[HN Gopher] California sues Amazon for preventing 3rd-party sell...
___________________________________________________________________
California sues Amazon for preventing 3rd-party sellers being
cheaper elsewhere
Author : em-bee
Score : 230 points
Date : 2022-09-16 13:53 UTC (9 hours ago)
(HTM) web link (www.engadget.com)
(TXT) w3m dump (www.engadget.com)
| em-bee wrote:
| original title: California sues Amazon for preventing third-party
| sellers offering cheaper prices elsewhere
| NickC25 wrote:
| As they should. Amazon should have no ability to dictate that an
| item isn't cheaper on a company's own property (digital or
| physical retail) than on Amazon's site.
|
| I helped a buddy build out his brand in the US, and we listed on
| Amazon as well as our own website. They take a big cut of
| everything and still demand that we essentially lose additional
| margin by not allowing us to set our own price on our own
| website.
| tantalor wrote:
| > Amazon should have no ability to dictate
|
| Well, in a perfect world a marketplace like Amazon should be
| able to do whatever they want, and if the merchants & customers
| don't like it they can take their business somewhere else.
| Market forces, consumer choice, etc.
|
| Except in this case, Amazon has basically made that impossible
| with their illegal monopolization of e-commerce.
| [deleted]
| NickC25 wrote:
| Exactly. Like it or not, they're a monopoly - they need to be
| regulated like one. Not only are they a monopoly, they can
| run the entire Amazon storefront at a huge loss due to how
| profitable AWS is. This $ delta allows them to engage in some
| incredibly (unethical/anti-competitive/anti-consumer)
| practices.
| jjeaff wrote:
| I hope California wins this. This is such a frustrating thing
| that Amazon does enforce. They will ban you if they find out you
| are selling the same item for cheaper on your own website or on
| eBay.
|
| To me, this is akin to the credit card companies disallowing a
| discount for paying with cash/check. Which was made illegal.
| Though I'm not sure if by law or legal case.
| allocs wrote:
| Genuinely asking, why is this bad (for either example)?
| insane_dreamer wrote:
| Its problematic because Amazon has such large control over
| online shopping, that setting anti-competitive rules further
| increases its control to where it becomes almost
| monopolistic.
| tehlike wrote:
| Amazon charges money, say 5% of transaction value.
|
| If an item is 100$, seller gets 95.
|
| Ok their own website, noone takes a cut, all money goes to
| seller.
|
| In this case they might want to sell for 98$, and then both
| customer and seller wins.
| hedora wrote:
| Amazon gets paid to place targeted ads.
|
| They use the ad money to give five percent cash back on
| purchases.
|
| Manufacturer advertises "effectively pay 5% more on our web
| site or Amazon will club a baby seal (or worse)!"
|
| The advertising campaign falls flat.
|
| Consumers are killed/maimed by a counterfeit item they
| bought on Amazon.
|
| Manufacturer costs go up 10% (spent on lawyers and training
| customer support as emergency response workers).
|
| Amazon begins production of a higher-margin, but less
| expensive and non-deadly knock off, and promotes it above
| the original product.
|
| Repeat.
| smallerfish wrote:
| You wish it's 5%.
|
| Play around with this (and don't enter 0 for shipping,
| because they have a divide by zero error):
|
| https://sellercentral.amazon.com/hz/fba/profitabilitycalcul
| a...
| scarby2 wrote:
| Depends on the item value. It's usually closer to 10%
|
| The higher margin on the left is what amazon charges for
| fulfillment (which can be quite a lot).
| lots2learn wrote:
| Amazon's perspective is that they are a store / marketplace
| that a seller can optionally sell on. They are ensuring
| their customers get the best price. Like any store, if you
| don't like their terms then don't sell your product in
| their store. Pretty solid logic I think.
|
| But the reality is they are a store that dwarfs every other
| in customer reach making it difficult for small businesses
| to grow without utilizing Amazon as one of their sales
| channel. Hence, Amazon's 15% commission gets baked into
| everything even if it's not sold on Amazon. I think the law
| needs to evolve in a way to recognize scenarios like this
| where there is massive asymmetry - not necessarily a
| monopoly - between one dominant market player and others
| which is harming the consumer.
|
| Amazon's response of course would be "no fair; you're using
| us for product discovery but then giving the sale to the
| brand owner". Which has some validity. If you took away the
| commission, then they would be relegated to a search engine
| that relies on ad revenue only. But that would mean lower
| prices so consumers would win in the end.
