[HN Gopher] Amazon scooped up data from its own sellers to launc...
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Amazon scooped up data from its own sellers to launch competing
products
Author : benryon
Score : 928 points
Date : 2020-04-23 14:13 UTC (8 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| coolswan wrote:
| In long-run, I predict that sellers de-listing because of this
| and moving elsewhere will have not been worth whatever money it
| is they will make as a seller on their own platform.
| bigbossman wrote:
| This is not only obvious, it's Amazon's explicit strategy to have
| their own products listed alongside 3rd party products. It's been
| that way ever since they made the then-controversial decision to
| launch a 3rd party marketplace business in 1999 to compete vs
| eBay.
| PaulDavisThe1st wrote:
| The competition with eBay started before 1999, and 3rd party
| sellers was not a major part of the strategy nor was it really
| concerned with eBay (which is 1999 was literally NOTHING but an
| auction site).
|
| Amazon had its own "auctions" site in the late 1990s which many
| people forget even existed (it's one of the few things that
| Amazon tried and failed at). Bezos knew that eBay was a problem
| as soon as they emerged, and worried that Amazon would never
| compete effectively against them. In many senses, he was right.
|
| How do I know this? I worked with Bezos in the legendary
| "garage" in Bellevue, WA.
| Tiktaalik wrote:
| 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.
| acwan93 wrote:
| 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.
| bootlooped wrote:
| The other thing is that Amazon effectively has unlimited
| funds to fight a seller for control of an ASIN. They can sell
| at a loss for as long as it takes to squeeze you out. They
| have a massive unfair advantage.
| toasterlovin wrote:
| When your customers say that their product is too niche,
| they're probably right in a lot of cases. The argument that
| Amazon can enter every niche and cater to every consumer want
| is essentially saying that planned economies can actually
| function. But they can't. Amazon is skimming the highest
| volume product categories and that's it. They couldn't manage
| the complexity of branching out into every single long tail
| product.
| econcon wrote:
| Yes they can't but what Amazon is usually doing is pretty
| simple.
|
| It gets into things where not much is needed.
|
| For example, USB cables, laptop sleeves, kettle bells,
| dumbell, weight plates, led light and this kind of category
| is simply too big and it will put whoever ever discovered a
| new niche which doesn't require anything more than the
| physical product get outcompeted by Amazon.
| PaulDavisThe1st wrote:
| Not highest volume.
|
| Highest gross profit (volume * margin).
|
| And how would you ever know either of these two (volume,
| margin) if you were an arbitrary 3rd party?
|
| Amazon doesn't need to branch out into every single long
| tail product to cause severe disruption to a retail sector
| that is often predicated on low single digit margins.
| econcon wrote:
| How does Amazon know margin?
|
| Amazon know volume, Amazon goes to suppliers on alibaba
| and gives them the quantity they require and then Amazon
| figures out what margin they'll be making if they sell it
| at the same or lower price than the original seller.
| PaulDavisThe1st wrote:
| If you can't see volume, you can't estimate profit, and
| you can't differentiate which products are worth
| considering as a primary seller.
|
| Start with volume as a suggestion of which products to
| investigate for purchase price with sellers. If you can
| get the "right" price with the "appropriate" volume,
| start selling the product direct.
|
| Also, at Amazon scale, you can estimate margin by looking
| at price variation over time and throwing in some well
| tested assumptions.
| toasterlovin wrote:
| > Also, at Amazon scale, you can estimate margin by
| looking at price variation over time and throwing in some
| well tested assumptions.
|
| You really can't. You have to do research and modeling to
| figure out margins. There are probably half a dozen
| factors that determine a product's margin.
| johnqpub wrote:
| That's not entirely true. Plenty of retail items are sold on
| consignment.
| jadeddrag wrote:
| Is this any different than what other stores do with their own
| store brands?
| mywittyname wrote:
| Because it amounts to IP theft.
|
| It's one thing to see that unbleached toilet paper is selling
| well, and getting a supplier to sell you a store brand version.
| But it's completely different to see that a particular office
| stand is selling very well, determine that it has a 20% margin,
| and have someone build an identical product which you sell 5%
| margin.
|
| If you look at many Amazon Basics products, they are clear
| ripoffs of existing products. To the point where they are
| indistinguishable from the images. I was looking for a Lodge
| braisier just yesterday and saw that AB produced an identical
| product, down to the unique blue color Lodge uses in their
| enamel.
|
| I guess you could go through the trouble of suing Amazon,
| assuming you had the resources. But then you'd be booted from
| the platform and they'd still be selling your knockoffs for
| years.
|
| I think it's fine if Amazon sees that cast iron cookware is
| selling well and decides to enter that market. What's not fine
| is to blatantly steal the design of the best selling product in
| a category, then make your ripoff more visible on your site. At
| least make an _attempt_ to differentiate the product.
| ThrowawayR2 wrote:
| > " _It 's one thing to see that unbleached toilet paper is
| selling well, and getting a supplier to sell you a store
| brand version. But it's completely different to see that a
| particular office stand is selling very well, determine that
| it has a 20% margin, and have someone build an identical
| product which you sell 5% margin._"
|
| Those two sound like the exact same thing to me. There is no
| real difference.
|
| It even happens between electronics manufacturers; you'll see
| a company noticing a competitor's product is successful,
| dissecting it to figure out the manufacturing costs and
| estimated margin, and tailoring its product line to provide a
| competitive product.
|
| (Aside from all that, I though HNers didn't believe in IP?)
| mywittyname wrote:
| Well, you can patent or trademark designs. And our legal
| system protects the holder of those patents and trademarks
| for good reason. Amazon is able to leverage their position
| in the market to abuse suppliers and get away with illegal
| behavior because the suppliers lack the resources to fight
| Amazon.
|
| There's a difference between a clean room design that takes
| inspiration from a product and an identical copy. I can
| write and perform a song in the style of The Beatles, but I
| cannot write and perform "Hey Jude" without paying
| royalties.
| SlowRobotAhead wrote:
| In what way does Amazon know the backend margins that any
| other store wouldn't?
|
| They don't. Amazon isn't being asked to produce a product for
| a vendor then taking that and selling it themselves, that
| would be wrong. This is Amazon doing exactly what other
| stores do, seeing what sells well and making their own
| version.
| toasterlovin wrote:
| A. Amazon doesn't know what seller margins are. They can't
| because they have no insight into what sellers pay for the
| products, only what the products sell for.
|
| B. The main reason that products, in general, look alike is
| because they're all being produced at the same 3 factories in
| China. And for lots of products, there's no reason to deviate
| significantly from the house design that the factory offers.
| Cthulhu_ wrote:
| I suspect that's more coordinated - you get the own brand which
| is generally cheap and cheerful, then the premium brands. I
| suspect there's some oversight there though.
|
| I think the real question to ask is whether or not Amazon has a
| monopoly and whether they are abusing it to gain an unfair
| advantage over the producers of the stuff they sell. I mean
| when you mention other stores, I don't know if you mean this
| but I'm picturing e.g. a grocery store - where I come from
| there's usually three competing ones in the neighbourhood. They
| will all sell products from a premium brand, alongside their
| own (cheaper) store brand. But the premium brand is usually
| available at all competitors at similar prices.
| fuddle wrote:
| They also get free advertising, while every merchant has to pay
| $1+ cost per click on the Amazon advertising network to advertise
| the same product.
| jankyxenon wrote:
| This is not that different from smartphone OS makes building
| functions from popular apps into the OS
| kregasaurusrex wrote:
| 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.
| jacobr1 wrote:
| Another approach ... they could also identify which products
| either have wide-supplier diversity for the same thing
| (commodities) or narrow supplier density with many branded
| variants (OEM suppliers). In either case, they can go direct to
| the manufacturer without ANY innovation, slap the label on, and
| cut out the middle-man/sub-retailer costs. I think Amazon, in
| particular, has a team analyzing these factors as input into
| their sourcing (on top of general considerations like margin).
| scottmcleod wrote:
| Duh..?
| wintermutestwin wrote:
| How long until the headline is: "google datamined your emails to
| detect and squash disruption to its business models?"
| econcon wrote:
| As someone who sells on Amazon India, we made huge money on
| Amazon India.
|
| Our process is rather simple.
|
| Buy 100 units of some new promising product from Alibaba, list it
| on Amazon. Work on our marketing copy.
|
| If it sells well, optimize packaging and sales copy, increase
| price and order 1000 units.
|
| Then rise and repeat.
|
| You'll be suprized how low is the competition on Amazon India and
| how high is the volume.
|
| It seems local sellers are clueless for now.
| kevinthew wrote:
| This is probably illegal via antitrust law -- it's inherently
| anticompetitive -- and just hasn't been tested. Another example
| of Amazon being an unethical company.
| fishingisfun wrote:
| nothing new. Read the book about it and it mentions this process
| on virtually all the categories they list for selling
| dredmorbius wrote:
| What book?
| ivan_ah wrote:
| Paywall bypass http://archive.is/7cdD3
| perfectstorm wrote:
| isn't this what Costco, Walmart are doing? I thought this is
| pretty common in the retail world - i.e to cut out the middle man
| and price it just below the name brand so people buy the store
| brand because it's cheaper.
| neonate wrote:
| https://archive.md/7cdD3
| throwaway55554 wrote:
| Don't grocery stores do this with own-labeled items?
| ProAm wrote:
| Grocery stores dont prevent you from selling your product
| elsewhere for cheaper.
| CodeCube wrote:
| 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 ;)
| URSpider94 wrote:
| So, force all retail stores to divest their house brands, which
| they have been selling without complaint as long as I've been
| alive?
| triceratops wrote:
| Those are different. Explained elsewhere in the thread:
| https://news.ycombinator.com/item?id=22961009
| CodeCube wrote:
| yes
| darkerside wrote:
| Such a difficult thing to regulate. The instant you stop Amazon
| from selling on its own platform, they will open a subsidiary
| Amazon Retail, which is a favored customer on their platform.
| Whatever new regulation you can come up with, there will be
| armies of corporate lawyers ready to satisfy your requirements
| while still capturing that audience who is ready (and wants) to
| be captured by a platform-branded generic option.
| drc500free wrote:
| This seems a bit defeatist. We've successfully regulated
| against vertical integration in the past.
| smnrchrds wrote:
| Yeah, just take a look at the financial sector. Your
| typical big investment bank has insider knowledge of a
| sizable percentage of the companies in the economy and
| separately, makes tons of trades. The two businesses are
| kept separate, no information exchanges between the two
| groups, no winks and nudges. If they get it wrong, they
| could go to jail.
|
| If it is possible to create a so-called _firewall_ [0]
| within banks to avoid unfair advantage via insider trading,
| it is possible to create a firewall between the platform
| and seller divisions withing Amazon for a similar effect.
|
| [0] https://www.investopedia.com/terms/f/firewall.asp
| gautamcgoel wrote:
| Do you believe that investment banks actually respect the
| principle of a level playing field? Given the widespread
| fraud revealed during the 2008 financial crisis, I find
| that a more plausible scenario is the banks pay lip
| service to the idea of a level playing field and make a
| show of instituting a firewall, but in practice the
| firewall leaks information like a sieve, which the banks
| ruthlessly exploit for profits. The bigger the bank, the
| more clients they have, hence the more information they
| have, hence the higher the chance for insider trading and
| big profits.
| jkestner wrote:
| And yet we let politicians who have knowledge and even
| control over markets have direct investments.
|
| If a firewall can be implemented, fine, but I don't see
| any great loss if we were to restrict the growth of a
| trillion-dollar company.
| dnissley wrote:
| Would this apply to physical platforms as well? E.g. Walmart
| and Target who also do similar things with similar data
| CodeCube wrote:
| yes
| choward wrote:
| App stores are the same thing since most companies with app
| stores have their own apps. They can decide when the right time
| is to build their own version of something that's popular and
| promote it in their app store.
| friendlybus wrote:
| Microsoft was trying to do this and it led to antitrust
| cases. The browser wars ended with windows forced open to
| multiple default browsers.
| shim__ wrote:
| > And yes, I believe this should be regulated at the policy
| level.
|
| But why? Nobody is forcing you to use AWS, there in fact heaps
| of similar services around which at first glance don't share
| have said problem.
| SeeTheTruth wrote:
| Because "consumer choice" isn't a practical and full response
| to corporate abuse of power. Regulation is complete - if it's
| a well written regulation it works.
|
| "Nobody is forcing you" misses the point.
| arrosenberg wrote:
| Amazon has a dominant position in the marketplace and it is
| leveraging it in a blatantly anti-competitive manner. As a
| country we have consistently decided that smaller and
| decentralized is better - there is no compelling reason to
| allow Amazon to keep borging small businesses.
| TulliusCicero wrote:
| Nah, the way Amazon runs right now is pretty beneficial to me
| as a consumer. Having access to Amazon stuff and third party
| stuff in one place is nice.
| replicatorblog wrote:
| So no private label products from Walmart, Target, Kroger, or
| CVS?
| triceratops wrote:
| Those are different. Explained elsewhere in the thread:
| https://news.ycombinator.com/item?id=22961009
| CodeCube wrote:
| ideally, no
| entee wrote:
| The major question I don't have a good answer to is, "Why is
| this different than brick and mortar store brands like Safeway
| signature?"
|
| Surely a part of is is placement, but Safeway could put own
| brand ketchup at the same level (and I think sometimes does) as
| Heinz and still wouldn't sell the same volume.
|
| Amazon is clearly getting a big advantage here, I'm just
| curious about what the underlying dynamics are that allow them
| to be so much more successful in their context than it seems
| store brands are in other contexts.
| rahul003 wrote:
| Does it mean that the brand of Amazon is better than the
| likes of Safeway or Target who sell their own products to
| compete with more name brand ones? Or it could also be that
| the brands on Amazon such as the top voted comment here might
| be smaller brands without enough name recognition to gain the
| attention of a buyer.
| pge wrote:
| I have wondered the same thing every time this question comes
| up. It seems the difference is that the companies that put
| products in grocery stores are very large companies that
| spend a huge amount on marketing themselves (e.g. P&G,
| General Mills). So, the "house brand" is less recognizable to
| consumers and sells at a discount to the known brand that is
| often a larger company than the grocery chain. The grocery
| stores need the name brands because shoppers come looking for
| them (and Safeway gets the benefit of all the marketing they
| do). In Amazon's case, they are serving as a distribution
| channel for many, many small brands, none of which are known
| as well as Amazon (whereas Kellogg's cereal is better known
| than Safeway). That changes the power dynamic in favor of
| Amazon.
| chillacy wrote:
| I had a friend who worked at a milk factory. They took
| their 2% organic milk and piped it into cartons with
| different labels: brand names as well as store brands, off
| to be sold at various price points.
|
| To his company it didn't matter at the end of the day if
| people bought the brand name or the store brand, it was all
| the same stuff.
| entee wrote:
| I think you're totally right. In addition/corollary, it
| seems a lot of the things Amazon Basics sells are basically
| commodities. If you have a million iPad stands, eh, just
| buy the amazon basics one, it's probably not crap and the
| reviews look good. I need my stand, my USB adapter, my
| cable, my whatever to just, "do the job", there's not a
| whole lot of performance differential within the category
| beyond works/doesn't work. If there's a strong quality
| differentiator in the product I think they'd do less well
| and I bet their data scientists have answered that question
| one way or the other.
| samatman wrote:
| This also points to a hidden advantage Amazon has which
| is totally unethical. Namely, Amazon is perfectly willing
| to sell counterfeit name-brand goods, and presumably this
| doesn't extend to their own Amazon Basics products.
|
| I don't think this singlehandedly explains why Amazon is
| so unwilling to do anything about their huge counterfeit
| problem, but it's suspicious that the dilemma resolves in
| their favor.
| snowwrestler wrote:
| The difference is that Safeway does not have any other
| _sellers_ on their shelves. Safeway buys inventory at
| wholesale and sells it at retail. Everything that is sold in
| Safeway was intentionally selected by Safeway to be there.
|
| If you see a product on a Safeway shelf, the company that
| makes that product already got paid--by Safeway. If Safeway
| puts a generic ibuprofen bottle next to a bottle of Advil,
| that's fine with Advil because Advil already got paid!
| Safeway is assuming the risk that those bottles of Advil
| might not sell because everyone buys the generic.
|
| Amazon is different--they sell things themselves, but they
| also offer to run a logistics platform for other folks
| selling things. Folks who use this platform _believe_ (are
| led to believe) that they are going to direct to consumers,
| NOT selling wholesale to Amazon. Amazon purports to be a
| neutral infrastructure provider, like UPS or Verizon.
|
| Now, you can say that these folks are naive for believing
| Amazon about their neutrality, but it is what Amazon said!
| Many of these companies would never have used Amazon for
| logistics in the first place if Amazon had said "we are going
| to use all your data to copy your products and go direct-to-
| consumer ourselves with our copies, including placing them
| above yours in search results." Who would take that deal?
| abacadaba wrote:
| Advil may very well be paying for the privilege of being on
| that shelf. See "slotting fees."
| dangjc wrote:
| Maybe store brands should also be banned.
|
| We allowed this vertical integration in retail when maybe we
| shouldn't. Yeah it shaves some costs, but is probably having
| a huge effect on supplier diversity and margins. If we're
| revisiting the consumer welfare above all doctrine, this
| seems fair to revisit as well.
| rleigh wrote:
| The vast majority of the "store brands" are made by the
| same companies who make the usual branded stuff. In many
| cases, it's the exact same product in a different wrapper
| or container, made on the same production line by the same
| company and the same staff. Sometimes to differentiate the
| product, it might have subtly different ingredients, or be
| of slightly lower quality to differentiate it from a
| "premium" product but still within the quality spec of the
| original product (for products which are binned or have
| batches of varying quality, or where there's variability
| e.g. biscuits which cook differently at different places on
| the conveyor).
|
| I used to work in a big brewery where we made supermarket
| branded beers. It was the same product in a different can.
| Actually, the exact same can, with a custom paint job. It
| was one of the more generic beers, rather than one with a
| taste associated with one of the well-known premium brands,
| but there was zero compromise on quality there. What was
| packaged for the supermarkets was 100% identical to beers
| with our own company name on it.
|
| It's only the cheapest of the cheap "value" stuff which has
| been significantly cost reduced and has compromised
| quality. That's stuff like pastry with a higher water
| content in place of fats, or substituted ingredients such
| as palm oil in place of butter etc. In these cases you're
| paying less, but obviously getting less product for your
| money. That's its own specialised segment. These are often
| made by different companies with their own separate supply
| chains, and possibly living by a different set of ethics...
| There clearly seems to be a market for this type of thing,
| but given the reduced nutritional quality and taste, it's
| not necessarily providing a genuine cost saving.
| philosopher1234 wrote:
| This is a ban against vertical integration no? There are real
| efficiencies (apples entire premise) from owning and running
| the whole stack top to bottom.
| adrianmonk wrote:
| It'd be a ban of any _mixture of_ vertical integrating with
| not vertically integrating. Which in turn makes it tough to
| transition (either direction) between the two.
|
| So, Apple would be allowed to vertically integrate and make
| the chips, hardware, operating system, and applications for
| their products. But they'd have to stop selling Belkin
| chargers alongside Apple chargers at apple.com, and the iOS
| app store would have to contain either only Apple apps and no
| third-party ones or vice versa.
