4 years ago|reply
You ought to see what b&m retailers charger their suppliers !
[+] [-] rubyfan|4 years ago|reply
[+] [-] bennysomething|4 years ago|reply
[+] [-] setum|4 years ago|reply
how would Amazon know if a particular seller is also selling elsewhere?
[+] [-] lowdose|4 years ago|reply
[+] [-] tracer4201|4 years ago|reply
How is that hurtful for the consumer? You’re calling that “punishment”, but in fact as a shopper I just want to see the lowest price with the fastest shipping.
The seller fee bit part isn’t relevant. Wal Mart and Target or any other site could well offer lower seller fees - in fact, they’d HAVE to undercut Amazon in order to catch up with Amazon. But that doesn’t mean Amazon has to bring their prices down. I don’t buy that.
One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service.
There is quite a bit to this article that’s disingenuous, for example -
> How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price.
If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. But this isn’t quite true. Using hyperbole like “money laundering” also doesn’t help the case.
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy.
Again, hyperbole. The author merely brushes off the fact that these sellers don’t HAVE to sell on Amazon in the first place. Presumably, Amazon is growing because more and more sellers flock to their website. If it’s a bad deal for sellers, they can sell on other websites. The article makes a one line claim - representing it as a ground truth - that a new business HAS to sell on Amazon. So this is clearly stating that no business can survive if they only have their own store presence or sell on Amazons competitors. I don’t believe this is true (based on a very successful family business). Yes my data point is anecdotal, but if we’re saying no business can survive without the ability to sell on Amazon, then the entire article is moot - the simple reason for breaking up Amazon is that no small business can survive without Amazon.
Again, I don’t think that’s true, and the author knows that - hence, the long wordy article to come at the issue from other angles while sprinkling in hyperbole.
[+] [-] forgithubs|4 years ago|reply
I also buy on Ebay, Craglist, Walmart and diverse retailers that are entering the eCommerce game.
The thing here is that markets take longer to work but if you look around, there is plenty of competition.
[+] [-] skystarman|4 years ago|reply
And it's pretty clear that Amazon has led to much lower prices and a consumer surplus compared to alternatives in the market.
And for all the shit AMZN gets on HN and over social media, broadly it is still one of the most widely respected and popular companies in the US across a broad spectrum of consumers.
You can argue whether that's overall good or bad, but I'm talking about the law as it is and has been enforced vs. what people WISH the law said.
[+] [-] la6471|4 years ago|reply
[+] [-] silisili|4 years ago|reply
Further, even if it's a hair more expensive, I'll still pay it for the no hassle returns. I recently purchased a knife I saw on Amazon, but decided to go through the seller's official site to save a couple dollars. It was not worth it, and not something I'll do again.
[+] [-] thathndude|4 years ago|reply
Amazon simplifies my life. To be blunt, I don’t care about the “cost” (fiscal or otherwise).
[+] [-] mrkurt|4 years ago|reply
The cost is high though. Amazon is already much lower quality than they were 10 years ago.
[+] [-] cerved|4 years ago|reply
Ie, it's fine that a retailer charges $15 + free shipping, instead of $10 + $5 shipping. It's not fine to them force the price on all other retailers to sell at a minimum of $15. Especially not since they probably have to charge shipping.
The argument that this violates anti trust is because it raises the prices for everyone, not just the people who are fine with hasslefree free shipping
[+] [-] notahacker|4 years ago|reply
[+] [-] thn-gap|4 years ago|reply
No. That just wastes your time, not the seller's. And some of these people will just buy the product anyway.
[+] [-] lenkite|4 years ago|reply
[+] [-] warmfuzzykitten|4 years ago|reply
It's logical that they add the cost of shipping to the item price, but their cost must be much lower than alternative sellers, as it is hardly noticeable on low-cost items, and comparable to prices charged by Walmart, etc. who charge extra for shipping.
[+] [-] manigandham|4 years ago|reply
[+] [-] micheljansen|4 years ago|reply
[+] [-] randyrand|4 years ago|reply
I always try to look elsewhere .
[+] [-] miked85|4 years ago|reply
[+] [-] goodpoint|4 years ago|reply
> Versus some indy site
This is a false dichotomy. Nothing prevents showing both the item price and the shipping-included price next to each item.
[+] [-] aimor|4 years ago|reply
This was the missing piece for me. Would like to see more specifics about how Amazon does this.
[+] [-] stickfigure|4 years ago|reply
I run a print-on-demand company, dropshipping for merchants. For me to deliver a product next day (or even two-day) costs many tens of dollars. The fact that I can buy a $7.95 item on Amazon and have it profitably delivered in a day or two is absolutely incredible. It should be lauded, not punished.
[+] [-] docdeek|4 years ago|reply
That's not entirely accurate.
France has disallowed free shipping for books. Every other category of product at Amazon qualifies for free shipping.
While the article the author links to makes this clear near the end of that article, to write that France has banned free shipping is barely accurate.