| NickC25 wrote:
| > _If you took away the commission, then they would be
| relegated to a search engine that relies on ad revenue
| only._
|
| They'd also still be a major corporation / quasi-monopoly
| that powers like 80%+ of the internet and is wildly
| profitable. I see no problem with taking a small cut of
| their revenue away that they only have due to shady
| business practices. But Wall Street would cry _Won 't
| anyone think of the shareholders?_
|
| I wouldn't give a shit if that caused Jeff's net worth to
| drop 5% or 10% - the guy would still have more money than
| the rest of the world save for 4 or 5 people rather than
| just 1 or 2 people.
| ClumsyPilot wrote:
| > They are ensuring their customers get the best price
|
| No, they are making sure they get the biggest cut
| cool_dude85 wrote:
| >Amazon's response of course would be "no fair; you're
| using us for product discovery but then giving the sale
| to the brand owner".
|
| Almost as bad as someone walking into a brick and mortar
| store and then going to some big website to actually buy
| the TV. No fair indeed.
| Spivak wrote:
| I mean it kinda is no fair, the ability for people to do
| this is a fairweather tolerance because big box still
| come out ahead even when price matching online retailers.
| The moment that stops being the case is when you will
| start to see stores charging covers.
| scarby2 wrote:
| I always wonder how many people actually do this. It has
| to be a pretty significant difference for me not to
| actually buy it at the store.
|
| If I'm at the store and i can put something in my cart
| and buy it then I'm not going to order it online and wait
| for delivery to save $5. Also delivery is extremely
| unreliable these days...
| Supermancho wrote:
| > I always wonder how many people actually do this
|
| From watching other people at stores, it's maybe 15%? For
| goods that need to be installed or carefully handled,
| it's less common. Headphones? Pricecheck. Mechanical
| Keyboard? Pricecheck. Washer and Dryer? Most people
| pricecheck even though it seems like something they
| wouldn't. Turns out that most people shop around for
| those, so internet pricechecking is part of it. Food
| items that seem too expensive? Pricecheck. You can save a
| bunch on dry/bottled goods. Amazon Prime feels like a
| Costco membership. You have to make sure you use it, to
| justify it.
| onepointsixC wrote:
| >They are ensuring their customers get the best price.
|
| No they are not. They are setting the price on their
| platform to be the minimum price. That's very different
| and bad for consumers.
| thayne wrote:
| I can think of two reasons:
|
| 1. It hinders competition. You can't really provide a
| marketplace thay competes with Amazon by having lower prices
| (for example by taking a smaller cut from sellers), because
| sellers aren't allowed to list lower prices on your
| marketplace. Or alternatively, you can't compete by selling
| directly from you website, because you can't offer a lower
| price than on Amazon.
|
| 2. It means even if you buy directly from the seller, you
| have to pay a higher price because it is listed on Amazon. In
| effect people who bu directly are subsidizing a lower price
| for people who buy on Amazon. This applies to the credit card
| case as well.
| LatteLazy wrote:
| Surely it encourages competition: Since the cost cannot
| just be passed onto consumers, the company making the
| decision over where to list has an incentive to actually
| consider other options?
|
| Also, the only reason we want competition is because it
| _should_ get lower prices for consumers. Competition isn 't
| a good in and of itself, it's just a means to an end. So if
| more competition means higher prices for the same goods,
| then who needs it?
|
| I don't quite get your second point: if the consumer is
| paying the same price, why do they care whether 100% goes
| to the supplier, or 99% or 0.01? If an item costs me 10USD,
| I don't care who get's that money, I just care that I don't
| get to keep it right
| thayne wrote:
| > why do they care whether 100% goes to the supplier, or
| 99% or 0.01? If an item costs me 10USD, I don't care who
| get's that money, I just care that I don't get to keep it
| right
|
| But you care if it costs you $10 instead of $9. My point
| is that Amazon's rules means the price is higher for
| everyone, in order to cover Amazon's fees. Without them,
| if you are willing to buy from somewhere less convenient
| than amazon, you can get a better price.
| keb_ wrote:
| > Also, the only reason we want competition is because it
| should get lower prices for consumers.
|
| That is not the only reason free market capitalists want
| competition. Competition should also promote a variety of
| choice, innovation, and dynamism in other services to
| consumers, not just low product prices.
| stetrain wrote:
| This rule doesn't just mean they can't raise prices on
| Amazon, it means they can't lower prices elsewhere.
|
| If another marketplace takes a lower cut, allowing the
| seller to set a lower price while keeping margins, they
| can't do so under this arrangement without taking a hit
| on Amazon sales.