| [deleted]
| jkestner wrote:
| Elizabeth Warren's plan does just this by designating such
| companies as "platform utilities":
| https://medium.com/@teamwarren/heres-how-we-can-break-up-big...
|
| I agree a diverse marketplace is a healthy one, and that
| requires intervention since clearly the initial rules are not
| enough. Some like to pretend that free markets are only
| negatively impacted by regulation, and only positively impacted
| by its participants.
| williesleg wrote:
| Shocking! I say! Good for Amazon, I love them and the Washington
| Post!
| yalogin wrote:
| This is not something unique to Amazon. Everyone does it. Costco,
| Target and even smaller ones do it. However the problem and scale
| is magnified because Amazon has a monopoly on online shopping so
| given their volume they can always undercut everyone else.
| vinniejames wrote:
| "its own sellers" aka its own data, why the surprise here?
| marcrosoft wrote:
| Of course they did, and what's wrong with it? Regular brick and
| mortar grocery stores do the same thing. It's called private
| label.
| csunbird wrote:
| It is actually illegal in EU, I wonder the implications of these
| actions for them.
| malandrew wrote:
| Learn from US businesses and launch same white label product in
| Europe. This avoids running afoul of taking advantage of any
| data on European Amazon sellers.
| yesplorer wrote:
| Is there any Business to Consumer intermediary/platform that
| doesn't do this?
|
| All big retailers (Walmart, Costco, etc) Apple Google Amazon.
|
| Once you sell or distribute through a marketplace where they also
| sell or offer products to the same audience, expect the best
| ideas to be copied by the platform owners.
|
| That's one of the downside retailers have to deal with.
| econcon wrote:
| Who knows if Shopify employees are not doing it privately!?
| Giorgi wrote:
| Is this surprising though? Bank owners do this all the time
| awad wrote:
| A point that I have not seen mentioned while skimming through the
| comments is that the relationships between traditional retailers
| and their brands is one of buyer <> wholesaler (in simple terms,
| I understand there are complexities here) and that in itself is
| different from Amazon Marketplace (as compared to sold by
| Amazon.com).
| davesque wrote:
| This has been happening for years. I personally remember hearing
| people complain about it as far back as 2010 or 2011.
| lisamillercool wrote:
| Amazon is the worst company when it comes to ethics. They don't
| even pay taxes. Horrible company.
| sharemywin wrote:
| why marketplaces are able to compete with their sellers is beyond
| me.
| dec0dedab0de wrote:
| Why sellers would use a market place that is obviously going to
| compete with them is beyond me.
| oehpr wrote:
| You got two answers that are telling you this is good and
| normal, but I have a third one:
|
| They're the only game in town at this point.
| 542458 wrote:
| Because for any individual seller there's a heavy
| short/medium term advantage to using the marketplace in the
| form of dramatically increased reach and simplified
| logistics.
| dazc wrote:
| You could ask why people start businesses that rely on buying
| stuff for x and then selling it for y when that business
| model has already been fully exploited?
|
| There is a supermarket chain called Aldi who's entire
| business seems to rely upon copying branded products yet they
| are lauded for offering great value?
| philmcc wrote:
| Because there's not another marketplace where you can, with
| some effort and very little actual innovation, turn a $5,000
| investment into a six (and sometimes seven) figure a year
| revenue stream.
| sebwi wrote:
| Well, because marketplaces like Amazon have a strategy for
| that: learn from sellers, imitate their products, offer your
| imitated product prominently on your "neutral" marketplace and
| crush the competition with a lower price until they have to
| give up or let themselves be bought [1]. That's nothing really
| new. The difference with Amazon is just the scale.
|
| [1] https://www.thenation.com/article/archive/amazon-doesnt-
| just...
| graeme wrote:
| Every retail store does this.
| timdev2 wrote:
| Many retail stores do this to their vendors. Amazon does it
| to it's "sellers", which are really just a category of
| "customers". As an amazon seller, you pay for the privilege
| of selling through their platform.
| [deleted]
| dagnabbit wrote:
| Retail stores charge manufacturers for shelf space. It's
| often called a slotting fee.
|
| https://en.wikipedia.org/wiki/Slotting_fee
| thebean11 wrote:
| Plenty of vendors pay for shelf space
| sharemywin wrote:
| To me this a form of bundling and should probably be illegal.
| graeme wrote:
| You would forbid the entire existing system of retail? Do
| you have an example of any country that operates this way?
|
| https://en.wikipedia.org/wiki/Wikipedia:Chesterton%27s_fenc
| e
| outside1234 wrote:
| They are doing this with AWS as well.
| rhacker wrote:
| Same thing happens on Etsy. You work hard, get your product out
| there. You are successful. Then, 100 people copy you. And you
| tank. And copyright, trademark, and patent laws all fail you
| miserably.
| mensetmanusman wrote:
| Based on how much Amazon will grow during this pandemic, I
| wouldn't be surprised if they are cut up by government to reduce
| their power to destroy any competitor.
| toasterlovin wrote:
| Amazon is nowhere near having a monopoly on retail.
| oehpr wrote:
| has there been any antitrust activity in the united states
| recently? Like... past 10 years?
|
| Particularly given the current administrations disposition, I
| think pinning your hopes to anti-trust is like financially
| planning around lottery tickets.
| JumpCrisscross wrote:
| > _has there been any antitrust activity in the united states
| recently?_
|
| Yes, lots [1][2]. (I count fourteen cases year to date.)
|
| [1] https://www.ftc.gov/enforcement/cases-
| proceedings/terms/217
|
| [2] https://www.ftc.gov/news-events/press-releases/terms/217
| oehpr wrote:
| I mean, no one's concerned amazon is going to merge with
| someone, my god I hope the FTC would block that. But I
| think the grand parent comment and I are talking about
| breaking up gigantic pre-existing monopolies. Not any
| general activity that can be categorized under "anti-trust"
| netsharc wrote:
| But Trump hates Bezos because Bezos owns Washington Post,
| which publishes articles critical of Trump.
|
| I'd imagine if the administration goes through with the
| antitrust investigations, Bezos would just show up with a
| suitcase saying "Here's my offer to your 2020 reelection
| campaign" (not literally, he could put it through a Super
| PAC) and Trump would say "Art of the deal!" and that threat
| would disappear...
|
| Or Bezos could double down and get a law firm very rich
| trying to prove that the suit would be unfair because it's
| driven by the president's little ego...
| astura wrote:
| I don't know if you count it was antitrust, but there's been
| two blocked mergers in the last ten years: Comcast and Time
| Warner as well as AT&T and TMobile.
| dchyrdvh wrote:
| At the same time, Amazon makes its corporate employees sign non-
| competes and actually sues former employees from time to time.
| sharemywin wrote:
| I guess they just cut their affiliate commissions too.
| mtnGoat wrote:
| ebay did too. :(
|
| i know a number of people that derive decent income from those
| affiliate channels that are scrambling right about now.
| tcarn wrote:
| 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.
| a_wild_dandan wrote:
| Subreddits tend to wildly misrepresent reality due to
| survivorship bias. People generally don't post or noodle
| through such communities when things are going well. That's not
| to say there isn't a significant supplier issue -- just be
| aware of the company you keep. I often forget to be critical of
| the bubbles I inhabit.
|
| In any case, I do wonder if Amazon's treatment of folk like you
| would improve considerably if Amazon had competition. It seems
| they can push you around because there are no consequences to
| pay.
| sacks2k wrote:
| "Subreddits tend to wildly misrepresent reality due to
| survivorship bias"
|
| I disagree. If Amazon had great customer service, there
| wouldn't be a large volume of people complaining.
|
| "In any case, I do wonder if Amazon's treatment of folk like
| you would improve considerably if Amazon had competitio"
|
| I agree with you here. The only two marketplaces that
| actually get traffic are Ebay and Amazon. I've tried them all
| over the years and the rest combined don't even come close.
| arkades wrote:
| > If Amazon had great customer service, there wouldn't be a
| large volume of people complaining.
|
| Volume of complainers is an absolute number. Customer
| service can only reduce the proportion of complainers. If
| you have 50 complainers on 100 customers, bad customer
| service. If you have 50 complainers on 1,000,000 customers,
| good customer service.
|
| You can conclude nearly nothing based on the absolute
| number of complainers in isolation.
| toasterlovin wrote:
| As a counterpoint, we regularly have Amazon reimburse us for
| thousands of dollars of merchandise when they lose our products
| at their warehouses. And they reimburse us for what we would
| have netted had we sold the product, instead of what the
| product cost us. It's been a great arrangement so far.
| WFHRenaissance wrote:
| Good. Once Amazon has gobbled up all competition, we can have one
| reliable place to buy every thing we'll ever need. All detractors
| are impeding on the approach of utopia.
| acka wrote:
| Let's call those happy customers the Eloi, and call the Amazon
| employees (who are by then manufacturing everything) the
| Morlocks. See where this is going? I for one don't want to be
| living in that timeline.
| mlcrypto wrote:
| Invent and Simplify Leaders expect and require innovation and
| invention from their teams and always find ways to simplify. They
| are externally aware, look for new ideas from everywhere, and are
| not limited by "not invented here." As we do new things, we
| accept that we may be misunderstood for long periods of time.
| Upvoter33 wrote:
| Any seller will do this, it is natural. Watch how WholeFoods for
| years has replaced successful independent brands with "365"
| competitors. Any seller will act this way; only regulation will
| prevent it.
| SlowRobotAhead wrote:
| Regulation would not prevent Whole Foods and "some independent
| company" sharing data and producing these white label products
| to be sold exclusively at Whole Foods.
|
| This very easily defeated regulation is a perfect example why
| they aren't a silver bullet. Throwing your hands up and saying
| "just make government fix everything" isn't realistic, there is
| overhead and cost and bad precedent in that.
| thunkshift1 wrote:
| This was banned by india in december. It got a lot of press about
| 'uncertainty' when that happened.
|
| https://www.cnbc.com/2019/02/05/amazon-how-india-ecommerce-l...
| sh1ps wrote:
| 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...
| kyrra wrote:
| Walmart was pushing its vendors (3 years ago) to not host on
| AWS.
|
| https://www.cnbc.com/2017/06/21/wal-mart-is-reportedly-telli...
| crazygringo wrote:
| This doesn't pass the smell test for me at all.
|
| First, Amazon has no idea whether you run your whole business
| on AWS or only 5% of it. Second, different businesses have such
| vastly different computing requirements, which make up
| drastically different percentages of budgets, that there is
| virtually no signal here to figure out profits.
|
| You're going to be _far_ better off just looking at publicly
| available data -- funding, employees, pricing on the website --
| and having a business analyst put them together.
| [deleted]
| olivermarks wrote:
| Anti trust and anti monopoly oversight is urgently needed. Amazon
| is growing like a rapidy mutating weed on coronapocalypse fallout
| and the centralization is rapidly getting out of control imo.
| https://slopeofhope.com/2020/04/locking-in-amazon-gains.html
| acwan93 wrote:
| Sometimes I wonder if Shopify's long-term plan is to do something
| like this.
|
| It's probably the leading direct-to-consumer platform out there
| right now, it's touted sometimes as the anti-Amazon. The leading
| D2C brands I've seen are on there (Allbirds, Atoms, Untuckit) as
| well as random drop shippers. Shopify is also expanding into a
| fulfillment network too: https://www.shopify.com/fulfillment
| toasterlovin wrote:
| I think they _want_ to do something like this. The problem is
| that Shopify has zero traction with consumers. Until they solve
| the problem of getting consumers to search for products on
| their platform, they 'll have no success. That's a tall
| mountain to climb.
| acwan93 wrote:
| Yeah I mean, the brands themselves have generated a lot of
| buzz. But the average consumer still doesn't know what
| Shopify is.
| immy wrote:
| Whatever their plan is, this type of behavior is good for
| Shopify carving out their growing niche serving up strongly
| branded products.
| bhouston wrote:
| Maybe. But I think the first step is that Shopify creates a
| means of unified discovery across its many merchants. Maybe not
| quite a unified store front like Amazon, but maybe a unified
| search listing, like Google Shopping. Probably also get into
| recommendations across stores as well. There is a lot of
| related opportunities here once Shopify starts to link data and
| search and recommendations (and eventually ads) across their
| various stores.
| xibalba wrote:
| This is completely unconscionable. I've reached the tipping point
| in my opinion of Amazon re: antitrust. Set the dogs loose on
| these bastards.
| Cactus2018 wrote:
| Quick link to AmazonBasics
|
| 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...
| matteuan wrote:
| AmazonBasics is just one of Amazon's brands. Take a look here:
| https://www.businessinsider.com/amazon-owns-these-brands-lis...
| Cactus2018 wrote:
| "Amazon owns more than 80 private-label brands" !
| g8oz wrote:
| Relevant to this: Lina Khan's influential analysis - "Amazon's
| Antitrust Paradox" https://www.yalelawjournal.org/note/amazons-
| antitrust-parado...
| so_tired wrote:
| Important line from the article
|
| > a practice at odds with the company's stated policies...
|
| > .. as stated to congress
| SlowRobotAhead wrote:
| You want to start a discussion about company stated policies
| and how each person feels they do or do not live up to them?
| That could go on for quite awhile!
|
| edit: it was mostly a joke, calm down.
| salawat wrote:
| You're either missing the point or strawmanning, I'm not sure
| which.
|
| In speaking with Congress, they're stating to everyone that
| they are there to act as a platform for third parties.
| They're a "pass-thru" service.
|
| That implies that while metadata may be being collected, you
| shouldn't be looking at it, as it isn't "yours". It would be
| like a cloud provider going into business undercutting their
| client's because they weren't savvy enough to encrypt their
| business records. Or the post office going through your B2B
| mailings, figuring out your footprint, them becoming a
| competitor.
|
| You have one job. That's it. Once you start abusing your
| access to your seller's transaction data to figure out where
| to or whether to diversify into their vertical, there is a
| fundamental breach of trust, and a very reasonable case to be
| made in having exploited something you shouldn't be.
|
| That's the Hobbesian Leviathan for you; you don't need all
| those little businesses anyway!
| salawat wrote:
| So lying to the Congress, eh? Great. Yet another example of how
| the system can't muster itself to dealing with actual threats
| to it's integrity.
|
| Just get big enough, and you can lie in front of everyone
| without penalty it looks like.
| archgoon wrote:
| 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.'
| whoisjuan wrote:
| 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.
| interestica wrote:
| 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.
| stormdennis wrote:
| Maybe they do but that doesn't make it right. It's predatory.
| tomohawk wrote:
| 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.
|
| https://www.marketplacepulse.com/articles/amazon-is-a-monopo...
| hlmencken wrote:
| 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.
| Cactus2018 wrote:
| >Mossimo
|
| Interesting
|
| https://en.wikipedia.org/wiki/Mossimo#IPO_(1996)_and_relatio.
| ..
|
| >On March 28, 2000, Mossimo, Inc announced a major, multi-
| product licensing agreement with Target stores, for $27.8
| million.
|
| >In 2017, Target underwent a makeover, introducing new
| smaller lines and eliminating bigger billion-dollar lines,
| including Mossimo.
|
| >Target distanced itself from Mossimo amid Mossimo
| Giannulli's alleged involvement in the 2019 college
| admissions bribery scandal, saying that Target had not been
| involved with Giannulli in over a decade
| whoisjuan wrote:
| I mean. That's what I meant. Upfront in the sense that they
| compete with their suppliers by having a lot of brands that
| are hard to distinguish as white-label brands by Target.
| xbmcuser wrote:
| To me that is not a problem as long as they are not giving
| their own products better placement. If 50 brands of
| cornflakes and in them target has a 10 white-label brands
| that is not a problem but if all 10 white-label brands are
| put in front of other brands ie first few in search results
| then it is a problem.
| closetohome wrote:
| In all seriousness, not giving your own brands prominent
| placement would be ignoring the benefits of vertical
| integration, leaving money on the table, and violating
| your fiduciary duty to stockholders.
| 1propionyl wrote:
| > violating your fiduciary duty to stockholders
|
| The idea that corporate directors (of whichever kind)
| have an _legal_ obligation to maximize profits
| /shareholder value is a myth. Taken directly from Alito's
| (non-dissenting) opinion in Hobby Lobby:
|
| "While it is certainly true that a central objective of
| for-profit corporations is to make money, modern
| corporate law does not require for-profit corporations to
| pursue profit at the expense of everything else, and many
| do not do so."
|
| Additionally, even if there _were_ such a requirement, it
| would be toothless. The corporate directors of a company
| facing criticism from its shareholders that it is not
| maximizing profits (in the short-term) could simply
| retort that they are pursuing a strategy that maximizes
| profits in the long-run, and that investors should look
| elsewhere for short-term gains.
|
| As a practical example, consider any company that pursues
| more environmentally sound practices, or tries to source
| materials more ethically. By doing more than the bare
| minimum, they are surely cutting into short-term profits,
| however they may in the process be building a more
| resilient and popular brand that profits more in the
| long-run.
| eecc wrote:
| Frankly all that distinguishes these "brands" is
| literally just the packaging. How's this better than
| planned economy where every item is just labeled with its
| dictionary definition?
|
| I mean seriously, if this is end-game capitalism what's
| the added value?
| corpMaverick wrote:
| Upfront with the suppliers. Not necessarily with the
| customers.
| thoraway1010 wrote:
| 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?
| asperous wrote:
| Major retailers buy and sell their product line data from
| neilson and others. I worked on a project with one of them so
| I know first hand. So the idea that they don't use seller
| data to market their own products has to be false.
| thoraway1010 wrote:
| And amazon sellers can sell their data (and do sometimes)
| as well. All that is fine.
|
| Remember, for major retailers, a) THEY are the seller in
| most cases and b) in most cases they get mfg's to agree to
| whatever is going on in the agreement UPFRONT.
| TimSchumann wrote:
| This comment is based on a misreading of the very testimony
| you're referencing. As quoted in this CNBC article.
|
| https://www.cnbc.com/2019/07/16/amazon-tells-house-it-
| doesnt...
|
| "Nate Sutton, associate general counsel at Amazon, told
| lawmakers the company doesn't tap data from individual third-
| party merchants to determine what new products to create."
|
| Of course they don't use data from individuals, they use all
| of the data, in aggregate, from everyone including
| themselves.
| LoSboccacc wrote:
| and they don't even have to use merchant sales data to
| determine what product to go after, just search click
| troughs are enough for that.
| thoraway1010 wrote:
| Amazon has promised individual sellers it would not use the
| data for their products to market against them (not
| individual buyers).
|
| Despite the ludicrous lengths Amazon goes here to say there
| were multiple sellers and so this data was aggregate, we
| all understand (and amazon did too) that if you generate
| statistics such as median sale price per month / day etc
| where 99.95% of the data comes from one seller, you have
| the data from that seller.
| TimSchumann wrote:
| > Amazon has promised individual sellers it would not use
| the data for their products to market against them (not
| individual buyers).
|
| Again, there's that word. Individual.
|
| They get off on a technicality with that comment to
| congress. The second you have even 0.05% (Your example,
| not mine.) of any category occupied by a second reseller,
| you're no longer targeting individuals -- you're entering
| a 'product vertical'.