[+] [-] gmiller123456|4 years ago|reply
I disagree. I can't speak for everyone, but for me I want to know the full price of something as soon as possible. Most online/mail order retailers used "shipping" as an opportunity to milk customers for a few more dollars as the amount charged really didn't reflect how much it cost to ship an item.
Customers are well aware today that "free shipping" just means "shipping included". I think this is one thing Amazon has pioneered that is actually GREAT for customers. I would rather see a law passed that makes it illegal to add more fees than the first price you see (after choosing a non-specific shipping location). It'd still be legal to subtract from that to combine on shipping of multiple items, but never add.
[+] [-] daniel-cussen|4 years ago|reply
I feel like college economics classes teach you a version of perfect competition (like kiosks in Santiago) that is what I would call "hyper-lubricated." Profits lead to competitors instantly, without any friction or delay. You can't raise your prices long enough to profit. And that's not real, many businesspersons can raise prices and profit from it for a period of several years thanks to this friction. But eventually people figure out you're giving them a bad deal in a way they can't forgive.
That happened to me with Amazon. They sold me some fake shit, not much fake shit, not expensive, but that was it, after all that bluster about how I'd never do business with a company that did x or y, I found out x and y consist specifically of selling counterfeits.
[+] [-] creddit|4 years ago|reply
I do agree that Amazon shouldn't be allowed to force sellers to price match on Amazon, though.
[+] [-] novaleaf|4 years ago|reply
This pattern seems to be showing up more and more. Maybe it's just that the FBA marketplace is flooded with too many choices, but my "best" often seems to be not searchable any more.
In the carabiner example I present, there are plenty of tiny carabiners or those with weird shapes, or expensive ones. Just not low cost, non-tiny, normal shaped carabiners
[+] [-] WarOnPrivacy|4 years ago|reply
I'll wager this is due to sites that won't let shoppers see shipping charges until they get to the end of checkout.
[+] [-] quadrangle|4 years ago|reply
The rest of the behind-the-scenes stuff is appalling.
I fear that doing anything about this relies mainly on bad experiences. The harder it is to find a good product or the more commonly a low-quality knock-off makes people unhappy, the more they will actually listen to these other complaints about all the problems with Amazon. If Amazon can figure out how to keep customers having mostly positive experiences of finding things they want and being happy with them, it will be very difficult to get the public support needed to push back on all the problems.
Lousy bread and boring circuses make it much easier to build movements for change. Artisan bread and excellent circuses really are probably enough to keep people from wanting to rock the boat (sorry for the mixed metaphor).
[+] [-] defaultname|4 years ago|reply
Conditions like "don't sell cheaper elsewhere" are gross across the board, but the fundamental point doesn't seem valid.
[+] [-] modeless|4 years ago|reply
Like this deodorant. $1.88/oz with Prime and you have to buy at least a 4 pack. $1.15/oz on Fresh, and you can buy just one.
Prime: https://www.amazon.com/Dove-Advanced-Antiperspirant-Deodoran...
Fresh: https://www.amazon.com/Dove-Antiperspirant-Deodorant-Fresh-2...
[+] [-] malwarebytess|4 years ago|reply
> Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main claim from Racine comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
>Amazon has between a half and three quarters of all customers online, so not being able to sell on Amazon is a nonstarter for brands and merchants. As a result, to keep selling on Amazon, merchants are forced to inflate their prices everywhere, with the 35-45% commission baked into the consumer price regardless of whether they are selling through Amazon.
[...]
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy. Amazon spent some of it to build out a Hollywood studio, offering its original content ‘free’ to Prime members, who are of course indirectly paying for it with higher consumer prices. Prime also offers free video games and millions of songs. But none of this is actually free, it’s paid for by Prime members in ways that Amazon disguises with its coercive arrangements.
Screams monopoly. I think if the regulators and courts are just they'll sunder Amazon's "flywheel" and force them to deal honestly.
[+] [-] LightG|4 years ago|reply
It's the only reason I'm still strongly with them.
I'd pay higher prices elsewhere for "local" or "indie" or whatever ... but have been stung so many times that I return to Amazon.
I'm p!ssed off about that, as I recognise Amazon as the monopoly, but don't take kindly either to get ripped off elsewhere.
Personally, yes, a monopoly is in the house. But the rest of retail has to up their game.
If Amazon get broken up, which causes their prices to rise, which helps competition. That competition will still need to "customer serve" as well as Amazon for me to consider them.
[+] [-] ummonk|4 years ago|reply
[+] [-] londons_explore|4 years ago|reply
How exactly does Amazon achieve this? How can they tell that CheapGoods4u on Amazon is the same seller as BargainStuff4Less over on Walmart?
If they can't tell the sellers are the same company, they can't punish one for selling cheaper on another platform.
[+] [-] rubyfan|4 years ago|reply
[+] [-] beezle|4 years ago|reply
I can't claim to know the average amount of orders but it is not that hard to meet the hurdle for free 'standard' shipping and (pre-covid) most deliveries now are already in a two to three day window.
Think it will be difficult to prove that the existence of Prime actually inflates the price of goods, net net, absent Prime.
[+] [-] reader_mode|4 years ago|reply