|
| The market should be encouraging finding the lowest-
| margin distribution path, not artificially propping up
| prices elsewhere to match Amazon's margins.
| cortesoft wrote:
| On the other hand, as a shopper, I like knowing that the
| price I see on Amazon is the lowest price I can find the
| item. I don't want to have to check the price of every item
| on the manufacturers site to see if I can get it cheaper
| there.
|
| Just imagine I want to by a widget, and there are many
| manufacturers. I can search on Amazon, and get all of the
| prices for all the manufacturers right in one place, and I
| know that each price I see is the cheapest. I don't have to
| search for 10 different manufacturer websites and check
| each price. I can just sort by it, and then one click buy.
|
| I understand the anticompetitive concerns, but there is
| also a big advantage for consumers to be able to have a
| single market that has the lowest prices available and easy
| ordering.
| onepointsixC wrote:
| You prefer Amazon to dictate the floor price of something
| for the purpose of convenience? If you prefer to use
| Amazon, fine, but your choice shouldn't get to dictate to
| everyone else that there's no better deal else where.
| Amazon isn't getting you a better deal here, it's making
| sure there's no better deal else where.
| tchalla wrote:
| Yes there are many times big advantages to the
| individuals which aren't allowed by law nor should it be.
| [deleted]
| axiolite wrote:
| > I like knowing that the price I see on Amazon is the
| lowest price I can find the item.
|
| Yeah, but it isn't. I suggest you at least check the
| price on eBay before you buy from Amazon, if not Froogle
| and Walmart.
|
| Amazon's anti-competitive behavior here ONLY applies to a
| single seller, NOT to a manufacturer or a specific
| product. So while "Steve's Discount Stereo" can't sell
| that stereo for a lower price outside of Amazon, "Dave's
| Discount Stereo" certainly can.
| scarby2 wrote:
| does this apply when both dave's discount stereo and
| steve's discount stereo are subsidiaries of the "Dave
| Steve Stereo Corporation"?
|
| Maybe they both outsource inventory and order processing
| to the parent company only having distinct sales and
| marketing.
| Symbiote wrote:
| Sites like Pricerunner compare prices from many online
| shops.
| mentalpiracy wrote:
| I agree that it would be great as a consumer, but Amazon
| isn't offering anyone an honest list of those widget
| prices.
|
| If I am a widget manufacturer, selling on Amazon means I
| am no longer competing for your purchase with just my
| market peers. On some level, I am now competing against
| all listings in that category, including grey market
| resellers because Amazon doesn't police for shit.
| idontpost wrote:
| > I don't want to have to check the price of every item
| on the manufacturers site to see if I can get it cheaper
| there.
|
| No one is forcing you to comparison shop. You're trying
| to take freedom from others so you can financially
| justify being lazy.
|
| > I understand the anticompetitive concerns, but there is
| also a big advantage for consumers to be able to have a
| single market that has the lowest prices available and
| easy ordering.
|
| Not when that "lowest price available" is now inflated
| from what it would have been. Consumers lose because now
| they pay higher prices than they otherwise would have.
| wyre wrote:
| If I own a store I should be able to set my own prices
| without risk of being kicked out of a marketplace.
| frogblast wrote:
| Because Amazon can arbitrarily raise the prices of goods sold
| at Amazon, and have no concern about being undercut.
|
| For example, you are selling a Widget for $20. Amazon says
| "we'll take $10 of that ourselves". You can sell your Widget
| elsewhere at lower overhead, but you can't pass those savings
| on to the buyer, which means the buyer has no incentive to
| shop elsewhere, which means there are no market forces
| encouraging Amazon to reduce their cut.
|
| There are also no market forces preventing Amazon from
| increasing their cut. Tomorrow, they'll want $15 of that $20.
| legitster wrote:
| Is this unique to Amazon though? If you are Safeway, you
| wouldn't be happy if Nabisco started selling crackers half-
| price from their warehouse down the street.
|
| In most industries, MSRP agreement rules are pretty tightly
| enforced. California winning this case seems like it could make
| for a weird precedent.
| rajeshp1986 wrote:
| Its NOT! Even Walmart, Costco & other retailers enforce this
| on sellers. Sounds like California going after Amazon &
| Bigtech.
| tarakat wrote:
| No business is happy with competition. That doesn't make
| contractual collusion any less anti-competitive. If it is, as
| you allege, the norm, that only makes dealing with it more
| urgent.
| legitster wrote:
| The FTC considers certain exclusivity contracts as pro-
| competitive:
|
| https://www.ftc.gov/advice-guidance/competition-
| guidance/gui...