|
| Amazon does exactly what you're claiming they do not.
| malcolmgreaves wrote:
| If they aggregate data from individuals, they're using
| the individual's data. They didn't get off on a
| technicality, they're simply lying.
| dd36 wrote:
| How would Amazon not use sales data of comparable products to
| evaluate the launch of a new white label product?
| TLightful wrote:
| By breaking up Amazon.
|
| This whole issue stinks of monopoly.
| archgoon wrote:
| Amazon agrees that what is being reported goes against
| their policies.
|
| '"However, we strictly prohibit our employees from using
| nonpublic, seller-specific data to determine which private
| label products to launch." 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.'
| jonny_eh wrote:
| > seller-specific data
|
| Making decisions on the aggregate data doesn't violate
| this policy.
| sokoloff wrote:
| That carefully phrased language could be technically
| accurate but still allow them to use seller-agnostic
| information about the market for batteries or speaker
| wire to decide to launch Amazon Basics batteries or
| speaker wire.
|
| (Which by the way, I'm totally fine with, because there's
| no reasonable way to prove you're not doing it and any
| brick-and-mortar retailer is almost surely doing it as
| well.)
| t0mas88 wrote:
| It's also ethically fair game to base your decisions to
| launch a product on the amount of consumer interest the
| category gets. Everyone does that.
|
| What they promise not to do is take a look at seller
| specific data. That makes sense because it won't get them
| much extra compared to looking at categories, and the
| sellers ethically claim it's their data.
| thoraway1010 wrote:
| Actually - as the article described, they DO spend a lot
| of time looking at SPECIFIC seller data for unique
| products because it gives them LOTS extra that category
| details don't provide.
| dang wrote:
| Could you please stop using allcaps like this? This is in
| the site guidelines: _Please don 't use uppercase for
| emphasis. If you want to emphasize a word or phrase, put
| asterisks around it and it will get italicized._
| https://news.ycombinator.com/newsguidelines.html.
| [deleted]
| thoraway1010 wrote:
| Amazon enticed sellers by promising them they would not do
| this. They literally testified before congress they would
| not do this.
|
| My comment got voted to zero and negative initially - does
| HN not understand that lying DAMAGES even capitalistic
| economies and functioning markets?
|
| "why not do this?" - because you promised you would not.
|
| This is stuff we teach 6 year olds - but apparently the
| most rudimentary form of ethics is too much for amazon.
| davidgh wrote:
| > 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.
|
| I can't understand this at all. Retailers create in-house
| brands all the time. Do they somehow make decisions of which
| products to create in a black box? How would they even do
| that?
|
| If you go into the Walmart pharmacy, their store-brand
| equivalents are full of statements such as "Compare to the
| active ingredient in Advil".
| thoraway1010 wrote:
| Sellers at walmart
|
| a) actually sell their product to walmart, even the branded
| product is owned, priced and managed by WALMART. So there
| is much less SELLER specific data to datamine.
|
| b) sellers to walmart AGREE that the data on products
| priced, sold, and promoted by walmart (even branded one)
| belongs to walmart, and in many cases the seller has to pay
| extra if they want day/store level detail on sales. So in
| most cases it is a very upfront relationship, and walmart
| takes a lot more risk in pricing, promoting etc.
|
| Here Amazon has enticed sellers by reassuring them that in
| CONTRAST to target, Amazon will NOT use the data they
| provide amazon to market against them AND sellers give
| amazon a lot more "seller" data because the sellers are
| often doing their own price management etc etc.
| whoisjuan wrote:
| I mean, let's be objective for a minute here. Do you really
| believe that Walmart, Target, Costco, Kroger, etc, are more
| ethical with their suppliers than Amazon?
|
| Let's not forget that many of these large retailers have
| moved to the practice of taking up to 90 days to pay their
| suppliers. 90 DAYS! That's three months before you see the
| money of the product you sold through their channels. And
| they do this because they simply can.
|
| I believe that there's not a single retailer that doesn't
| leverage its distribution advantage to squeeze their
| suppliers. If you're not Coca Cola, PepsiCo, Unilever,
| Procter and Gamble or Colgate Palmolive, you have little to
| no room for negotiation.
| thoraway1010 wrote:
| I've done consulting for small business distributing into
| major stories.
|
| Other stores are very very UPFRONT on what they will do.
| Many make the small mfg sign an agreement that not only
| will the store have all the data, but the mfg will need to
| pay the STORE if they want the data.
|
| The difference here is that a) it is all upfront and b) the
| mfg can make an informed decision - is this worth it.
|
| If you need store / day detail on sales because you are
| running promos and in-store marketing vs just being a low
| cost volume seller - all affect your view of this.
|
| Finally, in grocery retail - once you have the order and
| deliver, you DO get paid regardless of whether product
| sells. This is an important positive even selling through
| Target in some cases especially with more perishable goods.
| Amazon as a seller you can't plan as well - their alog or
| someone else paying for promo could cut your demand in half
| overnight.
|
| Additionally retail stores actually drive demand / discover
| ability when they purchase your product in a way amazon
| often does not.
| empath75 wrote:
| > Finally, in grocery retail - once you have the order
| and deliver, you DO get paid regardless of whether
| product sells.
|
| It's been quite a long time since I worked in the grocery
| business, but I don't think this is accurate. A lot of
| vendors stock their products themselves or use food
| brokers that do it, and they are on the hook for expired
| and returned product. And there was a shitload of bribery
| and corruption happening to steal shelf space and end
| unit space from competitors. It's a surprisingly cut
| throat business.
| TimSchumann wrote:
| > The difference here is that a) it is all upfront and b)
| the mfg can make an informed decision - is this worth it.
|
| You sign the same deal when you sell on Amazon, probably
| even signing away more rights. I'm not sure I haven't
| read the full EULA when you sign up to sell.
|
| > Amazon as a seller you can't plan as well - their alog
| or someone else paying for promo could cut your demand in
| half overnight.
|
| This is about the only thing you've said I agree with.
| But it's not due to lack of data, it's due to barrier to
| entry with retail sales you have less competition. Right
| for the wrong reason here.
|
| > Additionally retail stores actually drive demand /
| discover ability when they purchase your product in a way
| amazon often does not.
|
| Amazon drives way WAY more discoverability than any
| retailer.
|
| Pretty much your entire argument contradicts real world
| experience, common sense, and actual reality from what I
| know of the situation. I can tell you for a fact your
| assertion that 'Amazon doesn't do this' everything you're
| saying is 100% false.
| thoraway1010 wrote:
| Tim - have you actually ever reped / managed distribution
| into retail at the moderate scale at least?
|
| Do you have a reasonably high volume ($1M+ sales) amazon
| account to compare to?
|
| I just ask because for such strong opinions "everything
| you're saying is 100% false" you don't seem like you have
| actually worked with businesses in this way.
|
| Beleive it or not, you can actually talk to real human
| beings at your local retail stores. And yes, you can talk
| to real people at amazon, but if issue is outside their
| box (on seller side) you get little mercy. If inside box
| some of the treatment is amazing (amazon payments for
| goods they show as lost by them as a sale with no return
| risk)
| gamblor956 wrote:
| _Amazon drives way WAY more discoverability than any
| retailer._
|
| This is completely false. Amazon provides significantly
| less discoverability than a retailer. With a retailer,
| you get a product that actually shows up in front of
| people's eyeballs, and the ability to provide in-store
| promotions to attract customers, and, most crucially, the
| store _lets you know_ how the promotions perform. A small
| minority of retailers make you pay for this data, but
| most don 't because they _want_ products to sell through.
| Many stores will even work with new brands to promote
| their products, such as (temporary) eye-level product
| placement, end-of-aisle placement, special displays, etc.
|
| Source: Before going in-house I used to rep manufacturers
| of all sizes from startups to billion-dollar behemoths
| selling to major, regional, and local retail chains.
| Grocery stores are the best at working with brands (but
| also the fastest to drop products that don't sell),
| Target is about average, and Walmart was the worst at the
| time though I hear they've gotten better.
| thoraway1010 wrote:
| As a non shlock product seller you are much more
| comfortable in local retail I think? I just thought
| retail was easier to actually talk to real people.
|
| The schlock sellers I think are more expert in the amazon
| game (image / product swapouts and seller targeting,
| review spiking games, competitor flag and return / hazard
| attacks etc). So much BS and so little real recourse -
| the scale of marketplace must be nuts.
| fastball wrote:
| Can you link to where AMZN has said this?
| woodgrainz wrote:
| "Nate Sutton, associate general counsel at Amazon, told
| lawmakers the company doesn't tap data from individual
| third-party merchants to determine what new products to
| create."
|
| https://www.cnbc.com/2019/07/16/amazon-tells-house-it-
| doesnt...
| grafporno wrote:
| Ah, the hyper-specific dementi? Doesn't tap data from
| _individual_ third-party merchants.
| bitxbitxbitcoin wrote:
| No specific merchants... It's just from the aggregate
| data from third-party merchants. And I bet that data is
| "anonymized" too.
| TimSchumann wrote:
| And you would win that bet.
| TheCoelacanth wrote:
| Paragraph two of the article
|
| > The online retailing giant has long asserted, including
| to Congress, that when it makes and sells its own products,
| it doesn't use information it collects from the site's
| individual third-party sellers--data those sellers view as
| proprietary.
| ardy42 wrote:
| > 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.
| replicatorblog wrote:
| That is largely _not_ the case. I spent ten years making
| private label medical devices for CVS, Kroger, Target, and
| dozens of other stores.
|
| There tend to be specialist manufacturers who fill the store
| brand niches. E.g. in pharma, close to 90% of the pills,
| tabs, and liquids sold in front of the pharmacy counter are
| made by one company, Perrigo, whose entire model is
| predicated on being a store brand supplier.
|
| I don't think Kimberly Clark makes the store brand paper
| products, nor does P&G make the store brand beauty/cleaning
| supplies.
| shadowwolf007 wrote:
| I work in this industry as well. That said - private label
| is a small (but growing) area in the US markets, so it's
| hard to make a generalized statement of how much someone
| does or does not participate.
|
| Many retailers are beginning tie production of private
| labeled products in with being the captain of a category -
| which begins to create incentive for companies to start to
| pursue these private label opportunities.
|
| K-C and P&G are two examples of companies who largely
| resist the private label trends in the US - you could
| counter with ConAgra and Treehouse.
|
| A lot of that has to do with the product and what-not, of
| course.
|
| [ed: fixed a misspeak]
| joezydeco wrote:
| And I can give an opposite case. I used to work for a large
| 1st-tier manufacturer of consumer batteries (hearing aid,
| AA, 9V, etc etc).
|
| We were constantly competing with the other manufacturers
| for the Wal-Mart, Walgreens, CVS, etc white label brands.
| It was increased volume for our plants and they would
| usually suck up surplus supply.
|
| The catch was that your contract was continually up for
| renewal and you had to beat the others on price and other
| criteria. After all, nobody else would know that the rack
| at Wag's was half-bunny and half-coppertop, right?
|
| It was also a headache because defective parts and customer
| complaints counted against you hard. We actually tested our
| white label products more than the name brand SKUs.
| stcredzero wrote:
| _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.
| balls187 wrote:
| Insurance companies are already offering discounts for using
| their apps while in car.
| stcredzero wrote:
| _Insurance companies are already offering discounts for
| using their apps while in car._
|
| I was debating on whether I should include mention of these
| apps. Here's the thing about that: The data available to
| these apps is _nothing_ compared to the data available to
| Tesla. Tesla can figure out how often you get close to
| bumping into something, exactly how far, how fast you were
| going, and what the lighting /weather conditions were like
| at the time. That data is orders of magnitude better than
| the stuff coming out of the app.
|
| It's very analogous to iOS app makers competing with in-
| house Apple iOS apps. It's hard to compete, when your
| competitor controls the APIs.
| balls187 wrote:
| I agree with your point.
|
| I think the insurance companies are doing what they can
| to compete but wont be able to match the platform
| builders offering.
|
| Perhaps they look at licensing data from other platforms
| like Ford, Yota, etc.
| StillBored wrote:
| All the things you name are available to a phone app as
| well. Particularly, if it has enough penetration to be in
| the vehicles near you. Local weather + data aggregation
| from all the insurance companies apps and suddenly about
| the only thing they don't have is whether you were
| looking at the road, and the condition of your tires and
| other vehicle specific metrics. Sure the GPS/accel data
| might be off a few percent vs the car but does that
| matter?
|
| (BTW, Assuming a deal with your credit card company, they
| probably can approximate your tire age too).
| stcredzero wrote:
| _All the things you name are available to a phone app as
| well._
|
| Only 'kinda'. You might get 1 camera feed, and you can
| see what the weather report was for the area. Tesla has
| something like 8 camera feeds, and they can tell if
| visibility was compromised because the other car situated
| at 7-o'clock to the rear was in a building's deep shadow.
| The app could only kinda get that if one were lucky.
|
| _suddenly about the only thing they don 't have is
| whether you were looking at the road, and the condition
| of your tires and other vehicle specific metrics_
|
| That and a lot more! Also, with far superior granularity,
| and with fewer data quality problems.
|
| _(BTW, Assuming a deal with your credit card company,
| they probably can approximate your tire age too)._
|
| Again, mostly. I would agree that the apps could compete.
| They're competing at a significant disadvantage, though.
| freepor wrote:
| There are insurance companies who already sell trackers that
| plug into your car's OBD-2 port and have onboard hardware so
| that the insurance company sees your acceleration, handling,
| sudden braking, times you drive, miles you drive, etc.
|
| Right now, very safe and low risk drivers can use these
| companies to get discounted insurance.
|
| Eventually, every safe driver willing to install these
| trackers will do so for the lower insurance rates, leaving a
| much higher risk pool with the non-tracking insurance plans,
| and it will become very expensive to not be tracked by your
| car insurance company.
| stcredzero wrote:
| I know. So again here's the heart of my point: Even with
| the OBD-2 port, the data available to these apps is nothing
| compared to the data available to Tesla. Tesla can figure
| out how often you get close to bumping into something,
| exactly how far, how fast you were going, and what the
| lighting/weather conditions were like at the time. That
| data is orders of magnitude better than the stuff coming
| out of the app.
| Spivak wrote:
| Sure, but what's stopping any other car manufacturer from
| buying and using the same sensor kits? Look, I get that
| you can't get the same data with a 3rd-party kit but if
| you're an insurance company you're gonna be working with
| car manufacturers anyway.
| stcredzero wrote:
| _Sure, but what 's stopping any other car manufacturer
| from buying and using the same sensor kits?_
|
| Nothing, though I'm guessing they will be far behind for
| a year or so even after they deploy. (Unless that team is
| super competent, and they have absolute management
| backing.)
|
| _Look, I get that you can 't get the same data with a
| 3rd-party kit but if you're an insurance company you're
| gonna be working with car manufacturers anyway._
|
| It completely changes the dynamic of the business. One
| won't be able to compete, except as a manufacturer
| partner, and not all manufacturers will be equal. It will
| limit choices to consumers, and very strongly drive
| consolidation. I'm not saying only Tesla will be able to
| do it. What I'm saying, is that the nature of the
| business will change massively, in a way where customers
| will wind up with fewer coices.
| jonny_eh wrote:
| The difference is aggregate vs specific data. If insurance
| companies use the cars' data to change their policies in
| aggregate, there's no problem. Meaning, if they discover that
| cars of a particular brand have more accidents, they can
| raise premiums on owners of that brand of car. On the other
| hand, determining that YOU drive really fast, should NOT
| trigger a higher premium.
| lotsofpulp wrote:
| It should absolutely trigger a higher premium if driving
| faster means higher losses. Otherwise the people driving
| slower are subsidizing the risk that the people driving
| faster are taking. How is that fair?
| yyy888sss wrote:
| In the UK young people can get cheaper premiums if they
| install a tracker which monitors speed, driving patterns
| etc. They've had this for decades.
| malandrew wrote:
| 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.
| ProAm wrote:
| Except Amazon disallows and punishes you for selling your
| product cheaper on a different platform.
| toasterlovin wrote:
| This is common practice in the retail industry. Large
| retailers want to ensure that they can offer their
| customers the lowest price on all of the products they
| sell.
| bcx wrote:
| 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.
| egl2020 wrote:
| Shopify? What's a product that Shopify sells other than its
| ecommerce platform?
| danielmichaelni wrote:
| Shopify has an App Store. I'm assuming they can copy
| popular apps from there.
| mengibar10 wrote:
| This questionable business practice is neither new nor
| limited to online companies. Brick and mortar companies like
| Costco do have their own products competing from other
| vendors, and I am sure they analyze sales data before jumping
| on selling their own.
| asdf21 wrote:
| Isn't that exactly what the grandparent comment said?
| [deleted]
| libertine wrote:
| I think the biggest issue isn't the "copy product by
| leveraging data", but more like, their products play by a
| different set of rules.
|
| They could copy products and launch them abiding by the same
| guidelines, policies and everything else.
|
| That's not the case, and that's where the unfairness comes to
| play: Amazon plays on their market place by a different set
| of rules.
|
| It's not only Amazon. Google, Apple, and so on. The question
| starts to arise, if they want such massive platforms and play
| on such marketplaces, they must obey their own guidelines,
| else they are either stripped from the playground or someone
| else should own the play ground.
| stcredzero wrote:
| _if they want such massive platforms and play on such
| marketplaces, they must obey their own guidelines, else
| they are either stripped from the playground or someone
| else should own the play ground._
|
| So here's a question: Is a store really a marketplace? It
| seems to me that Amazon, Target, Macys, etc, do a lot of
| curation and editorial work with regards to standards of
| production and marketing for items in their stores. Isn't
| that more akin to publishing?
|
| I think the grey area and critical zone is this: Should a
| company be allowed to advertise their ecosystem/playground
| as akin to a "marketplace" when what's really happening, is
| that they are tightly controlling the product and
| harvesting the information for themselves? Seems like a
| bait and switch to me! ("Your margins are our
| opportunities," is the most fundamentally aggressive
| business statement I can possibly imagine, and Jeff Bezos
| said it!)
|
| Apple, Amazon, and YouTube all seem to fall into this
| general pattern: A "marketplace" or "ecosystem" which is
| less bazaar and more their tightly planned cathedral.
| "Partners" who are put upon, data-analyzed, and sometimes
| cannibalized. This pattern seems to be very widespread, and
| it only stands to reason, given the tremendous increase in
| the ability of companies to leverage technology to harvest
| such data in their own playgrounds.
| libertine wrote:
| I understand your idea, but I still think they are and
| should be defined as marketplaces, with a scrutiny any
| marketplace should get.
|
| The first reason is, Amazon isn't doing much curation (if
| any), due to their size they can't do proper curation,
| and bots are terrible at it (either based on keywords or
| reporting). This is proven by counterfeit items being
| sold, listings being stolen/manipulated, biased report
| systems.
|
| Then Amazon claims they aren't liable for the products
| sold - the customer belongs to Amazon (you can't even
| have access to their names anymore), the listings belong
| to Amazon, everything except what arrives at the door.
|
| At last, Sellers pay for the product advertising Amazon
| does, it's called a Referral Fee (ranges from 8% to 15%).
| In fact, the Seller pays for everything (and they should,
| yet the amounts are up for discussion).