| insane_dreamer wrote:
| But exclusivity contracts is not what's in question here,
| which preclude you from selling elsewhere (as opposed to
| selling elsewhere but at a lower price). Also exclusivity
| contracts usually come with minimum volume commitments
| (since you're locked in). That's quite different than
| third-party sellers on Amazon.
|
| And it usually has to do with brand perception. Nordstrom
| doesn't want you selling that same product at Target
| because it devalues the brand.
| wbsss4412 wrote:
| To add, both parties usually get additional value out of
| an exclusivity deal, which is why they voluntarily enter
| into an arrangement.
|
| In the case of Amazon though (and I caveat this with the
| fact that I'm not aware of the full details) this is
| about being able to sell on Amazon _at all_ , there are
| no extra perks involved for the sellers.
| insane_dreamer wrote:
| Absolutely -- usually the value for the seller is a
| guaranteed (depending on exact terms) minimum volume of
| sales through a successful channel.
| legitster wrote:
| Based on the details of the suit and the anecdotes here
| though, it doesn't sound like Amazon actually drops the
| product. They withhold it from One Click or reduce its
| listing.
|
| The analogy in a retail setting might be losing your
| signage or being yanked from a good location.
| tarakat wrote:
| > being yanked from a good location
|
| "Reducing the listing" can potentially mean being pushed
| to page 23 of search results. In retail, that would be
| equivalent to never leaving the warehouse, available only
| upon specific request by a customer.
| tshaddox wrote:
| Right. The law isn't saying that they have to be happy
| about it.
| kgwgk wrote:
| The role of Amazon corresponds neither to Safeway nor Nabisco
| in your example.
| ceph_ wrote:
| The proper analogy would be Safeway forbidding Nabisco from
| letting their products be sold cheaper at any other
| supermarket. Which is ridiculous.
| ComputerGuru wrote:
| Yet that happens all the time. I've heard stories of
| companies going bankrupt after retail giant X learned
| competitor Y was selling their product for less, in breach
| of their contract (feel free to replace "contract" with
| Amazon ToS).
| legitster wrote:
| I worked for Frito-Lay for several years and you better
| believe that's how supermarkets work. More than once I've
| been called in the middle of the night to a store to rip
| down an endcap of chips because the store got undercut by
| another (and in their defense, why would they give us
| valuable floor space on a promotion that won't sell).
|
| I think though as comparison that the power dynamic is
| flipped. Exclusivity agreements usually were to the benefit
| of the store (against big brands at least). But against the
| small brands on Amazon, they favor Amazon.
| josefresco wrote:
| Is this a new policy? I sold a physical product on Amazon for
| several years and always had it listed for cheaper on my own
| website. No issues - maybe I was too small to bother with?
| themagician wrote:
| Amazon typically only enforces this when you are using Amazon
| FBA to fulfill from your own website.
| atdrummond wrote:
| I always thought if it was a DTC CPG your own site was
| allowed to offer it any price point. I only saw the
| restriction kick in on other marketplaces.
| [deleted]
| [deleted]
| jandrewrogers wrote:
| Terms like this are not uncommon in vendor contracts
| _generally_ , it is not specific to Amazon. It is often a point
| of negotiation and the details are specific to product
| categories. There are also common strategies for working around
| or minimizing the practical impact of these kinds of terms if
| you are the vendor. I've dealt with these kinds of terms for
| decades and I've never sold anything on Amazon.
|
| A factor here is that many vendors on Amazon, even major
| household brands, are surprisingly unsophisticated about how
| they structure their business with Amazon. I know someone whose
| entire business is helping major brands structure their Amazon
| business correctly to get what they want out of that
| relationship. They are overwhelmed with new work from companies
| that you'd think would be competent to do this themselves.
| wiremonger wrote:
| But Amazon isn't doing this so that they can make the other
| retailer's customers pay more. They're doing it to make sure
| their own customers pay the lowest price that prevails in the
| marketplace. It's just that this is the only mechanism they
| have for accomplishing that. Amazon can't control what a seller
| does elsewhere, but if a product is on sale elsewhere, they can
| basically tell the seller that they refuse to list it on Amazon
| unless the seller reduces the price to match the other
| retailer.
|
| So far most of the discussion is about pricing on Amazon vs.
| other retailers, but Amazon also does this between sellers of
| the same product on Amazon. If there are multiple sellers of
| the same product, Amazon will funnel their customers to the
| seller offer with the lowest price. The jargon term for this is
| "getting the buy box".
| CogitoCogito wrote:
| > But Amazon isn't doing this so that they can make the other
| retailer's customers pay more. They're doing it to make sure
| their own customers pay the lowest price that prevails in the
| marketplace.
|
| Those two statements sound like the same thing from different
| perspectives.
| barelysapient wrote:
| > But Amazon isn't doing this so that they can make the other
| retailer's customers pay more. They're doing it to make sure
| their own customers pay the lowest price that prevails in the
| marketplace. It's just that this is the only mechanism they
| have for accomplishing that. Amazon can't control what a
| seller does elsewhere, but if a product is on sale elsewhere,
| they can basically tell the seller that they refuse to list
| it on Amazon unless the seller reduces the price to match the
| other retailer.
|
| Nonsense. Selling on Amazon takes a 18-33% markup on the
| price of the product. Amazon forces this margin consumers by
| requiring sellers to not sell cheaper elsewhere; even though
| selling elsewhere may cost the seller less.
| wiremonger wrote:
| > Selling on Amazon takes a 18-33% markup on the price of
| the product. Amazon forces this margin consumers by
| requiring sellers to not sell cheaper elsewhere
|
| Amazon charges a referral fee on all 3rd party
| transactions. It varies by category, but is typically
| 8-15%. All retailers take similar margins. For instance,
| the largest retailer in the US is Walmart. Here is a list
| of their 3rd party referral fees:
| https://marketplace.walmart.com/referral-fees/.
|
| Given that the retailers all take similar margins, I think
| it's crazy to somehow paint this as Amazon forcing a markup
| on customers. All Amazon is doing is refusing to show
| products if the price on Amazon is higher than at a
| competitor. It's the seller who chooses what to do about
| that. They can either raise the price at the competitor,
| _or they can lower the price on Amazon_.
|
| Again, the retailer's margins are similar, so it shouldn't
| matter.
| barelysapient wrote:
| Fees are even less if they sell direct on Ebay or
| Shopify.
|
| > Given that the retailers all take similar margins, I
| think it's crazy to somehow paint this as Amazon forcing
| a markup on customers. All Amazon is doing is refusing to
| show products if the price on Amazon is higher than at a
| competitor. It's the seller who chooses what to do about
| that. They can either raise the price at the competitor,
| or they can lower the price on Amazon.
|
| Think of it this way: If that was the case, then why does
| Amazon require them to sell it for the lowest price on
| Amazon?
|
| Amazon has a dominant market position, extracting more
| margin then competitors, yet they engage in this anti-
| competitive and consumer damaging behavior of requiring
| sellers to sell products at low or below cost in order to
| 'play' on the amazon.com marketplace.
|
| Shameful.
| wiremonger wrote:
| > Fees are even less if they sell direct on Ebay or
| Shopify.
|
| eBay charges similar fees:
| https://www.ebay.com/help/selling/fees-credits-
| invoices/sell...
|
| Shopify is not a meaningful comparison, since it is not a
| marketplace. They don't bring customers to you. They're
| essentially a hosting and payments provider. You have to
| get traffic yourself.
|
| > yet they engage in this anti-competitive and consumer
| damaging behavior of requiring sellers to sell products
| at low or below cost
|
| Is your position that they are increasing the prices
| consumer pay or that they're decreasing them?
| AbrahamParangi wrote:
| But by doing so they _raise_ the price which prevails in the
| marketplace to their benefit and at a cost to consumers.
| wiremonger wrote:
| They (as in, Amazon) are not setting prices. The 3rd party
| sellers decide what the prices are: they can either lower
| the price on Amazon or raise the price at the other
| retailer. Amazon doesn't really care; they just want to
| sell stuff and take their cut. And ensure that customers
| don't develop a habit of price shopping everything after
| they do all their research on Amazon.
| AbrahamParangi wrote:
| By insulating themselves from price competition they
| indirectly increase prices seen by consumers.
|
| Consider the counterfactual case: if there was an Amazon
| competitor with higher efficiency they could compete by
| offering a lower take-rate. Sellers could then sell the
| same product with the same margin at a lower price, and
| buyers would benefit from those lower prices.
|
| Instead, Amazon is using its market power to prevent
| alternative stores from competing with it on price by
| hamstringing sellers. This means that while the sellers'
| margin is exposed to competitive pressure, _Amazon's
| margin is not_. And that means higher prices.
| MisterBastahrd wrote:
| I think any manufacturer will tell you that one of the worst
| ways to do business is to sell your product for less than
| you're listing it in the storefronts of companies willing to
| buy from you for retail. If you're going to undercut your
| business partners, they will find someone else to do business
| with.