|
| So they have all the symptoms of a marketplace, yet
| Amazon plays what ever role is more suitable for them.
|
| I only think they should be enforced the rules of a
| market place in any developed place in the world.
|
| No real private marketplace would be open if they were
| selling counterfeits. Even if they sold legit products as
| well, until they purged everything counterfeit they would
| not be open, and they'd pay fines for it.
|
| I bet if any public Health/Goods inspection force would
| be deployed on ANY amazon warehouse, they'd find shady
| shit. But such public organizations don't have the
| tools/protocols to do what they do in the real world.
|
| I agree with you when you say, this isn't limited to
| Amazon.
|
| For example, why can't we get the full data from the
| customer that purchases from us? Why can't they be our
| customer on Amazon? Amazon hoards everything, and we get
| the scraps.
| odysseus wrote:
| What kind of "full data" would you want from the
| customer? Earlier, you mentioned their name. Why can't
| the customer's transaction be as anonymous as possible,
| if they choose to be?
|
| It seems as if Amazon, likely prodded by the GDPR and
| CCPA, is limiting the personal information they share
| with third parties. I think that's a good thing, for the
| consumer at least.
| libertine wrote:
| That's a slippery slope: is the person the seller
| customer, or Amazon's customer?
|
| Their name was an example of something required to
| provide feedback, make amendments, or any kind of
| engagement that's required with that customer.
|
| Anonymity is one of the reasons review manipulation
| thrives on Amazon.
|
| Honestly I doubt it was due to GDPR/CCPA, or user privacy
| concerns, and more turning FBA into a pipeline of
| homogeneous suppliers that race to the bottom.
| [deleted]
| gigatexal wrote:
| They own the platform which means they can see the data. This
| seems like a natural evolution. If you don't own the platform
| the platform owns you.
| tjholowaychuk wrote:
| They've been doing this for ages, it's nothing new haha
| sacks2k wrote:
| 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?
| marcosdumay wrote:
| You know, at some point people will discover that "online
| market" is something important enough for governments to
| regulate.
| sneak wrote:
| I think this is just a special case of "online
| communication". It's illegal for the phone company to
| arbitrarily suspend your service for what (legal things) you
| say over the phone.
|
| It's legal for Twitter or Amazon or Etsy or Twitch or Discord
| or YouTube.
|
| I recently got suspended by Twitter after using it daily for
| 12 years and in addition to not being able to send new tweets
| or DMs (or do data backup/takeout), I also can no longer see
| even the usernames (or the message history) of the people I
| was communicating with in DM. For many of them, that was my
| _only contact info_ for them.
|
| I am becoming increasingly convinced for the need to regulate
| arbitrary suspensions for communications platforms (including
| sales/business platforms, that's just a special case of
| communication). The current emergency situation really woke
| me up to the huge dangers involved.
|
| GP lost his business, which is sad and tragic and unfair. I
| envision that in disasters or emergencies, eventually someone
| is going to lose their life.
|
| Imagine if the mobile phone or cable company could
| arbitrarily suspend your connectivity because you left bad
| reviews online about their service.
|
| I recently did a deep dive on how these sorts of centralized,
| censorship systems pose an inherent and existential threat to
| safety and human rights in an emergency/pandemic/war that is
| non-obvious in peacetime:
| https://sneak.berlin/20200421/normalcy-bias/
|
| It's truly terrifying to me that these systems (among them
| Amazon, Discord, Twitter, YouTube, Facebook, Instagram) have
| final say, practically, over who gets to speak to whom in a
| lot of cases in society, or what is allowed to be said. These
| companies (and the government in their jurisdiction) are
| entirely unaccountable for this terrible censorship power
| they wield, and it is only a matter of when, not if, it will
| be horribly abused. TFA is just one important facet of this
| danger.
| aleksaxyz wrote:
| Can I see the laws that affect phone companies and free
| speech? That's an interesting observation, and does
| parallel Twitter/YouTube/etc, so I'd like to see the
| wording for it.
| sneak wrote:
| I think that the relevant laws are those related to the
| phone/cable companies being public utilities (and thus
| explicit, by-design, state-permitted monopolies or
| duopolies). They aren't allowed to wiretap them (because
| communications privacy was a bigger deal to legislators
| pre-internet) and have to provide service to all comers
| (ostensibly in exchange for being a monopoly-by-design).
|
| From my limited understanding, this regulation forcing
| them to offer service (as a utility) to 100% of the
| market is coordinated on a state-by-state basis by the
| public service/public utilities commission.
|
| https://en.wikipedia.org/wiki/Public_utilities_commission
|
| (Fun fact, I learned this at a young age because my dad
| ran a paging/voicemail service out of the basement of our
| single family, suburban residential home when I was about
| 10. We were the only house on the block with dozens of
| trunk lines coming into our little bungalow; but by law
| they had to do it if you ordered it. Try that today with
| internet access from a cable company, ha! It's all but
| impossible due to TOS to run an internet business at a
| residential address now. Hosting for-profit services with
| the internet you pay for or reselling the service in any
| way means you get instantly unplugged.)
|
| Sorry I don't have a direct link to the all-comers bit of
| PUC/PSC regulation, but this should give you a starting
| point for research.
|
| The not-allowed-to-tap-phones bit is a federal law:
|
| https://www.law.cornell.edu/uscode/text/18/2511
|
| It's sort of insane how provider-wiretapped has been the
| all-encompassing default for almost all of the largest
| DM/1-to-1 communications systems in the world: SMS,
| WeChat, Facebook, VK, Instagram, Gmail. WhatsApp and
| iMessage are outliers in this regard. Almost all popular
| new entrants like Slack and Discord are provider-tapped,
| too.
|
| This is a relatively recent development in our society's
| relationship with electronic communications. Reading
| content by the provider used to be illegal as fuck.
| joyj2nd wrote:
| I had a few bad experiences with Amazon.
|
| 1st I got an item from a fraudulent 3rd party shipper. Did not
| get my money back and amazon claimed they don't know his
| identity
|
| 2nd Packet got stolen. Amazon claimed based on statistical
| analysis this packet is assumed to have reached me. Delivered
| to "mailbox". Paid with CC, made a charge back, closed my
| account.
|
| You know what is a pretty good competitor? eBay. As a business
| it may be terrible, but as a market place it is quite good.
| seppin wrote:
| eBay charges almost 10% for all goods sold, that's larceny.
| TimSchumann wrote:
| > You know what is a pretty good competitor?
|
| Competitor on what vector? Speaking from a US-centric
| viewpoint here, but my thoughts;
|
| * Distribution & Warehousing - Walmart & Costco
|
| * Sales & Advertising - Google & Facebook
|
| A few notable online storefronts that are independent and I
| use frequently are B&H Photovideo and Newegg. Realistically
| though the options I listed above are the only companies I
| see having the scale to compete with Amazon at anything, and
| even then they're an order of magnitude behind. Just my
| opinion, again very US-centric.
| joyj2nd wrote:
| Yes, sorry, I meant from a buyer perspective.
|
| As a side node: I am actually thinking of buying a tiny
| bankrupt travel equipment company. Friends advised against
| it because of "Amazon essentials". I would not sell on
| Amazon but it is a strong argument.
|
| Maybe someone has some words of wisdom regarding to this.
| RandomBacon wrote:
| > bankrupt
|
| What do they have that you want, or what do you think
| you're going to do differently?
|
| Why did it go bankrupt?
|
| If they claim it's only bankrupt because of COVID-19,
| then it must not have been very profitable (if at all) if
| they didn't have enough money to weather out at least 3
| months. So I recommend not accepting that explanation.
| joyj2nd wrote:
| They were "bankrupt" before. They just selling what is
| left of the stock.
|
| I was always impressed by the quality of their products.
| It is a comparatively "old" company, they produce their
| stuff in Eastern Europe, not Asia.
|
| Why they did not sell?
|
| 1. Their webpage looks like from the 90ies
|
| 2. No marketing. I think I can solve this, I also have
| contacts with some small travel agencies. I am sure they
| would be interested in some affiliate scheme.
|
| 3. Has also some niche products where I have contacts in
| the US (Military, dogs etc.)
|
| Biggest problem is to convince the guy to either sell or
| take on partners.
| noizejoy wrote:
| If you're considering entering anything that depends on
| travel right now, you are much braver than me! Respect!
| TimSchumann wrote:
| > It taught me a valuable lesson not to build my entire
| business on someone else's platform.
|
| This sounds eerily similar to what happened to a close friend
| of mine, and that's 100% the right takeaway from the situation.
|
| > 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.
|
| Same as above, different friend, but again Etsy.
|
| > 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?
|
| And that's why I'm in favor of strong individual privacy laws,
| and corresponding enforcement of said laws. Because 'I've got
| nothing to hide' only works so long as your values/goals are in
| line with everyone else in the system you're operating in.
|
| The second that changes, good luck and godspeed.
|
| Thanks for the great read, and... I dunno just validating your
| view of things.
| rightbyte wrote:
| The 'I got nothing to hide' is when discussing law
| enforcement surveilence? It is funny how fear of the "police
| state" is more or less irrelevant now vs early 2000s and
| private companies are the main problem. It is hard to predict
| the future.
| TimSchumann wrote:
| Yeah that may have not been the correct phrase to turn
| there. I guess in this context it's more about personal
| ownership of data. Which at this point in time, is 100%
| trust based with Amazon and 0% tech based.
|
| I don't think that's something people, even many very
| technologically knowledgeable people, are aware of.
| TallGuyShort wrote:
| >> I'm in favor of strong individual privacy laws
|
| I support such laws too, but I wouldn't expect them to really
| change this. I think what we're seeing is more of a monopoly
| problem than anything else, even if violating privacy is a
| part of how they pull it off.
|
| It's very hard to prove that a company that does, in theory,
| have access to data is not storing it or looking at it. Even
| accidentally. I just finished explaining all this to someone
| who freaked out about a Facebook post they saw about how
| Facebook was starting to collect information about everything
| you do off-Facebook. I had them show me what they meant, and
| it appears to just be every app that integrates with Facebook
| comments or allows Facebook sign-in as an option, etc.
|
| The problem is one Facebook naturally got because of it's
| success: everyone has good reasons to want to work within
| their ecosystem. So they get tons of data on everyone. You
| can inconvenience yourself and refuse to ever visit a service
| that might share data with Facebook. But honestly: who's
| going to find that practical and do it? And if Facebook
| ignores the setting and "accidentally" captures all this
| data, and I suspect they're misusing it, how do I really get
| an investigation and more than a slap on the wrist for them?
|
| It's messy to be a platform that provides a service and a
| consumer of that service that competes with your other
| consumers. At a previous job of mine we made a conscious
| decision not to do that for fear it would hurt our core
| business to ruin relationships with our customers. The
| problem here is Amazon just doesn't fear that. And I can't
| say they should. But the root problem seems to me to be more
| of a monopoly problem than a privacy problem.
| alexis_fr wrote:
| The American idea used to include anti-monopoly rules.
| Granted Amazon is not a monopoly, but the idea was to keep
| businesses small (and govt small) so no single superior
| entity would reign abusively on individuals. And that would
| make the federation stronger.
|
| Maybe it's time to revive it. Google, Apple, Amazon, all
| cause issues because they are too big and haven't been
| broken up (or menaces of) for way too long.
|
| We've scratched antitrust laws in 9/11, when Microsoft was
| recognized guilty but never sanctioned, because the
| domination of USA after 9/11 was important. But maybe that
| led to two decades of really huge corporations, and a bit
| more liquidity in the market (choice of platforms, etc)
| could be nice.
| xnyan wrote:
| This is a legislative/governmental issue not a technical
| one. In jurisdictions where privacy and anticompetitive
| laws are enforced (EU) regulators have the ability to
| regulate with fines of real consequence which is not the
| case in the US. It does not always lead to perfect outcomes
| but it does give greater protection to most people.
| chillacy wrote:
| Is life significantly better for retails selling through
| grocery or other retailers? What stops Safeway from one day
| selling a competing product under their store brand? And then
| they'd still be charging you for shelf placement.
| [deleted]
| CerealFounder wrote:
| It's pretty anti-competitive that a company can operate a
| marketplace and sell on the same marketplace. It would seem
| like an obvious law to enact.
| amelius wrote:
| > It taught me a valuable lesson not to build my entire
| business on someone else's platform.
|
| Lots of developers do this already with iOS and the App store.
|
| Some people don't even have a choice. E.g. taxi drivers had
| their entire market turned into a platform. Same with
| restaurants and meal delivery.
| [deleted]
| madaxe_again wrote:
| There's a step before them undercutting you, and that's the
| margin squeeze.
|
| I've seen it happen, repeatedly - also years ago. If you sold a
| high volume commodity on seller central, you'd see your
| commission go up, and up, and up, until you squeak - you either
| quit or you complain.
|
| They now know exactly how much that line nets you, and whether
| it's worth selling.
| shrewduser wrote:
| I don't see how this is legal,
|
| Personally i don't think you should be able to run the market
| and compete in it at the same time.
|
| People talk a lot about other companies but the one i'm most
| worried about for stamping out startups and holding the economy
| back is amazon.
| TimSchumann wrote:
| > I don't see how this is legal, Personally i don't think you
| should be able to run the market and compete in it at the
| same time.
|
| It may be, it may not be. I don't know, I am not a Lawyer nor
| do I play one on the internet.
|
| What I do know is that to date no individual, or collective,
| has had the financial or political will to test any of this
| in court.
|
| I suspect this is largely a positive feedback loop whereby
| any entity that has the financial or political capital to do
| so and stand a reasonable chance of winning has done the
| calculus and come to the conclusion that setting said legal
| precedent would do their own businesses more harm than it
| would net them in value from Amazon.
|
| Until that changes, meet the new boss same as the old boss.
| slowwwclap wrote:
| I recently (pre-COVID19) sold all my Amazon and replaced it
| with Apple due to these issues. I feel Apple Pay, and the fast
| followers, will drive shopping to more platforms than Amazon by
| reducing friction for customers of independent websites
| (supported by USPS, UPS, Fedex... which Amazon has decided not
| to compete with anymore). With the Amazon COVID19 shipping
| delays, I've established many new shopping relationships
| online, and I hope that is the experience for many others,
| changing the market. The CEO of Shopify gives great talks about
| the important of this, so I do support that platform at this
| point.
| econcon wrote:
| Same happens to us but we split sales to Shopify. Any idea if
| Shopify does same? It seems their ambitions keeps growing, they
| started charging percentage of revenue instead of flat
| subscription.
| TimSchumann wrote:
| I've had this thought as well, and certainly there seems to
| be nothing preventing them from going down that road. Though
| at least with Shopify, it's theoretically easier to move your
| website to another platform/service or just roll your own.
|
| I'd say that you're basically at their mercy with regards to
| the charging a percentage of revenue though. I mean, that's
| how all card processors work.
|
| By default I trust Shopify more than Amazon, and in both
| instances your business is essentially succeeding 'at their
| pleasure' so to speak. So I thought on it for a minute.
|
| I think the main difference comes down to individuals in the
| business and culture. I'd elaborate more but I'm not sure I
| want to write that much speculative crap on the internet this
| morning, and I should get something productive done with my
| day.
|
| EDIT: Also just realized, that if you look at my spending
| habits, they 100% imply I trust Amazon more than Shopify.
| dmalik wrote:
| No Shopify does not. Amazon and Shopify are very different 1
|
| 1) https://stratechery.com/2019/shopify-and-the-power-of-
| platfo...
| exolymph wrote:
| Get worried when they start owning the customer relationship
| (or trying to). Already low-key happening in payments.
| xwdv wrote:
| Come to Shopify.
| woranl wrote:
| Jeff Bezos has once said, "Your margin is my opportunity".
| Well... don't said he didn't warn you.
| erentz wrote:
| This reinforces the belief I have that antitrust regulation of
| online companies needs to force them to pick between being a
| platform or being a store (or publisher), but they're not allowed
| to be both.
| DLA wrote:
| Target and probably other physical retailers do the same exact
| thing. Bring a product line in. See how it sells. Replace that
| with a white label brand they own once data proves a winner.
| MisterBastahrd wrote:
| How Wal-Mart of them.
| jwiley wrote:
| I worked for a small health products reseller around 2008 that
| had stores on Amazon, Yahoo (when that was a thing) and other
| marketplaces. It was well-known that any exclusive distribution
| deals between the health products reseller and manufacturers had
| a very short life: if the product was profitable Amazon would go
| around the reseller, negotiate a better deal, and sell it
| themselves.
|
| Fast forward to today, and companies that are direct competitors
| with Amazon (like Netflix) are completely committed to AWS.
| Amazon is watching, learning, and evolving from every piece of
| data they can get their hands on. What better way to learn about
| your business model than to watch them being tested and deployed
| on their infrastructure?
|
| I'm not specifically pro or anti Amazon...but I find it
| surprising the C-suite of most organizations seems content to
| think of AWS as a separate business un-related to the business
| that is actively trying to corner the market they are competing
| in.
| Ididntdothis wrote:
| I am believing more and more that these big companies are really
| bad for the economy and size should be discouraged. In the short
| run they can be very efficient and create cheap products for
| consumers but this comes at the cost of killing innovation that
| may come from smaller players.
| api wrote:
| Apple does this with apps too.
| Reimersholme wrote:
| Yeah, it's true for basically all platforms unless there are
| strong regulations against it.
| https://www.timetoplayfair.com/timeline/
| DonnyV wrote:
| Is anyone really shocked by this? Number 1 rule when building a
| business. Never build one on someone else's platform. Never ends
| well.
| mtnGoat wrote:
| so did a lot of retailers. Walmart, Target, REI, every major
| grocery chain, etc. have all done it. IMHO, this is just business
| as usual, not sure why it's worth pointing out that Amazon did it
| when others have been doing the same for years.
|
| Direct to Consumer is the way of the future, only way to protect
| your brand, sales numbers, and other proprietary infos.
| rkagerer wrote:
| _Amazon draws a distinction between the data of an individual
| third-party seller and what it calls aggregated data, which it
| defines as the data of products with two or more sellers_
|
| Oh, definitely. Two sellers is "aggregated".
| zitterbewegung wrote:
| From what I have gathered at various user group meetings Scraping
| online web prices is pretty much done by everyone in the industry
| to provide for competitive pricing. It looks like Amazon took
| this up a notch.
|
| On the other hand at least for Amazon's first party products you
| don't have to worry about them being counterfeit and I haven't
| had a bad experience with what I have bought from them (HDMI
| cords).
| ChuckMcM wrote:
| The obligatory, "I'm shocked I tell you, shocked!" but unlike say
| the "Kirkland" brand at CostCo, this is more like UPS using the
| data it has on what is being delivered to peoples houses to start
| stocking their trucks with things people order often[1].
|
| [1] Maybe the next step after food trucks is "mini-mart" trucks.
| WrtCdEvrydy wrote:
| Mini-mart trucks used to be a thing with ice cream trucks a
| while ago... they use to sell laser pointers.
| ChuckMcM wrote:
| Good comparison, except in this case it would be like, "Hey
| we've been delivering USB chargers to all of your neighbors,
| why not get one from the van here, same quality, lower price
| and you get it right now? How about it?"