|
| Most manufacturers with their own storefronts won't discount
| product unless they've allowed it in other storefronts and / or
| until the product has been discontinued. Don't bite the hand
| that feeds you.
|
| On the other hand, Amazon enforcing this as a rule is sort of
| ass-backwards.
|
| I remember a 2007ish USSC case that utterly changed the premium
| cigar market because it allowed manufacturers to enforce MSRP
| against gigantic volume discounters, which raised prices across
| the board overnight but also gave the manufacturers breathing
| room when it came to their own profit.
| themagician wrote:
| Was 100% true years ago. Now it's less so.
|
| With Amazon, as with local retail, there are people who are
| willing to pay more simply for the convenience. Elasticity
| varies by category and item, of course, but people would be
| surprised just how many manufactures do undercut retailers
| and distributors that they sell to.
|
| Part of this is that retail has tried to maintain its >50%
| margin for items that it doesn't even sell in store anymore.
| Manufactures know this and effectively cut their discount by
| selling an item $10 themselves, while only giving the
| retailer 40% discount. Retail still wants their >50% margin,
| so they will sell that same item for $11 both online and at
| B&M. In many cases this actually works out well for everyone.
| You would think that everyone would just buy direct and save
| a dollar, but you'd be surprised how many people want the
| convenience or simply have loyalty to a retailer for some
| reason.
| gmadsen wrote:
| the difference is that amazon is an online monopoly with
| insane fees on sellers. Forcing them to use the pricing on
| amazon elsewhere, ensures people buy it on amazon, and
| ensures amazon can continue to bleed sellers for however much
| they deem appropriate.
| wiremonger wrote:
| > with insane fees on sellers
|
| We sell on Amazon. The fees are not insane. It varies by
| category, but typically they range from 10-15%. Amazon
| brings tons of value to the relationship, so we're happy to
| pay that fee.
| theturtletalks wrote:
| 10-15% could be 50-60% profit for most sellers. Sure
| they're beneficial to you now, but what happens when
| Amazon starts private labeling the same things you sell?
| Or your supplier starts selling on Amazon and
| undercutting you? There's a reason new DTC brands avoid
| Amazon and that's cause you're not building a customer
| base or your brand, just helping Amazon build there's.
| wiremonger wrote:
| > 10-15% could be 50-60% profit for most sellers.
|
| Yup. Amazon provides an extremely valuable service to us:
| they provide a stream of customers who are at the end of
| the sales funnel and ready to convert because they trust
| Amazon's platform.
|
| > What happens when Amazon starts private labeling the
| same things you sell? Or your supplier starts selling on
| Amazon and undercutting you?
|
| This is going to blow your mind, but we compete against
| _both_ Amazon Basics _and_ our factory.
|
| We compete with Amazon Basics by selling a differentiated
| product. Amazon will never be able to compete in every
| product niche and at every level of
| quality/differentiation. It's actually not possible for
| the same reason that a centrally planned economy breaks
| down above a certain level of complexity: there are
| simply too many different niches that need to be
| addressed and the profit motive is the only system we've
| discovered which ensures that they get addressed.
|
| And we compete with our supplier by understanding the
| market better. They're good at manufacturing, but they
| don't really understand the end user. The type of
| personality that is good at operating a factory tends not
| to be the type of personality that is good at marketing.
| HN doesn't really like to hear this, but sales and
| marketing are actually an important part of running a
| business, especially one that sells to consumers.
| philistine wrote:
| So you're one good hire away from losing your business.
| I'd be sure to differentiate and have other venues for
| revenue.
| NickC25 wrote:
| > _There's a reason new DTC brands avoid Amazon and
| that's cause you're not building a customer base or your
| brand, just helping Amazon build there's._
|
| THIS X10000! Happened to a colleague of mine not too long
| ago. She developed a product, and sold on Amazon as well
| as her own storefront. As soon as she started seeing
| solid volume on Amazon, her product became an "Amazon
| preferred product" or something like that. However,
| within 2 weeks of getting that distinction, her sales
| dropped to 0 on Amazon. Why? Amazon started selling a
| nearly identical product - Amazon used the sales data to
| understand her product was popular, and went right to her
| supplier and cut her out of the equation.
|
| Amazon does this constantly.
| scarby2 wrote:
| > Amazon used the sales data to understand her product
| was popular, and went right to her supplier and cut her
| out of the equation.
|
| This is not a new thing either. Or unique to amazon. This
| has been going on for decades (or as long as retailers
| have had own label products). Every
| Walmart/safeway/target/kroger branded product is
| essentially a clone of somebody else's product that they
| figured out they could do cheaper.
|
| Years ago my MiL was selling her baked goods directly to
| a local grocery chain. They then decided to bring baking
| in house and came out with an almost identical product
| line.
|
| If you have a product that is easily copied/reproduced
| (and not patentable) then a retailer can remove your
| margin by doing it themselves and in this case your value
| becomes the brand/brand recognition and not the product
| itself.
| [deleted]
| lotsofpulp wrote:
| >the difference is that amazon is an online monopoly with
| insane fees on sellers
|
| It is very easy for me to not type Amazon.com and type any
| other website address. In fact, I am easily able to avoid
| Amazon for any non garbage goods I'm looking for. I can
| even go to eBay.com or aliexpress.com if I want equivalent
| garbage sold on Amazon.com
|
| I struggle to see how it is a monopoly in any sense. On the
| seller side, they can choose to use USPS/FedEx/UPS to ship.
| themagician wrote:
| It's easy for you, but not for others.
|
| And if you make a product getting it off Amazon is
| basically impossible, so it's in your interest to use it
| and maintain your own listings. If you don't, someone
| else will.
| ComputerGuru wrote:
| This is where financial lawyers come in handy and you learn why
| companies are selling a $4000 product for $1500 with a coupon
| code that is plastered all over their site and auto-applied to
| your cart on checkout instead of just reducing the price (even if
| still showing the old price with a strikethrough). They're
| forbidden from selling the product for less than MSRP or some
| ratio thereof, but the coupon applies a discount to your total
| order (without discounting the product itself) so it flies. Or so
| I've been told.
| Entinel wrote:
| I feel like most storefronts do this? I know Steam does this as
| well. Games are not allowed to be cheaper elsewhere than they are
| on Steam.
| haunter wrote:
| >Games are not allowed to be cheaper elsewhere than they are on
| Steam
|
| Afaik that's only if you sell Steam keys (which are generated
| by Valve on the request of the publisher that they then pass
| down to resellers like Humble for example or they sell on their
| own).
|
| BUT even then it sounds incredibly hard to enforce when Steam
| has a regional pricing policy and you can actually find games
| cheaper from official sources if you are in a "wrong" region
| Dracophoenix wrote:
| If key resellers are any indication, many games have Steam
| keys that can only be activated in certain regions.
| Sohcahtoa82 wrote:
| [citation needed]
|
| I frequently buy Steam keys on other sites such as Fanatical
| and the Humble Store because they're priced lower, so I don't
| think this is true at all.
| solardev wrote:
| That's not true, there is an entire ecosystem of Steam
| resellers. Check out isthereanydeal.com
|
| Almost always you can find Steam keys for significantly cheaper
| elsewhere (and I don't mean shady places like G2A).
|
| Greenmangaming, Fanatical, Humble, etc. are all wonderful.
| There's even a chrome plug in that will find alternate
| resellers for you while you're browsing steam.
| Dracophoenix wrote:
| > There's even a chrome plug in that will find alternate
| resellers for you while you're browsing steam.
|
| I'm guessing you mean Augmented Steam? Or do you have another
| one?
| AlexandrB wrote:
| I thought in Steam's case this only applied if you're selling
| Steam keys? I.e. you can't sell Steam keys for less from your
| website than they are on Steam itself. I've definitely seen
| games for cheaper on GoG, for example. Though that may just
| have been a case of loose enforcement.
|
| Edit: Hmmm. How did Humble Bundle operate? Many of the games in
| the older "pay what you want" bundles were distributed via a
| Steam key. Did Steam make an exception for them?
| thayne wrote:
| "someone else does the same thing" doesn't mean it is ok.
| LatteLazy wrote:
| How does being allowed to charge Amazon customers more than other
| customers help customers? More and more, I feel like state
| officials just want to sue amazon etc for publicity, and they
| either don't know or don't care what the law or market norms
| are...
| tehlike wrote:
| See my comment above.
| LatteLazy wrote:
| Thanks. Replied there!
| stetrain wrote:
| It means that if Amazon's cut, fees, etc. are higher than a
| competitor, the seller can't price accordingly.
|
| This prevents the market (consumers) from being able to make a
| decision that favors lower margins for the middleman.
| ThunderSizzle wrote:
| That's normal for MSRP though. If 50 websites sold a brand,
| and that brand had a MSRP, and one brand undercut that MSRP,
| the 49 other sites are going to send it to the brand and
| write of a cease & desist to that one site.