| johnnyballgame wrote:
| Amazon is a cesspool of scammers now. I created a listing for a
| physical book. I have yet to send a single book out to anyone and
| there are already two sellers trying to sell the book on the
| listing I created. And one is listed as a "collectible"!
| riazrizvi wrote:
| Not sure I understand. Are you saying you are the author of a
| new book, you haven't sold any copies yet, you created a
| listing for your book and people are offering to sell it as a
| collectible (presumably as an arbitrage where they'd fulfill on
| your book)?
|
| Or did you create a new listing for someone else's book, that
| others might credibly own already?
| johnnyballgame wrote:
| Author of a brand new book no one has any copies of yet.
| riazrizvi wrote:
| Hmmm, why not jack up the price of yours and immediately
| buy one from the scammer, just as an experiment?
| newztech11 wrote:
| Amazon
| jacknews wrote:
| no shit
|
| we're in the era of 'all out competition', rules be damned
|
| look at China
| Spooky23 wrote:
| I wonder if issues like this combined with the COVID crisis will
| impact customer and supplier behavior?
|
| For me, Amazon has been a shitshow for the last month. For in-
| stock product, they project delivery for Memorial Day and deliver
| in 24 hours, or promise prime and deliver not-so-much. Other
| retailers seem to be fine. Target, NewEgg, Walmart, etc seem to
| be fine. Small online retail seem to be fine.
|
| I wonder that their awful practices are biting them now... once
| they hit a bump the whole system jams up.
| sharkweek wrote:
| I'm not an Amazon fan boy, but _I am_ a Costco fan boy, and they
| do the same thing, so I don't really think I can be too upset
| about this.
|
| Retail is ruthless.
| akira2501 wrote:
| > but I am a Costco fan boy, and they do the same thing
|
| Are you sure? My understand was the Kirkland is mostly just a
| re-badge for already existing manufacturers.. Kirkland usually
| buys up their "B" stock/bin of items and just rebrands them.
| RyJones wrote:
| I've lived in Kirkland, Washington, off and on since 1994. It's
| amazing how many people all over the world know of Kirkland
| from Costco branding. For a log time the reddit tag line[0] was
| "We're more than Costco!"
|
| [0]: https://old.reddit.com/r/Kirkland/
| sharkweek wrote:
| Same actually! Grew up in Juanita from '89-'03 then went to
| UW and have stayed in Seattle proper mostly since.
|
| I always thought it was funny, as a young kid, that my city's
| name was on all sorts of products, not making the connection.
| RyJones wrote:
| Nice. My youngest was born in Juanita at our apartment! I
| like the area well enough, obviously, to start a reddit
| about it.
| glitcher wrote:
| > they do the same thing
|
| So I can sell my small company's products through Costco's web
| platform without Costco ever directly purchasing my product?
| aksx wrote:
| So costco pays a small companies to sell their product and
| extract sales data.
|
| Should amazon start paying small companies at the same margin
| that costco does?
| throwaway5752 wrote:
| 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.
| jsdwarf wrote:
| And? Every supermarket chain does this... First they look for
| good-selling brand products in their assortment, then they launch
| a very similar product under their own house brand following the
| "80% of the quality for 50% of the price" principle
| animalCrax0rz wrote:
| Given Amazon's willingness to spy on their business customers
| (traffic data in this case), should I be worried to deploy code
| on AWS that has high IP value in source code form (JS, Python,
| etc) or bytecode (Java/C#, which can be easily decompiled). I ask
| this because I noticed on AWS EC2 the default behavior is that
| Amazon produces the private/public key pair (as opposed to having
| the user add their SSH public key) so if they wish, they can
| access any code I deploy. Let's say I make a product on AWS that
| competes with a current or future product of AWS itself, and
| let's say it gets a ton of traffic, should I be worried? Should I
| be using only native binaries? (C/C++, Go, Rust, etc) ??
| hn_throwaway_99 wrote:
| All the platforms do this. Many of the big online travel agencies
| (booking.com, expedia, etc.) are some of the biggest buyers of
| AdWords (or at least were before coronavirus), spending billions
| on Google. Last fall Expedia's stock tanked (again, before all
| the coronavirus stuff) because Google's search results started
| including the ability to go through directly to booking sites
| without going to an OTA.
| MichaelApproved wrote:
| 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.
| ses1984 wrote:
| In this case it's shitty to be a supplier but isn't this great
| for the consumer?
| annoyingnoob wrote:
| No, this is not great for the consumer. It lowers the bar for
| everyone. What I find mostly on Amazon in the past year or so
| is cheaper imported versions of decent products. The decent
| products are hard to find or I have to look outside of
| Amazon. They've pushed out the quality and replaced it with
| higher profit junk.
|
| Its kind of the same thing with Home Depot. I used to be able
| to buy quality hardware from a local store. Now all I have is
| Home Depot and they sell mostly imported junk hardware. I
| have to go somewhere like McMaster-Carr now for quality
| hardware. Home Depot has not been good for me, Home Depot has
| only been good for itself.
| jacobr1 wrote:
| Different problems. One is the regulation of which
| suppliers can distribute on a platform, deceptive
| advertising, right-to-repair, and similar consumer
| protection considerations.
|
| The other problem the article and parent comments are
| describing relates to the distributor/retailer creating or
| sourcing generic alternatives to the items sold by their
| existing suppliers and informing their decisions to do so
| based on the sales data from their own partners/suppliers.
|
| This latter case seems ok to me, even if it sucks for
| suppliers, in the sense that we generally get better
| outcomes for customers. As long as the general regulations
| for consumer protection are in-place such as preventing
| confusion between brands and generics.
| wpietri wrote:
| What's your evidence that we get better outcomes for
| consumers?
| jacobr1 wrote:
| Good question. Actually I don't have any data for that.
| Anecdotally many "store brand" items of things that seem
| commodity-like, are things that I can get the same
| quality as a name brand at a lower price. This is better
| for me, and I suspect better for most consumers in a
| static situation. But the market is dynamic. Does this
| stifle innovation of new products? Does the reduced
| revenue of "brand" named producers, especially smaller
| ones hurt? Does the price competition produce a race to
| the bottom that ultimately doesn't benefit consumers? I
| don't know. But I would say that the considerations of
| increased regulations of "generics" vs increased
| regulation of "online markets" seem to me to involve
| different tradeoffs.
| bofadeez wrote:
| Giving consumers the same basket of goods at a lower cost
| just increases their real income, purchasing power, and
| overall standard of living. Amazon is effectively
| distributing billions of dollars of charity to those who
| need it the most. They lose $2 billion a quarter on
| retail. That's $2 billion per quarter in subsidies to
| consumers.
| plausible wrote:
| Except that they'll quickly recoup that "subsidy" by
| raising prices after they've dumped their competition.
| bofadeez wrote:
| If they raise prices then they invite an instant flood of
| competition and lose their monopoly. They have no power
| to raise prices and restrict competition. Their only
| competitive advantage is pricing. Amazon's only
| profitable products are AWS and its stock. The benefit of
| losing $2 billion a quarter doing retail is debatable.
| Would you prefer a world without amazon's subsidies given
| that they have no power to exploit anyone?
| arrosenberg wrote:
| ...which is classic anti-competitive behavior. That isn't
| a free and fair market - it's one that's in the process
| of being captured by a few large incumbents.
| annoyingnoob wrote:
| Fair enough, its not quite the same thing. Though Home
| Depot has a ton of its own products now too - they are
| doing the same thing inside physical retail stores rather
| than online only.
|
| For pharmacy items where there is some regulation around
| the quality of the product, I find generics/store brands
| to be great. For products that are not regulated in some
| way quality is all over the place. If you search Amazon
| for "ul listed usb charger" you will mostly see results
| for products that are not UL listed - there are probably
| 5 times more unlisted products for sale there than listed
| products - Amazon is pushing a bunch of cheap and high-
| profit crap at me even when I try to avoid it.
| freeone3000 wrote:
| The Amazon Basics products I've purchased have been of
| acceptable quality - and at least I know they're not
| counterfeit.
| annoyingnoob wrote:
| I can't really argue with that.
| omniscient_oce wrote:
| I tried to look for a decent priced backpack on Amazon a
| few months ago but there are a gazillion listings for what
| appears to be the same backpack, only the names differ. I
| ended up just buying it straight from Aliexpress from where
| it undoubtedly has been sourced from one of the same (or
| single?) factories. There's basically cheap-as-chips level
| products, and then 'high-grade' which is still dubious at
| times whether the quality of materials _is_ better or not.
| Middle of the pack product pricing seems to just be
| swallowed up in a race for the bottom or the top.
| docandrew wrote:
| Even worse, assuming the high-grade brand is better to
| begin with - are you buying the real thing, or a
| counterfeit?
| zrobotics wrote:
| Tip- check out Fastenal. They don't tend to have small
| retail packages, so you need to buy larger quantities, but
| it's really nice not to have to wait for shipping. They're
| an industrial supplier, but all the stores I've been in
| were perfectly happy to sell to the general public.
| annoyingnoob wrote:
| If I place a McMaster order by 10:30am I get it the same
| day, if not its tomorrow. Easier than going to the store.
| MichaelApproved wrote:
| In the short term it creates competition and lower priced
| products.
|
| In the long term, Amazon undercuts suppliers who have to exit
| the market. That reduces competition and allows Amazon to
| charge more.
| ghostwriter wrote:
| > That reduces competition and allows Amazon to charge
| more.
|
| that never happens, unless there's a regulation in place
| that prevents new sellers to get into the market as quickly
| as they can. When a price for the product begins to rise,
| it attracts new sellers, as now there's a wider price range
| to position your competing product.
| supercanuck wrote:
| People seem to think "capitalism" produces the best results
| simply because of privatization, but it is the competition
| that is created. It doesn't matter if the one producer is
| Soviet Russia or Amazon, it hurts everyone in the long run
| when their is one supplier.
| _jal wrote:
| This is a frequent trick in econ 101-style defenses of
| anarchic markets - play with the time horizon.
|
| If you're hungry, a soda is "great for the consumer". For
| 15 minutes, it alleviates that feeling. Does it follow that
| everyone should consume only soda?
| dubcanada wrote:
| You're focused to much on Amazon. Every company does this
| just go to your local Walmart, everything is white-label. A
| law like this would have to be applied to them as well.
| luckylion wrote:
| > A law like this would have to be applied to them as
| well.
|
| You say it as if that was a bad thing. More competition
| is good for the consumer, bad for the oligopolists.
| vntok wrote:
| But Amazon launching new products is strictly more
| competition, so...
| luckylion wrote:
| Similarly how Microsoft launching Internet Explorer to
| beat Netscape and eat another Market was _technically_
| more competition (for a while, until they 've established
| another monopoly and all competition ceases).
| toasterlovin wrote:
| On the contrary, house brand products are great for
| consumers. Rather than having to figure out if they can
| trust a brand for a product category that they really
| don't care about, they can just buy the house brand
| knowing that a certain minimum level of quality exists.
| This is why Amazon Basics products are so popular on
| Amazon: consumers know that, at the very least, Amazon
| can be sued, a form of recourse that is not available
| with most of the smaller brands and sellers on their
| platform.
| beamatronic wrote:
| This is me. I bought an AmazonBasics product initially, a
| phone cable, thinking it would be crap. It wasn't. So I
| bought another one, a set of HDMI cables. They weren't
| crap either! Then I bought AmazonBasics wash cloths as a
| joke. They were quite nice! Now I find myself shopping
| around the AmazonBasics section _first_. I still find it
| amusing in a "Spaceballs, the flamethrower!" kind of
| way.
| odysseus wrote:
| Where IS the AmazonBasics section? Is there a way to
| restrict searches to only Amazon white label products?
| beamatronic wrote:
| I see it as a tab at the top
| bofadeez wrote:
| If they attempt to charge more in the future when others
| exit, that will invite a flood of competition to re-enter.
| wpietri wrote:
| Definitely not. Consumers are best served when you have a
| bunch of relatively equal players competing for their
| business, and where success is rewarded financially. That
| gives everybody an incentive to focus on continuously getting
| better at serving the customer through R&D, etc.
|
| But if the reward for success is just having Amazon come in
| and hoover up the money you would have gotten by launching a
| knockoff, then suddenly there's a lot less incentive to
| invest in novel products. That's true both for categories
| where Amazon is competing and ones where it isn't currently.
|
| I wouldn't be surprised if Amazon's replacement product is
| sometimes modestly worse, because a) they don't have the kind
| of deep expertise in a product that the original creators do,
| and b) it doesn't have to be as good to get the money.
|
| And then there's after-sale support. Amazon's customer
| support is atrocious. The one thing they're good at is taking
| things back. But anything more complex and it's a nightmare.
| baddox wrote:
| > Consumers are best served when you have a bunch of
| relatively equal players competing for their business, and
| where success is rewarded financially.
|
| That depends on the significance of economies of scale and
| barriers to entry in a particular market. The term "natural
| monopoly" (as it's used in economics) refers to a
| particular market where, because of barriers to entry, the
| optimal number of firms is one. Two firms would not be able
| to produce their good for cheaper than one firm.
| smbullet wrote:
| I dislike Amazon as much as the next guy but let's not kid
| ourselves here. Consumers aren't looking for innovation in
| the paper towel market. They just want cheap stuff. If
| Amazon can make these products cheaper then the consumers
| win.
| munificent wrote:
| Lack of competition drives prices up too.
|
| Once there is only one paper towel manufacturer left,
| what is to prevent it from raising prices?
| spaced-out wrote:
| At that point it would be an actual monopoly, and we can
| break that company up.
| sneak wrote:
| There's no evidence that that mechanism is effective any
| longer. The United States regulators seem to be entirely
| content with fake not-monopolies (eg ISPs) lying about
| how much competition they have, and let monopolies or
| duopolies fleece millions for essential services or
| products as long as they spend the requisite amount of
| kickback via lobbying.
|
| Admittedly those are public utilities but the attitude
| seems to hold true in antitrust as well. Walmart is
| probably the best example there, or now Amazon as
| evidenced by TFA.
|
| Sometimes I wonder why Walmart and Comcast are allowed to
| behave this way while T-Mobile is not. (EDIT: Google says
| "nevermind":
| https://www.nytimes.com/2019/12/19/technology/sprint-t-
| mobil...)
| mtnGoat wrote:
| 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)
| Cd00d wrote:
| To clarify, you're calling for a full ban on private label
| goods?
|
| I would think 'brands' like Kirkland are a net good for the
| consumer.
| johnmarcus wrote:
| that solves the problem for suppliers, but creates one for
| consumers with lower competition. Less competition, higher
| prices.
|
| *just noticed I was down voted, likely by MichaelApproved
| because he has 7500 Karma and I only have 156.
|
| I'm starting to really hate contributing to HackerNews
| discussions because it's fully of a bunch of bullies who pound
| on your karma if you don't agree with their viewpoints. Bring
| on the downvotes, I know HN hates any mention of it's
| imperfections as well. At least my conscious is clear.
| vntok wrote:
| Please don't submit comments saying that HN is turning into
| Reddit. It's a semi-noob illusion, as old as the hills.
|
| Please don't comment about the voting on comments. It never
| does any good, and it makes boring reading.
|
| To your point, though, lower competition is not always bad. I
| as a consumer very much prefer having to deal with fewer
| toilet paper suppliers if they are of good enough quality.
| The toilet paper industry is not one where I expect dramatic
| innovation brought by competition. I just want the cheapest
| pack that won't feel like sand paper on my delicate behind.
|
| There are, surprisingly, quite a lot of similar industries
| where consumer would prefer cheap and fast rather than
| elaborate and innovative products.
| johnmarcus wrote:
| The cheapest pack comes FROM competition. You, as the
| consumer, want the cheapest pack. You want competition.
| It's the most basic of economic principles.
|
| P.S. making comments without a basic education of a topic
| is equally boring to read. I would rather you say it and
| have the chance to learn than silence you though.
| vntok wrote:
| You missed the whole point in that uncalled for attack on
| my education. No one here is talking about preventing all
| competition. Then you went on repeating an economic
| principle without understanding it fully. I know that
| because you consider it absolute while it's in fact not.
| In the real world, it is very rare to find an actually
| efficient market with perfect and instantaneous discovery
| where those simplistic economic laws apply correctly.
|
| The general point is that it is generally possible to
| keep fair competition flowing between a smaller group of
| companies, as long as that group is large enough for its
| members' respective interests not to align completely.
|
| All other things being equal, there can be only one
| cheapest pack of toilet paper in a given market, which
| immediately disproves your argument. After all, having
| 5000 toilet paper manufacturers all competing among
| themselves is certainly no guarantee of any improvement
| to the consumer for that particular criteria, because
| 1000, 500, 100 or even 2 would have sufficed barring
| collusion.
|
| Now we can add many other qualities to toilet paper that
| make discerning customers keener to see past price when
| they're buying between competing suppliers. However, in
| mature markets with proven, stable demand, there comes a
| point where adding more actors does not bring value.
| Those additional entities are merely tapping into
| existing market value without providing marginal benefits
| and without forcing others to improve.
|
| Do you believe the toilet paper industry is so ripe with
| innovation that its warrants as many competing
| manufacturers as possible, with as much competitive
| spirit among them as possible? Nope. In a supermarket,
| the pack of toilet paper that's put in shelves slightly
| above eye-level will be chosen way more often by
| consumers than other packs located a bit below. Companies
| do not compete on the quality of their products, they
| compete on the amount of money they pay for their
| products to be stacked the right way on the right shelves
| at the right location.
|
| Back in the real world, across many industries, going
| from thousands of competing companies to a few hundreds
| is definitely not worse for the consumer.
| tingol wrote:
| How? Everyone else can compete...
| johnmarcus wrote:
| If you regulate that Target can't compete, than that is one
| less competitor.
| luckylion wrote:
| > that solves the problem for suppliers, but creates one for
| consumers with lower competition. Less competition, higher
| prices.
|
| How so? Amazon is the one _reducing_ competition, stopping
| Amazon from doing that would _increase_ competition. That 's
| a good thing for consumers.
| notahacker wrote:
| If the aim is to curb monopoly powers of Amazon etc this would
| be disastrously counterproductive
|
| When Joe's Custom Bike shop isn't allowed to be a manufacturer
| and a retailer of someone else's bike equipment, the customer
| is going to go to Amazon or Wal Mart to buy it. And retail
| giants, buoyed by the government killing half their
| competitors, will still find a way of squeezing their suppliers
| and funnelling sales data to preferred suppliers or related
| entities.
| malandrew wrote:
| As a consumer, I disapprove. Your regulatory proposal is anti-
| competitive.
| wonderwonder wrote:
| I agree. I am hard pressed to think of a recent time that I
| advocate for an anti - monopoly government action, but Amazon
| and its current practices is one of those times. If they
| provide the platform they should not be able to compete with
| and undercut those using their platform. They are at such as
| scale that they can basically put anyone out of business to the
| detriment of all other businesses. This is what the legislation
| is designed for and it should be used in this case. Pro sellers
| on amazon also have to pay a fee averaging 13% per sale, while
| amazon products don't suffer that handicap. Its a competitive
| advantage the sellers cannot overcome.
| jberm123 wrote:
| 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.
| 12xo wrote:
| 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.
| AbrahamParangi wrote:
| It's regulation like this that causes industry monopolies by
| raising the complexity of entering the space.
|
| Outside of dealing with negative externalities, regulation is a
| poor-man's trust busting anyway.
| simonw wrote:
| It's possible for both of these to be true at the same time.
|
| Regulation can help prevent harmful economic behaviour.
|
| It can also create anti-competitive environments that protect
| incumbents at the expense of new entrants, often by
| regulatory capture.
| sp332 wrote:
| The alternative to introducing this regulation is not going
| to a system with no regulation, it's continuing with the
| current framework where Amazon is actively driving
| competition out of the market. Opposing this regulation
| without an actual alternative is just defending the status
| quo.
| AbrahamParangi wrote:
| If the free market has overly concentrated power in a
| party, the solution is to create competition by dividing
| that party.
| sp332 wrote:
| Isn't that exactly what MichaelApproved said?
| zo1 wrote:
| OP said:
|
| > _" The solution is to create regulations & laws that
| prevent this behavior."_
|
| I'll take a slightly contrived and simplified set of
| examples to illustrate why a lot of free-market advocates
| don't agree with this sentiment as being correct.
|
| 1. We identify this "market failing" behavior of Amazon.
| I.e. Amazon does it a few times and after a while, public
| starts to
|
| 2. Legislators make it illegal for a platform to sell the
| same products as their suppliers. Easy, right?
|
| 3. Amazon alters products to not be technically "the
| same" so they skirt regulation. E.g. Renames "Plain
| Artisan Soap" to "Amazon Artisanal Soap", never mind that
| the product they "copied" was called "Joe's Plain Artisan
| Soap", and Amazon's product is advertised as "cheap
| alternative to expensive artisan soaps".
|
| 4. We notice and we complain.
|
| 6. Amazon complains back (maybe even a few court-cases
| along the way?), says certain products aren't the same.
| E.g. Supplier sells artisan soap, but Amazon argue their
| white-label "soap" isn't the same, it's just soap.
|
| 7. So to be fair, legislators start coming up with a
| reasonable system to identify similar products, which
| forces amazon to identify "similar" products in order to
| get them off.
|
| 8. Legislators followup and create reasonable rules and
| exclusions how Amazon can market their branded soap, or
| how closely the soap can resemble an existing product.
|
| 9. Amazon happens to _also_ have a bunch of their own
| _genuine_ products that it manufactures cheaply. Perhaps
| a byproduct of some sort of warehouse process they have,
| and they use their idle machines to make it, or
| something. But new suppliers come on that happen to sell
| something that according to regulations is "similar" to
| those products, and Amazon gets into hot water.
|
| 10. Amazon has to put rules, processes, maybe software
| algorithms to identify such a case. Remember, at Amazon
| scale, they have thousands of new suppliers and orders of
| magnitude more "products" that get added each day.
|
| 11. Regulators realize it's too difficult to figure this
| problem out and go to court over it. So they come up with
| a complaints + arbitration system to address it fairly
| with a "human in the loop". Think DMCA, takedown
| requests, etc.
|
| 12. Above regulations require paperwork, and you have to
| register as a platform if you get requests, you're
| obligated to address complaints of "similar products",
| etc.
|
| Amazon implements all these rules at each stage,
| neverminding the "good-faith" interpretation of the
| original and subsequent laws put in place each time. I.e.
| "We just don't want platforms abusing their power to
| undercut genuine businesses." But at this stage we've,
| through genuine and honest market "interventions" and
| reasonable rules that seem straightforward and simple and
| cheap to implement, created regulatory costs that _by
| default_ get applied to every new "platform" that
| competes in a space similar to Amazon. You've now
| successfully put in place regulations that inhibit and
| prevent competitors manifesting to compete with the
| existing monopoly or oligopoly.
| sp332 wrote:
| And the alternative, if I'm getting AbrahamParangi's
| point, is to create regulations that only apply to
| Amazon. That seems arbitrary and unpredictable. I
| understand that regulations applied equally to every
| company increase barriers to entry, but making special
| rules for specific companies weirds me out.
| dv_dt wrote:
| That's what India basically regulated with Amazon. i.e. a
| company can't sell proudts on their open-market platform from
| companies you have a stake in (or your own generics
| presumably?).
|
| https://www.digitalcommerce360.com/2019/02/01/new-ecommerce-...
| allemagne wrote:
| FTA:
|
| >The new rules could wipe out nearly half the products on
| Amazon.in, said Satish Meena, an analyst at Forrester
| Research Inc. "It's likely to disrupt availability for
| customers," he said.
|
| >The biggest beneficiary from the tightened rules could be
| Reliance, which is India's largest private company and owns
| the country's biggest brick and mortar retail chain.
|
| In theory India standing up to giant foreign corporations. In
| practice, a huge giveaway to another giant corporation at the
| expense of Indian consumers and a big warning to other
| companies hoping to expand to or invest in India.
| dv_dt wrote:
| Or it will allow small businesses space to compete in India
| instead of taking a shortcut of allowing unfettered access
| by large corps to increase commerce, but in a way that
| funnels profits away from India itself.
|
| That portion of the article is basically the opinion part.
| I didn't find great coverage over the full details of the
| regulations themselves.
| hanniabu wrote:
| Wouldn't solve anything. They'd just split their company to be
| separate entities but still share all the information and
| operate as if nothing has changed.
| mtone wrote:
| Isn't that collusion?
| vntok wrote:
| Companies enter into agreements all the time, not all of it
| is necessarily collusion.
|
| The Amazon Basics company could buy some market information
| or behavioural stats from the Amazon Dotcom company at a
| rather steep price, for example.
| hanniabu wrote:
| Partnership
| toasterlovin wrote:
| What they would probably do is form special relationships to
| give certain brands special placement and/or endorsement, but
| charge those brands a larger fee for the special treatment.
| The end result is basically the same.
| [deleted]
| x86_64Ubuntu wrote:
| 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.
| Shivetya wrote:
| Disagree, what I do think we need is any retailer who has their
| own product lines in store must clearly identify that they are
| store brands.
| vntok wrote:
| That's what Amazon Basics is and does.
| throwaway2048 wrote:
| Amazon basics isnt the only amazon store brand, it has many
| others that are not labeled amazon in any way.
| chairmanwow1 wrote:
| 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?
| ProAm wrote:
| > What really is the issue?
|
| This issue us that Amazon also dictates what you are allowed
| to sell your product for elsewhere. It would be one thing if
| they just used your own data and created a competing product,
| but the fact you cannot sell your product cheaper elsewhere
| is the issue.
| pas wrote:
| Sorry, maybe I'm too tired to understand this, but why
| can't you do that exactly?
| beagle3 wrote:
| It is not illegal to have a monopoly; but it is illegal to
| use a monopoly you have in one area to get an unfair
| advantage in another.
|
| Amazon may or may not legally be a retail monopoly - I do not
| know the answer. But your question can be rephrased for any
| monopoly and the answer would be "monopolies should be
| punished for leveraging their monopoly power in other
| markets, because that ruins the market for everyone else."
|
| Free markets and democracies are good at a lot of things, but
| self preservation is not one of them - therefore you need
| anti-freedom laws.
| baddox wrote:
| > It is not illegal to have a monopoly; but it is illegal
| to use a monopoly you have in one area to get an unfair
| advantage in another.
|
| This is a very common misconception in the United States.
| It's how a lot of defenders of antitrust law _want_
| antitrust law to work, but it is not how antitrust law does
| work.
|
| This Supreme Court case explicitly establishes that
| antitrust laws can be used against companies which obtain a
| high market share simply by anticipating future demand and
| responding effectively and efficiently.
|
| https://en.wikipedia.org/wiki/United_States_v._Alcoa
| MiroF wrote:
| a. That isn't a supreme court case
|
| b. This 1945 precedent is not the standard that most
| modern antitrust (post-Bell breakup) cases are held to.
| TeMPOraL wrote:
| > _antitrust laws can be used against companies which
| obtain a high market share simply by anticipating future
| demand and responding effectively and efficiently._
|
| This would make sense as a feature. If you subscribe to
| the view that competitive pressure is the source of
| progress, then you never want any company to actually
| _win_. Like a donkey chasing a carrot on a stick, you
| want companies to endlessly run towards market dominance,
| but never actually get there - because once they do, they
| stop contributing to progress.
| xxpor wrote:
| Technically not a supreme court case, but kind of close
| enough.
|
| Also I think there's 0 chance that wouldn't be overturned
| if tested today.
| maxwell wrote:
| Antitrust law in the U.S. is currently based on the
| dubious "consumer welfare standard".
|
| https://en.wikipedia.org/wiki/The_Antitrust_Paradox
| kharms wrote:
| >What really is the issue? That Amazon is leveraging its
| success to be successful?
|
| The issue is that over the long term, Amazon is lowering the
| ROI on innovating and taking risks in the consumer goods
| space. It's able to do this because of its dominance as a
| marketplace.
| [deleted]
| leonardteo wrote:
| Where it gets grey is when stakeholders privately invest or
| start companies that sell on the platform. Amazon chose to
| do it upfront with Amazon Basics but there's nothing
| stopping them from creating house brands/labels even at
| arms length to give the impression that it's not Amazon.
| maxwell wrote:
| > there's nothing stopping them from creating house
| brands/labels even at arms length to give the impression
| that it's not Amazon
|
| They already did this years ago. Amazon has 80+ private-
| label brands.
|
| https://www.businessinsider.com/amazon-owns-these-brands-
| lis...
| [deleted]
| GavinMcG wrote:
| This Yale Law Journal note is a decent start for this
| conversation: https://www.yalelawjournal.org/note/amazons-
| antitrust-parado...
| munificent wrote:
| Vertical monopolies are anti-competitive. It works like this:
|
| 1. Amazon clones independent manufacturer's product.
|
| 2. Amazon strangles manufacturer because they can promote
| their own product more and have lower overhead because they
| control the entire chain.
|
| 3. Competitor dies.
|
| 4. Amazon has no competition on this product.
|
| 5. They raise prices and/or lower quality.
|
| 6. Consumers pay more for a shittier product.
| toohotatopic wrote:
| You forget the other big competitors.
|
| Sun pushed OpenOffice to cut MS's profits from Office
|
| Google and MS are pushing into the Cloud to reduce Amazon's
| influence
|
| Amazon is creating its own ad network and offering Twitch
| to reign in Google
|
| Walmart is slowly creating its own global online shopping
| platform to compete with Amazon
|
| Should Amazon ever have no competitor, monopoly regulations
| would kick in. But usually, all the other big players will
| make sure that Amazon has enough competition to not be
| invincible. It's not fun for small players, but they
| obviously don't care enough to organize and take their
| products off Amazon.
|
| Btw, Amazon does not necessarily have less overhead due to
| Price's law: [1]
|
| >The square root of the number of people in a domain do 50%
| of the work.
|
| Should Amazon expand into every business, they would be so
| huge that all their efficiencies and more would be eaten up
| by the overhead.
|
| [1]https://brainlid.org/general/2017/11/28/price-law.html
| MiroF wrote:
| Price's law is of questionable empirical validity, it's
| more like a useful guideline/urban legend. On the other
| hand, there is substantial economic research
| demonstrating the harms of monopolies, including vertical
| ones.
|
| I'm a bit confused. Are you claiming that because of
| Price's law, Amazon doesn't actually benefit from it's
| monopoly position?
| toohotatopic wrote:
| Almost. I think that Amazon cannot hold a monopoly
| position in all markets because its size would be so big
| that a smaller competitor could compete.
|
| As a consequence, there will be an optimal size where
| Amazon is serving many markets, most likely the most
| profitable ones, thus massively benefiting [ * ], but
| they leave every other market open.
|
| Depending on the future, this is not necessarily a bad
| position because low interest rates could seed plenty of
| startups which means that competitors could operate below
| break even points.
|
| The question is: will Amazon ever reach that position or
| will its competitors make sure that all its profitable
| markets will dry up and its growth will be limited?
|
| [*] Actually, not Amazon is profiting because the value
| of that dominant position would be priced into Amazon
| shares in advance. Amazon would just execute its dominant
| position that its investors had foreseen.
| savanaly wrote:
| Why wouldn't 7. be: a competitor easily enters the market
| because they can just make the good and charge a markup
| that's somewhere between what amazon is charging and 0 and
| still make a profit and get all the business?
|
| If what you said about amazon having less overhead prevents
| the above hypothetical from happening, then what's the
| problem? It's apparently more efficient for Amazon to
| supply this good and that's what an omnipotent benevolent
| economic dictator would choose anyways.
| spderosso wrote:
| > 5. They raise prices and/or lower quality.
|
| > 6. Consumers pay more for a shittier product.
|
| Or a competing product emerges with a lower price and/or
| better quality. Step 6 would only happen if competing
| products are not allowed to be sold on Amazon. And even if
| Amazon does that, I would assume that if the delta in price
| and quality is big enough people would switch to buying the
| product on Shopify, eBay, or any other platform the
| manufacturer can use to sell.
| storf45 wrote:
| We run a DTC automotive retail website that has both white-
| label products and vendor products and have product
| development and manufacturing capability in house. We also
| sell through multiple channels like wholesale customers,
| marketplaces, (including Amazon when it makes sense), and a
| 2 retail stores. Are you saying that we need to
| dramatically change our business model and can only either
| be a manufacturer or sell other peoples products because
| this model is unethical?
| LaEc wrote:
| Vertical monopolisation is a mixed bag actually. Vertically
| integrated companies profit more with lower prices in the
| downstream market than a purely downstream product company
| because they make profit at both stages. Antitrust law is
| far kinder to vertical mergers than horizontal mergers.
| sinayev wrote:
| The issue is that Amazon is lying to Congress.
| allemagne wrote:
| >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.
| rsanek wrote:
| No, that's not what a platform is. You can always sell your
| product direct to consumer. You just can't be the
| intermediary for both your own and other companies' products
| on the same site.
| allemagne wrote:
| Alright, so you actually _can_ be a manufacturer and a
| retailer at the same time, just with your own products on a
| separate website.
|
| Are manufacturers legally barred from linking to the
| marketplaces of its peers?
|
| Could Amazon not just maintain two websites, and shut down
| the marketplace for certain goods when it feels it has
| enough information to sell its own versions on the other
| site?
|
| If not, could Amazon not just sell the information it would
| have used to develop its own products to another company
| (which we'll assume is totally unrelated) to develop its
| own off-brand products, and then treat those products
| preferentially?
| rsanek wrote:
| I think those are good implementation concerns.
| Maintaining two separate websites isn't really an option
| under the supposed regulation, that's still one company
| being a platform and a manufacturer. The second option
| seems alot more likely to be allowed -- but now, at least
| you've created a market for that information and it's not
| just Amazon that has access to the data. Not sure I
| understand why it would treat the those products
| preferentially though -- unless you're bundling selling
| that information with product placement fees, which
| doesn't seem to be related (or necessary). I would assume
| product placement would be another revenue stream for the
| platform, like it is now for brick and mortar retailers
| like walmart
| vntok wrote:
| OK, done. Now you have Amazon Basics' products competing
| with Amazon Fulfillment's products on Amazon Dotcom's
| website. Different entities, not even under the same
| corporate governance.
| rsanek wrote:
| If they are different entities, how come Amazon Basics
| can use the same name as the platform? Did Amazon sell
| the rights to another company to use their brand?
| vntok wrote:
| "Did Amazon sell the rights to another company to use
| their brand?" But of course, why not? These kinds of
| trademark licensing agreements are all over the place,
| there would be no difference here.
| dlivingston wrote:
| The software corollary would be that Apple can no longer
| host GarageBand and Keynote on the App Store, and Google
| can no longer host GMail or Google Docs on the Play Store.
| rsanek wrote:
| I think that's a great call-out. It's interesting that we
| don't see the same problem in app stores -- probably
| because there's not much profit motive for apps like
| there is for general retail.
| coffeefirst wrote:
| Well, the function of anti-trust law is specifically to
| target massive unchecked power.
|
| If you're the supplier with a Shopify and Amazon Merchant
| account, or a local grocery store with white label products,
| none of this applies to you because you don't have the
| capability to effectively hold other businesses or markets
| hostage, no matter how aggressive you are.
| stronglikedan wrote:
| What perverse incentive? Competition?
| repiret wrote:
| _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.
| PaulDavisThe1st wrote:
| (1) it's not just about generic products. Amazon uses the same
| approach to decide what non-generic products it should become a
| direct seller of, potentially (and normally) negatively
| impacting 3rd party sellers.
|
| (2) HD and Lowes have almost no generic/store brand stuff at
| all. There are a few exceptions, and they likely do represent
| fairly profitable sections of their overall business. The main
| ones I am aware of: lighting, ceiling fans, toilets/sinks,
| flooring. That leaves huge sections of these stores without
| generics.
| repiret wrote:
| (1) You don't think HD and Lowes and Safeway and Walmart and
| every big retailer doesn't use their sales data to decide
| which products to try to disintermediate distributors and
| other middle-men in the supply chain?
|
| (2) I'll concede HD and Lowes have a lot of departments
| without store brands [1], but raise you the local grocery
| store, which doesn't.
|
| [1]: The pattern I see is that the stuff marketed mostly to
| contractors is less likely to be infected with crappy store
| brands than the stuff marked mostly to DIY'ers. I suspect its
| in part because pros will learn whats quality and whats crap
| a lot faster than DIYers, because the latter only buy a
| ceiling fan or whatever once a decade.
| stronglikedan wrote:
| > figuring out what crappy store brand stuff and whats not.
|
| Don't they usually have only one store brand? Or maybe two, if
| there's a premium option? I don't think I've ever questioned
| which is the store brand. I know I've questioned which non-
| store brands are of dubious origin though (e.g., knockoffs)
| repiret wrote:
| My experience has been that they have multiple house brands
| in each department, and they are different in each
| department.
| [deleted]
| Operyl wrote:
| I thought this was common knowledge. Don't the chains like
| Walmart do the exact same things?
| Frost1x wrote:
| 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.
| blueboo wrote:
| Yes, other multi-hundred-billion-dollar businesses with
| regulatory capture do the exact same things. What a comfort.
| dangwu wrote:
| Yup. Costco's Kirkland brand is another example.
| TheKarateKid wrote:
| 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.
| delfinom wrote:
| But this is the sellers choice. They could find other online
| retail channels.
| AlanSE wrote:
| Which goes back to the buyer problem, that they don't
| consider other channels. Then you get hostile co-
| development of browser extensions for cross-channel price
| comparison, and life in the jungle continues on as such...
| ehnto wrote:
| There are many businesses who are 100% dependent on Amazon as
| a platform and Google as an acquisition stream. If you want
| to break out and sell on your own online platform, you're
| still dependent on Google, be it through search or
| advertising.
|
| I would love to hear of consumer facing (B2C) online
| businesses who are successfully operating without any Google
| or Amazon dependencies to see if it's even possible in the
| current online ecosystem.
|
| My hypothesis is that it isn't, and as such Amazon and Google
| should be broken up. They have close to a functional monopoly
| on consumers, but I'm putting forward that they also have a
| functional monopoly on online businesses in commerce.
| shiftpgdn wrote:
| I own a SAAS product that does well into the six figures
| ARR and we have spent exactly $100 on Google ads (which
| proved they are worthless.)
|
| Our sales are from word of mouth and direct marketing.
| wolco wrote:
| Examples of businesses operating without Amazon? Most
| businesses are not on Amazon or use it to clear old
| inventory.
|
| Without google search in anyway? There are some ig direct
| marketing businesses or ebay businesses.
| woodgrainz wrote:
| Except Amazon testified that it didn't do that, to Congress.
|
| https://www.cnbc.com/2019/07/16/amazon-tells-house-it-doesnt...
| sct202 wrote:
| 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.
| ThrowawayR2 wrote:
| Walmart has had their own marketplace for a while. For
| example, I can order a HP DL360 Gen10 from a third-party
| seller on Walmart's site right now.
| xer0x wrote:
| That amazon does has been common knowledge since Amazon
| Basics first appeared. Obviously, Amazon is enjoying the
| enviable position enjoying being the mall, the payment
| processor, and everything else.
| [deleted]
| dunkelheit wrote:
| 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.
| jader201 wrote:
| > Wow, lots of comments stating that it was common knowledge,
| but some fact doesn't become common knowledge simply because
| everyone knows it.
|
| Common knowledge: something that many or most people know.
|
| https://www.merriam-webster.com/dictionary/common%20knowledg...
| dunkelheit wrote:
| Sure, not going to quibble about word choice. The point is
| that many comments are like "so what, everybody knew this",
| but there _is_ a material difference between "everybody
| knows" and "everybody knows that everybody knows".
| stevemadere wrote:
| Surprise Surprise. So did HEB, Safeway, etc.
| SlowRobotAhead wrote:
| Hmm, I see a lot of people here mad and arguing for regulation to
| stop Amazon from making their own white label products, but it
| seems like selective outrage.
|
| When the discussion is about censorship online (demonetizing,
| blocking people who they don't like but have done nothing against
| explicitly stated rules, banning anyone critical of the WHO) the
| argument often becomes "They're a private business, they can do
| whatever they like and you don't need to use them".
|
| How is the solution if you don't like what Amazon is doing with
| white label products (that almost all major retailer does) to
| just not use Amazon?
|
| Even if you consider Amazon a monopoly, they don't prevent the
| name brand product from being sold there. If they did it would be
| a similar issue.
|
| This really seems like a Rorschach test for a political ideology.
| cocktailpeanuts wrote:
| Thanks for the enlightening insight, captain obvious.
|
| Every single platform company, whether online or offline, does
| this. Apple does this with their appstore. Microsoft did this
| with their windows platform. Every retail or grocery store does
| this by developing their own native brand that blatantly copy
| existing products but with a bit lower quality and lower price.
|
| Is this good or bad? Well this is how the vendors are forced to
| innovate, and that's good for the consumers! If we just all
| become social justice warriors and shame all these platform
| companies to do nothing because their products shouldn't hurt
| others like a bunch of communists, then it is US, the consumers,
| who lose from this. And even these social justice warriors, at
| the end of the day, are all consumers.
|
| I also find it weird how they say Amazon "scooped up data", when
| all that data has been on Amazon's own server all along,
| voluntarily.
| mthoms wrote:
| Important line from the article
|
| > a practice at odds with the company's stated policies...
|
| > .. as stated to congress
|
| (per the comment of user "so_tired" above)
| nateburke wrote:
| 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.
| jhall1468 wrote:
| That's absolutely not the same thing lol. What Amazon did is
| unethical. What you are describing is illegal.
| CobrastanJorji wrote:
| I'm honesty curious what crime this would be. If I rent time
| on someone else's server, and they look at what I'm doing on
| that server, what illegal thing has happened?
| bluntfang wrote:
| This could fall under Unlawful Access to Computers.
| ceejayoz wrote:
| Seems like a pretty clear violation of
| https://en.wikipedia.org/wiki/Computer_Fraud_and_Abuse_Act.
| kube-system wrote:
| I'm not so sure about that.
|
| AWS terms do not assign their customers any rights to any
| physical computer. And the AWS customer agreement gives
| Amazon the authority to access your data for certain
| purposes.
|
| I'm not sure I've ever heard of anyone prosecuted under
| the CFAA for accessing a computer that they physically
| own and physically control. AWS is a service, not a
| computer rental.
| ceejayoz wrote:
| https://aws.amazon.com/agreement/
|
| > We will not access or use Your Content except as
| necessary to maintain or provide the Service Offerings,
| or as necessary to comply with the law or a binding order
| of a governmental body.
|
| The CFAA uses wording like "exceeds authorized access",
| which Amazon would absolutely be guilty of if they went
| into your database to spy on your product listings.
|
| If they could go after Aaron Swartz for using
| _authorized_ access in an unauthorized _way_ , it seems
| likely it could be applied here.
| SkyBelow wrote:
| "One reason we could charge the price we did for the
| service is that we were treating the data we had access
| to as an investment. Thus the data we accessed was done
| so to ensure the service could be maintained."
|
| Would a judge accept that argument? From me? No. From the
| lawyers Amazon can afford? I wouldn't be comfortable
| betting either way.
| rickety-gherkin wrote:
| Assuming that the information would be behind at least a
| password entrance that a user had setup, Amazon breaking
| through that would be considered illegal unless they had a
| court order or something. They can peer into metadata that
| your machine creates but I think looking at private
| information on a server that they lease out would be
| illegal. Maybe I'm just hopeful?
| eecc wrote:
| Huh, WTF?! Your FBI used to railroad random kiddies for
| messing around with poorly programmed dynamic pages and now
| you're arguing there's nothing wrong if a hosting provider
| trespasses and mines your private property?!
| sneak wrote:
| The rules the FBI/DoJ applies to kids on irc are not the
| same rules the FBI/DoJ applies to multibilliondollar
| infrastructure companies and/or trusted military defense
| contractors (Amazon is both).
|
| Equal protection or application of computer crime law
| (perhaps, any law) in the USA is a fiction. It would be
| practically illegal to invent and run a web spider today,
| for instance, if they didn't already exist as a concept.
| (France recently decided this was true for news link
| aggregation; Google must pay the newspapers for
| reproducing their headlines. I'm glad hosted RSS readers
| aren't outlawed so far, but under these sorts of
| restrictive legal interpretations you could see how they
| might be. Google doing AMP, of course, gets a free pass.)
|
| If you don't believe me about the web spider thing, try
| making a complete download of Twitter for the purpose of
| making a tweet search index and see if you get to
| continue owning your house. (My theory is that Clearview
| is allowed to do it for Instagram because they're using
| the database to provide services to law
| enforcement/military, so those groups want it to continue
| to exist free of prosecution.)
|
| Bummer that actively collaborating with violent types
| like pigs and military seems to be the only way to avoid
| jail if you want to build large novel data systems with
| interesting public datasets today. This sort of freedom
| to experiment with new/neat algorithms over published
| documents got us Google; today these same companies will
| get you raided if you dare download/index _their data_.
| (Facebook's idea famously started out scraping public
| yearbook photos. Try scraping Facebook now.)
|
| one small counterpoint:
| https://www.eff.org/deeplinks/2019/09/victory-ruling-hiq-
| v-l...
|
| RIP aaronsw
| snowwrestler wrote:
| Amazon owns the computer and grants you limited rights to
| use it, in exchange for the money you pay them. It's
| basically the opposite of a script kiddie hacking into
| someone else's web server.
|
| Now, indiscriminate access to your content might violate
| whatever commitments Amazon made to you in their terms of
| service; I have not read them for a long time and can't
| remember what the language is specifically. But that
| would not be a matter for the FBI.
| steffan wrote:
| I read the parent comment as less of an argument against
| it than a question of which laws do we have in place to
| prevent it.
| 12xo wrote:
| Why do you feel its unethical?
| [deleted]
| pacala wrote:
| At the very least, they own your IP traffic. From there, every
| single value-add service you use gives them an opportunity to
| eavesdrop your data. Take, for example,
| https://aws.amazon.com/elasticloadbalancing. All of the sudden
| your URL traffic is 'fair' game.
| motoboi wrote:
| There is absolutely no veil between the hypervisor and the
| guest virtual machines. Not in the EBS either.
|
| If they say they won't read your data, better trust them. If
| you don't, stay away from their datacenters.
|
| EDIT: fix typo.
| vkaku wrote:
| It is things like this that will make people lose trust on
| Amazon. If they start reading data, it is bye-bye AWS for
| Amazon.
| dathinab wrote:
| Which is why a company operating cloud computing should just
| do that and nothing else. (And a company producing phones
| should also just do that and not start competing on the app
| marked. etc.)
| TimSchumann wrote:
| > The is absolutely no veil between the hypervisor and the
| guest virtual machines. Not in the EBS either.
|
| This is 100% true. To do any useful computation on your data
| (read, what you're using all AWS for) they have to have 100%
| visibility into your data.
|
| > If they say they won't read your data, better trust them.
| If you don't, stay away from their datacenters.
|
| That's it, right there. All of this is based on Trust in
| Amazon, not some technology that provides any assurances,
| much less proof, they're not looking at your data.
|
| They can pull the curtain off anything you're running in
| their cloud, at any time they feel like it. It has to work
| this way for AWS to be of any use, and by using AWS you're
| implicitly trusting Amazon with your data.
| xnyan wrote:
| For about half a billion they will build you an aws on
| site(s) you control: https://cloudcheckr.com/cloud-
| security/understanding-aws-gov...
| darkerside wrote:
| This is a similar level of trust that you give to banks not
| to seize your money, or to your bodyguard not to do you
| physical harm. Stealing data from a customer paying for
| hosting would be _very_ different, and much more
| scandalous, than identifying trends on a _competitive
| marketplace_ and taking advantage of them by launching
| competing products.
| minikites wrote:
| >This is a similar level of trust that you give to banks
| not to seize your money
|
| How many PayPal horror stories have there been?
| pacala wrote:
| How about snooping the traffic through a load balancer
| service managed by AWS? That's exactly 'identifying
| trends on a competitive marketplace and taking advantage
| of them by launching competing product', except that
| instead of looking at sales data of products on your
| shelves, you look at URL access patterns for sites hosted
| on your platform.
| TimSchumann wrote:
| I don't disagree with any of what you've said. I just
| think that many people are ignorant of that being the
| case with Amazon, Facebook, Google, etc because they
| assume 'Well Technology must have solved that'.
|
| Then again, compared to the average bear, maybe I'm
| unusually circumspect when it comes to all of those
| things.
| ngneer wrote:
| Technology alone cannot solve the use of technology to
| promote interests of parties in a zero sum game.
| kortilla wrote:
| The promise of homomorphic encryption is to allow cloud
| computing without giving your data away.
| dathinab wrote:
| Actually it's not _that_ uncommon for guards to be
| involved into the business of braking in into high profit
| buildings. At least in countries with partially
| undermined police/law systems. Which sadly applies to
| most countries of the world even first world countries
| where people normally don't think about it.
| kortilla wrote:
| Bad analogy, I can tell when the bank seizes my money.
| adrianmonk wrote:
| Or your commercial landlord to not send the cleaning
| staff to rummage around in your filing cabinets. Which,
| while it could happen, is something that people don't
| really seem to get concerned about.
| calimac wrote:
| Exactly!!
| werber wrote:
| I have been chastised for not locking my desk for this
| exact concern. It does happen
| milesvp wrote:
| Don't let anyone chastise you for this. Most desk locks
| are easy to pick. Also, there are like 3 keys to have on
| your keychain to open like 80% of all manufactured locks
| like the ones in furniture. Deviant Ulam, a pen tester,
| gives a lot of talks on this topic.
| renewiltord wrote:
| Not really wrong, actually. A friend picked a desk lock
| for another when they left their charger in there.
| jaywalk wrote:
| Most "crimes" of this sort would be stopped by simply
| locking the drawer. Nobody believes that a simple desk
| lock would keep out a determined attacker.
| werber wrote:
| I pick my battles, I'm not going to complain about a
| policy unless I think it could really hurt people. If I
| complained about everything i think is dumb, I'd never be
| able to keep a job, because most of it seems dumb to me.
| nwallin wrote:
| If a bank were to seize your money, you'd notice, because
| you wouldn't have that money anymore. And it would be
| very well documented, leaving a clear paper trail to a
| criminal conviction and a civil suit. If your bodyguard
| did you physical harm, you'd notice, because your knees
| would hurt. And there would be ample evidence for a
| criminal case. If amazon copied all your proprietary
| data, you would almost certainly never notice, no
| criminal law would apply, and you'd have a hell of a time
| proving it in a civil suit.
|
| It's the difference between breaking into a Walmart with
| a ski mask and assault rifle and stealing a bunch of blu
| rays vs recording the HDMI out from whatever device you
| stream Netflix from. They're not the same thing at all,
| either in terms of harm done, applicable criminal law, or
| ability to build a compelling civil lawsuit.
| ethbro wrote:
| _> If amazon copied all your proprietary data, you would
| almost certainly never notice, no criminal law would
| apply, and you 'd have a hell of a time proving it in a
| civil suit._
|
| For a thought exercise, let's play this out.
|
| Amazon copies data running through VMs (or grabs it from
| storage).
|
| Let's assume it isn't on hardware certified for capital-
| letter processing [1], most of which require regular
| third party audits.
|
| So they have your illegally-obtained data [2], which
| presumably they want to use to make money.
|
| Except they can't leave any record of its source, in any
| documented form. This includes server logs, data
| transfers, emails about data, meeting minutes about data.
|
| So they create some isolated network, run by a third
| party contractor, that transfers encrypted data from the
| taps to a store, then decrypts. All of which brings us to
| the most difficult part.
|
| Who does... what with it?
|
| The source data itself is radioactive. Who knows when
| "pricing strategy for company X" or obvious equivalent
| might pop up in the stream?
|
| So you... what? Exclusively touch it via algorithm that
| outputs only aggregate information? How do you possibly
| code and maintain that pipeline, sight unseen?
|
| All while risking an incredibly profitable business.
|
| Or, you know, you just operate as an honest IaaS provider
| and make $10B in revenue / quarter with a 25% growth
| rate...
|
| [1] https://aws.amazon.com/compliance/programs/
|
| [2] https://www.law.cornell.edu/uscode/text/18/2511 (?)
| dv_dt wrote:
| I thought Amazon was already organizationally constructed
| in very small functional units which each are encouraged
| to export their units "interface" in an formal way. Is
| the source data traceable if it becomes anonymized
| product sales samples exported to apis that mix into a
| pile of legit data and all fed into some sales analysis
| engine?
|
| The unit could be the "open sales modeling unit" that
| just supplies one data feed among thousands.
| airstrike wrote:
| > breaking into a Walmart with a ski mask and assault
| rifle and stealing a bunch of blu rays vs recording
|
| I'm ready to watch that movie
| darkerside wrote:
| You're right that they are different, but maybe not as
| different as you think they are.
|
| > If amazon copied all your proprietary data, you would
| almost certainly never notice, no criminal law would
| apply, and you'd have a hell of a time proving it in a
| civil suit.
|
| If Amazon were doing this and profiting from it, that
| would essentially be a criminal conspiracy that reaches
| to the leadership of the company. Is it possible? Sure.
| Is it likely? I tend to think conspiracy theories are
| rarely true. Would it be caught? I believe it would
| likely be caught.
|
| Companies get things done by having meetings, informing
| their hierarchy, and following executive decisions. In
| what meeting do you imagine this being discussed? Who
| floats this idea, and who signs off on it? I just don't
| see it happening. And if it does, I expect whistleblowers
| to put a stop to it.
| nieve wrote:
| Criminal conspiracies by corporate execs are not all
| uncommon in the history of business and presuming that
| you can't possibly run into one because you personally
| haven't is taking an unnecessary risk. One thing due
| diligence is supposed to look for is criminal behavior.
| This is not because they never find it.
| reaperducer wrote:
| _Criminal conspiracies by corporate execs are not all
| uncommon in the history of business_
|
| Actually, they are quite uncommon, which is why they make
| headlines when discovered.
|
| I'm not taking a side here, just pointing out a fallacy.
| akoncius wrote:
| as sibling comment author mentioned, look at dieselgate.
| it was huge conspiracy against emissikns regulations and
| they did it relatively well for multiple years. and it's
| not like it's simple hack in software. this solution
| required manufacturing additional special purpoce
| devices, adjusting assembly line, engineering and so on.
| definitely it must have some design stages, testing,
| actual implementaion done.
|
| main thing here is that in big corps you can divide big
| (evil) task into smaller steps which could be defined as
| non-evil in isolation, and nobody in actual
| implementation people crowd would understand big picture.
| noizejoy wrote:
| I used to think a lot more like you and then
| Dieselgate[0] happened.
|
| [0] https://en.wikipedia.org/wiki/Volkswagen_emissions_sc
| andal
| derriz wrote:
| For me it's not at a similar level.
|
| For one, banks are far more regulated than Amazon is. If
| governments funded departments with 10s or 100s of
| thousands of employees monitoring and regulating cloud
| computing services, then it might be similar.
|
| But the most significant difference is that if the bank
| seizes my money, I'll know about it pretty quickly and
| can respond. If Amazon sniffs through my commercial data,
| I'm unlikely to ever know. Most people are far more
| tempted to do wrong if they know if the chances of
| getting caught are miniscule.
| hammock wrote:
| Banks mightn't seize your money. They certainly take the
| data from your bank accounts and monetize/resell it. This
| is a dirty secret, and pervasive.
|
| How else do you think "closed-loop" measurement of
| marketing effectiveness, and retargeting based on
| purchase behavior are done? How else do you think
| suppliers can pull a D&B report on your company showing
| your bank account balances?
| mulmen wrote:
| Banks definitely seize your money. When I was a young
| teenager my parents encouraged me to put my lawn mowing
| money in a bank account. I had a total of $100.00! We
| went over to Bank of America and I opened up an account
| and deposited my hard earned cash. A month or two later I
| tried to withdraw some cash and was told I had no money.
| My full $100.00 had been consumed by insufficient balance
| fees.
|
| A valuable if painful lesson to learn. I still do all my
| personal banking with a credit union and consider my
| relationship with banks to be adversarial. They only own
| my debt, never my cash.
| magnetic wrote:
| > A month or two later I tried to withdraw some cash and
| was told I had no money. My full $100.00 had been
| consumed by insufficient balance fees.
|
| Is that an exaggeration? It amounts to $100 or $50 a
| month in "low balance fee"!
|
| All the banks I've looked at had a fee under $10.
| mulmen wrote:
| I think it may have been more than a couple of months,
| IIRC the fee was $20.00. This was a very long time ago.
| deliriouspuppet wrote:
| > To do any useful computation on your data (read, what
| you're using all AWS for) they have to have 100% visibility
| into your data.
|
| This is true, but it doesn't have to be this way [1].
|
| [1] https://en.wikipedia.org/wiki/Homomorphic_encryption
| pvarangot wrote:
| That would increase their computation costs by a fair
| bit, it would be more expensive to run the same amount of
| computation on their cloud using fully homomorphic
| encryption, even without taking the engineering costs on
| your side into account.
| TimSchumann wrote:
| I'm aware, but thanks for posting nevertheless. I've
| actually read Gentry's thesis. Last I looked into FHE
| though it was something like 14 times to 100 times as
| inefficient (either in time or space depending on the
| scheme) as operating on unencrypted data.
|
| Now things may have changed since then, but I'd imagine
| it's not yet gotten down to 1.X inefficiency multiplier
| regardless of the FHE scheme you're using.
| qaq wrote:
| This amazes me it's so much easier at that scale to deal with
| 6-10 boxes vs all the crap that comes with AWS. Don't want to
| deal with managing them there are companies that will do it for
| you and you will have an actual on call people that are
| accountable to you. Unless you are doing 6+ figures a month in
| AWS spend have fun trying to have same level of service.
| dfsegoat wrote:
| I genuinely want to understand the point you are presumably
| making here, but I'm honestly having a tough time with
| understanding what it is.
| CamperBob2 wrote:
| "If you use their boxes, they own your data. Don't use
| their boxes."
| AmericanChopper wrote:
| I'm a big believer in use cases that fit on-prem solutions
| like that. But you're dreaming if you think a 6-10 box
| operation is going to come close to the same service levels
| as AWS, and if you want to replicate the developer
| experiences that you can achieve on AWS, you're going to have
| to devote a lot of resource to it. Whether scaling works well
| on-prem depends entirely on your scaling requirements. If you
| have bursty loads, or sudden increases in utilization, then
| scaling is going to be painful, because it will require
| hardware procurement, which is a slow process. There's
| situations where it makes sense, but there's way more factors
| than you're considering in this comment, and you've
| completely misrepresented what the trade offs are.
| qaq wrote:
| I am not only not dreaming I've being running workloads
| like that for a long time. Both in cloud and colo. If it's
| my money sanity or ass on the line colo is my strong pref.
| I def. do not want to replicate developer experience of AWS
| in Colo as AWS has s ton more moving pieces which are black
| boxes and have arbitrary limits. Scaling is a disingenuous
| point for most e-commerce apps as you generally have RDBMS
| that do not scale horizontally so cloud or no cloud your
| bottleneck is the same. The price point at which say
| Spanner would outperform a cluster of RDBMS on high end
| boxes is way south of 100K/month and no of the shelf
| e-commerce software would support it anyway.
| AmericanChopper wrote:
| Say you completely ignore scaling. The two things you
| simply cannot replicate at that scale are redundancy and
| operational resource. AWS has their entire operations
| team working at all hours of the day and night supporting
| their infrastructure. They also offer some of the most
| highly redundant services in the world. There is simply
| no way you could ever dream of replicating those service
| levels with such a small operation, and if you were to
| even attempt it, it would require an absurd level of over
| provisioning. As I said, you're completely
| misrepresenting what the actual trade offs are, and
| there's no possible way your claims about replicating AWS
| service levels is even remotely plausible.
| qaq wrote:
| AWS has amazing marketing the truth of the matter is AWS
| Region has worse downtime than a single top tier DC.
| Mainly due to nightmarish complexity of their control
| layer. They had outages that lasted many hours in a row
| multiple times. You need to carefully separate marketing
| claims from operational reality and actual track record.
| When US East has major issues there is not enough spare
| capacity to spin up everything that was running there in
| other regions.
| 1_person wrote:
| The CDN will be fronting most of the load, behind that 10
| decently specced servers running sanely architected code
| can scale to millions, if not tens of millions of requests
| per second.
|
| Drop the servers in HA sets of 2-3 nodes across 3-4
| regions, anycast your service endpoint from each cluster.
| The hardest thing to replicate without AWS is the 6-7
| figure bills.
| AmericanChopper wrote:
| What you're describing is "good enough service levels for
| what I need" not "the same level of service as AWS" (or a
| superior level, as the parent comment implied).
|
| If some sanely architected code was all you needed, then
| you'd expect at least other cloud/IaaS providers to be
| able to match AWS service levels. Which they can't, and
| which some little software shop most certainly cannot
| either.
| qaq wrote:
| Look at actual downtime of US East over the years.
| all_blue_chucks wrote:
| So what do you do when you are featured on CNN or
| whatever and you need to scale up massively in a matter
| of minutes? Do you just let all those sales go?
| swarnie_ wrote:
| I love B&H, we planned family holidays from the UK specifically
| around buying from this shop. When the $/PS exchange was
| healthier we got some real bargains!
| mr_toad wrote:
| It's just as likely one of your own administrators could steal
| it and sell it to a competitor. A lot of espionage is inside
| jobs.
| zucker42 wrote:
| Couldn't they use Azure?
|
| Of course there are other reasons to use physical servers.
| tegansnyder wrote:
| Its my understanding a some of the large bricks and mortar
| retailers also stray away from hosting on AWS for these same
| reasons.
| namelessoracle wrote:
| Home Depot refuses to use AWS and partners with Azure for
| this reason.
| Analemma_ wrote:
| I think that's less about being afraid that Amazon will steal
| their data, and more that they don't want to give any money
| to an entity already steamrolling them
| Kalium wrote:
| Some are legitimately afraid that AWS will deprive them of
| the ability to scale during peak times, like holiday
| shopping seasons. I've heard claims of this happening to
| more than one retailer.
|
| Personally, I wonder if that isn't an emergent property of
| a _lot_ of people trying to scale at once.
| jaywalk wrote:
| Walmart won't even allow their suppliers to use AWS.
| throwaway_aws wrote:
| Throwaway account for obvious reasons.
|
| In the past, AWS has used the data from third party hosted
| services on AWS to build a similar service and in fact start
| poaching their customers.
|
| Source: I used to be at AWS and know the PM & his manager who
| built a service this way. I was hired on that team.
| [deleted]
| 3pt14159 wrote:
| Hold up one second. Is this something that they're actually
| open to doing? Surely part of their ToS isn't about stealing
| data on their physical infrastructure to enable other aspects
| of their business. Right? Has any data centre ever done this?
| fma wrote:
| Wonder if they are on Microsoft's Azure now?
| jaywalk wrote:
| Just did a tracert to their website. After hitting b-h-
| photo-v.ear1.newark1.level3.net it goes through a couple
| routers on an IP block they own before hitting their IP.
|
| Safe to say they are not on Azure.
| deanCommie wrote:
| Sounds like this head of IT isn't very good at his job if he
| can't explain the difference between EC2 access, databases, and
| web requests over TLS
|
| There are ways that you can use AWS that Amazon would have no
| way to access any of your data even if they wanted to.
| TimSchumann wrote:
| > There are ways that you can use AWS that Amazon would have
| no way to access any of your data even if they wanted to.
|
| Please explain, as I'd like to know how.
| jedimastert wrote:
| > There are ways that you can use AWS that Amazon would have
| no way to access any of your data even if they wanted to.
|
| Is it worth the extra effort and moving already functional
| servers to do so?
| vageli wrote:
| If any decryption of your data occurs on AWS hardware (i.e.
| if your software in AWS has access to your unencrypted data),
| then wouldn't AWS also have access to it if they wanted? Even
| with encrypted volumes, etc, the decrypted data is present in
| memory, AWS controls the box with the memory in it.
| TimSchumann wrote:
| Yep, this is how computers work. Not saying this to be
| snarky, just... it's surprising how many people don't know
| this. And when I say 'people' I mean 'Professional Software
| Engineers with Years of Experience in the Industry'
| beagle3 wrote:
| They have 100% hypervisor access. To give them zero
| knowledge, you need full homomorphic encryption which is
| impractical at this point (and likely for a while).
|
| You may trust them not to abuse hypervisor access, but they
| still have network "meta" data - it could tell them how many
| transactions clear against credit processors (though not the
| actual amounts if encrypted), a good idea general
| distribution of page views With respect to time and user ip
| (though not the exact pages), times of day, demographics of
| users (Geo locations and ISPs, for example)
|
| If you don't trust them not to peek at what they can, don't
| use them. He is perfectly right.
|
| There are other cloud providers who aren't competing with B&H
| and would be a better choice. But amazon is a direct
| competitor to B&H, even if they do have an IT barrier - they
| cross subsidize; any $ paid to Amazon helps it against B&H.
| sudosysgen wrote:
| Even if homomorphic encryption was practical, you would
| need hardware to decrypt that would have to be either on
| the cloud oron premise.
| [deleted]
| c3534l wrote:
| I've heard about these kinds of practices anecdotally. We really
| need some anti-trust action in the US. We have these laws that
| give the federal government a lot of power to force companies to
| play fair, but we don't use them because of politics.
| saadalem wrote:
| Those were the dirtiest business tactics of Amazon Nobody can
| beat Amazon's margin. Amazon "invites" you to sell on their
| marketplace. You hustle. You innovate. You test the market. You
| risk your time and money. Until FINALLY you nail it! After weeks
| or months of hard work you finally find the right product at the
| right price... SUCCESS! You start making money! Everything is
| amazing...
|
| But "someone" has been watching you! The "owner" of YOUR
| customers has been collecting ALL your data. Watching your
| progress, your growth, your competitors, your margins, your
| shipping costs, etc. THANK YOU FOR PARTICIPATING! Amazon will
| copy your product. Add their private label "Amazon Basics" to it.
| Sell it at an unbeatable price. Attach FREE Amazon Prime shipping
| to it. Position the exposure of their product on their website
| better than yours. In a matter of days, you will be OUT of
| business! THANK YOU FOR PARTICIPATING IN AMAZON MARKETPLACE!
| theturtletalks wrote:
| 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.
| alaskamiller wrote:
| 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.
|
| Both games suck tbh.
| partiallypro wrote:
| I think Shopify should experiment with a centralized market
| place where stores can opt in. If you opt in, your store
| items are listed in a central location searchable in at
| single point, just like Amazon. Your item listing in the
| central market place merely directs you to YOUR branded
| store, allowing you to check out, and see your other
| products. That solves a huge problem of visibility that
| Amazon has mastered.
| theturtletalks wrote:
| Shopify already has sales channels that users can tap
| into like Amazon and eBay. If they themselves build a
| marketplace, I'm sure those channels will opt out.
| Guest42 wrote:
| Does amazon allow seller sites to have lower prices?
| _0ffh wrote:
| Not afaik.
| IG_Semmelweiss wrote:
| 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.
| julianlam wrote:
| > 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.
| yojo wrote:
| This is a common arbitrage tactic. Seller carries no
| inventory, lists multiple products on eBay for slightly
| higher than the Amazon price, and buys/ships from Amazon if
| anyone buys the eBay listing.
| mrkurt wrote:
| This happened to me when we de-Amazoned, even from direct
| website purchases. Lots of them use Amazon for fulfillment
| even if they sell directly.
| chrischen wrote:
| Amazon does have to pay. It is an opportunity cost to them.
| theturtletalks wrote:
| Sure, another seller could take their spot and they are
| potentially losing that ad money, but with their strategy,
| they can price out anyone since they don't pay seller
| commissions either.
| throwaway888abc wrote:
| Surprised ? Also, you choose to give the data by using the
| platform. Terms and condition apply.
| Tostino wrote:
| It's almost like there should probably be some oversight on one
| of the most powerful entities on the planet to stop these anti-
| competitive practices.
| toomuchcredit wrote:
| Regulating them to a pure marketplace is the best outcome we
| an hope for, i.e. require them to divest any product they
| sell in the marketplace. India took some steps in that
| direction last year. Why not in the US?
| missedthecue wrote:
| Is it really in the spirit of anti competitive laws if the
| consumer wins?
|
| This is more like one business owner (FBA seller) trying to
| sic the authorities on their competition (Amazon Basics) in
| order to keep a competitive advantage. This seems more anti
| competitive than what Amazon is doing
| CydeWeys wrote:
| The consumer doesn't win in the end if there's only one
| major retailer that survives. There's lots of benefit in
| diversity of retailers competing against each other.
| tcbawo wrote:
| The consumer doesn't feel the effect of the consolidated
| marketplace until Amazon decides to start squeezing its
| customers. Once all the ducks are in a row, look out.
| Ensorceled wrote:
| Yes. Anti-monopoly laws are about overall society health,
| not just consumer protection. Having only a few large
| companies controlling large segments has massive negative
| effects on suppliers, employee wages, etc. etc.
| xyzzyz wrote:
| You might wish that this was the case, but in the US, the
| anti-trust law doesn't work this way.
|
| The law doesn't prohibit monopoly by itself.
| Monopolization is only prohibited if it restrains trade,
| or if the monopoly position was improperly gained. If
| Amazon attains monopoly position through superior
| products, innovation, or business acumen, it is very much
| legal in the US[1].
|
| I think it's hard to argue that Amazon undercutting the
| participants in its marketplace is restraining the trade:
| the complaint here is, as I understand it, that through
| better knowledge of the market, and better integrated and
| more efficient platform, it is able to offer same or
| better products at lower prices. I can't see how it
| restrains the trade, according to how FTC understands it.
| It would only be illegal if Amazon did sold these
| products below their own costs, and then planned to
| recoup the losses by raising the price after the
| competition is gone. I haven't seen any evidence that
| this is what's going on.
|
| [1] - https://www.ftc.gov/tips-advice/competition-
| guidance/guide-a...
| claytongulick wrote:
| Or, markets will shift away from abuse, and they will have
| difficulty regaining customer trust _cough_ Blockbuster Video
| _cough_
| FridgeSeal wrote:
| "Don't worry guys! The magical invisible hand of the market
| will fix this! Just like how it stopped abuse and
| exploitation by itself all those other times! This time it
| will _definitely_ work"
| taurath wrote:
| And now they can threaten what, the losses of 400k jobs if
| forced to not utilize their nation-state scale to screw
| competitors?
| dathinab wrote:
| Actually that thread doesn't work at all. Because
| restricting them might cost Amazone jobs BUT:
|
| 1. Not all of them, probably a negligible amount. (Just the
| ones responsible for crating/producing copied products, not
| any ones involved in any other area)
|
| 2. Create new jobs through fair competition in similar
| amounts as jobs lost, likely even more as more companies
| being involved means more operational positions like e.g.
| for book keeping.
|
| 3. (2. reformulated). Not restricting it will cost as much
| or more jobs due to small companies going out of business
| and amazon as a giant company can better optimize overhead
| of operation away compared to many small independent
| businesses.
| siruncledrew wrote:
| In all fairness, if Amazon doesn't copy your product, then some
| Alibaba store or Chinese manufacturer will and in a few weeks
| time you'll see the same product and description surface on
| Amazon under the name YUKOOLSEE and with 1000 5-star reviews
| already.
|
| /s
| alacombe wrote:
| It is arguable that all retail chains have been doing this with
| their store branded product lines.
| viahoptop wrote:
| What is the difference between this and the store brands at
| supermarkets?
| Guest42 wrote:
| Supermarkets don't have even a fraction of the internal
| business data which leads to a more competitive marketplace.
| [deleted]
| theturtletalks wrote:
| This is different that Costco selling their own brand vodka
| or toilet paper because buyers can see those items side by
| side when shopping. Amazon has their products on the top
| every time and if 3rd party sellers want to be next to them,
| they have to pay for ads. Amazon doesn't pay for its own ads
| so they can effectively hide their competition.
| dathinab wrote:
| I believe amazone should pay for their own advertisement to
| well themsell and prices should be transparent (amazone has
| to pay them self what other would have to pay), _because
| then they would still need to pay tax_ for this. At least
| in countries where taxes are not very low this could make
| the situation slightly better. Through not that much better
| tbh.
| heyoni wrote:
| You think store brands are sitting side by side with name
| brands? If anything they're at eye level. And with amazon,
| they can't actually delete the listing, but maybe you have
| to scroll down a bit.
| reaperducer wrote:
| _You think store brands are sitting side by side with
| name brands?_
|
| Based on my last trip to the supermarket, absolutely.
|
| The stores have to put their brand next to the name-
| brand, or nobody will see their stuff.
|
| They can't just shove the name brand items to the bottom
| of the shelf because the brands have done all of the
| advertising, and those are the logos, colors, and
| packaging that people are looking for.
| adamc wrote:
| Yeah, this. I often buy house brands of things like
| Ibuprofen (same stuff, but cheaper), but they absolutely
| put it next to the well-advertised brands, because
| otherwise finding it would be a nightmare and nobody
| would bother.
|
| Display in a store is much more limited than online. They
| have to put like items together if they want customers to
| find them.
| heyoni wrote:
| Then that's even worse! They're counting on the fact that
| you're going to look at one item, to make you see theirs.
| The point isn't that Amazon is great, it's just that
| stores do the exact same dumb shit and we've grown
| accustomed to it.
|
| Why the sudden outrage?
|
| PS: I didn't read the article because of what I consider
| an even more grotesque form of consumer
| manipulation...blocking your news website from displaying
| the full article unless you interact with it, and
| breaking reader mode so that you have to see their
| ads/graphics. I'd get my pitchfork out for that.
| wh1t3n01s3 wrote:
| Here the supermarkets buy from the private label. He is still
| in the business. Maybe with less margin, but bigger volumes.
| friendlybus wrote:
| Not much. Walmart crushed an art supply company by enticing
| them in, copying the product at a lower quality and price,
| then slowly reduced shelf space of the other guy as he
| deflated. He ended up worse off than when he started.
| Ensorceled wrote:
| Nothing. That is also a bad thing.
| gundmc wrote:
| Traditional retailers buy their inventory from manufacturers
| to place on the shelf and in turn sell to customers. There
| may be some agreements on buying back unsold inventory, but
| generally the retailer takes on risk for the inventory they
| are selling.
|
| Amazon, conversely, only provides the platform connecting
| manufacturers to customers. They may hold consigned inventory
| in their warehouse, but they typically don't take on the risk
| for any unsold stock.
|
| This is a big difference between grocery private labels and
| Amazon basics. Amazon is reaping the benefits without taking
| on any of the risk.
|
| Disclaimer: I don't work in retail, this is my understanding
| based on reading but I could be mistaken.
| jkukul wrote:
| With its huge market share Amazon has practically a monopoly
| as a marketplace or as an online-retailer, depending how you
| define it.
|
| If a supermarket starts playing dirty there are many others
| in which you can sell your product. If Amazon steals your
| product, you have no other marketplace to turn to.
|
| Amazon gives an opportunity for many businesses to flourish,
| but then can kill them on a whim. "Live by the Amazon, die by
| the Amazon."
| Terr_ wrote:
| IIRC supermarkets typically don't manufacture their own, they
| offer a re-branding partnership with an existing product.
| JoeAltmaier wrote:
| Of course they do. Like everybody else. Who doesn't do market
| research?
| michaelt wrote:
| Some companies foster cordial relationships with their partners
| by staying strictly in their lane.
|
| For example, ARM licenses CPU core designs to chip
| manufacturers, but they don't make their own chips, as doing so
| would turn their customers into their competitors.
|
| Businesses like contract manufacturers are similar - Foxconn
| wouldn't start making their own smartphone.
|
| Of course, not every company takes that approach.
| MaxBarraclough wrote:
| Not that it really impacts your point, but Foxconn do make
| consumer products: RAM modules and motherboards.
| aguyfromnb wrote:
| > _Some companies foster cordial relationships with their
| partners by staying strictly in their lane._
|
| That happens to be ARM's business model at the moment. It
| isn't guaranteed to be their model tomorrow, nor are they
| doing it be friends with partners.
| MagnumPIG wrote:
| Breaking news: Amazon is evil
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