|
| Typically the brand does the enforcement, but competition
| does it just as much, since price shopping and competition
| can be brutal in eCommerce.
|
| It doesn't matter if one store has lower fees (e.g. doesn't
| accept Amex compared to another store) - they can't undercut
| MSRP.
| stetrain wrote:
| A brand telling a store what to sell for is the inverse of
| a store telling the brand what to do in other stores.
|
| Although both of those situations are a party using their
| market power to reduce price competition, so I'm not sure
| either is a good thing.
| axiolite wrote:
| > That's normal for MSRP though. If 50 websites sold a
| brand, and that brand had a MSRP, and one brand undercut
| that MSRP, the 49 other sites are going to send it to the
| brand and write of a cease & desist to that one site.
|
| No clue what you're talking about here... MSRP has NEVER
| been a REQUIRED price to sell at. MSRP is generally the
| MAXIMUM price an item is sold for, with a healthy profit
| margin baked-in. If 49 retailers are _colluding_ to keep
| prices at MSRP, they 're breaking the law and are bound to
| be caught and heavily fined for doing so.
|
| What manufacturers try to enforce is a MAP (minimum
| advertised price). However, the MAP is still NOT the lowest
| price one can sell a product for, only the lowest they can
| advertise the price at. When an e-Commerce website doesn't
| prominently list a price, but instead says "Add to cart to
| see our price" it's because they're selling it below MAP.
| That is still perfectly legal, there aren't 49 other
| retailers out there ready to punish them for doing so, and
| the manufacturer can't do a thing as long as they don't
| prominently advertise that lower price. The "street price"
| is _almost always_ below MSRP, and it 's not very unusual
| for it to be below MAP as well. Both MAP
| and MSRP represent pricing levels/suggestions by the
| manufacturers to the retailer; The retailer is not bound to
| use either price, and can go higher or lower than either;
| https://www.liveabout.com/map-vs-msrp-pricing-1564214
| ThunderSizzle wrote:
| Apologies on the MSPR <> MAP mixup, but the rest of I
| said is true in terms of MAP.
|
| Even "going to cart" to get price can be seen as improper
| avoidance of MAP by some brands. The only way to get
| around MAP, in that case, is via more hidden things, like
| a coupon code from an email.
|
| I've even seen brands require a specific shipping charge
| - and that it couldn't be combined with the item's MAP to
| show "free shipping", even through the cart.
|
| And yes, while "MAP" is not technically legally
| enforceable, a brand can also tell that store they won't
| let them sale any more...so it's still perfectly
| enforceable if the brand wants to continue with the 49
| other stores and drop that 1 store.
| stale2002 wrote:
| Enforcing an MSRP is bad for consumers.
|
| It disallows a store from passing on savings to a consumer.
|
| A store should be allowed to sell something for cheaper if
| it wants.
| em-bee wrote:
| enforcing a MSRP is usually illegal though. it's called
| "manufacturer's _suggested_ retail price " for a reason.
| bombcar wrote:
| The way it's enforced is by true distributor cutting that
| retailer off.
|
| Usually you can get around it with "see price in cart"
| trickery.
| axiolite wrote:
| No, you're confusing MSRP with MAP (minimum advertised
| price). MSRP is typically the MAXIMUM price you'll see an
| item sold for, while MAP is typically the MINIMUM.
| xivzgrev wrote:
| I hope the judge rightfully calls out the market power of Amazon
| is more monopoloy-like. They currently own almost 40% of all US
| ecommerce. The next largest is Walmart at ...6%.
|
| So while Amazon says you're free to sell your stuff elsewhere,
| the reality is you've have to be on a LOT of market places to
| equal Amazon's share, and that's just not feasible for your
| typical small biz.
|
| https://www.statista.com/statistics/274255/market-share-of-t....
| Karellen wrote:
| See also Cory Doctorow's take on the suit:
|
| https://pluralistic.net/2022/09/15/prime-suspect/
| belter wrote:
| "California files lawsuit against Amazon for blocking price
| competition" - https://english.elpais.com/economy-and-
| business/2022-09-15/c...
| wiremonger wrote:
| This is nuts. Amazon is simply choosing not to show the product.
| It's the seller who decides what to do about that. They can raise
| the price at the other retailer _or they can lower the price at
| Amazon_. Fees are similar across all of the marketplaces, so it
| 's not like sellers make lower margins on Amazon.
| GeneT45 wrote:
| I favor Amazon on this. No company has a "right" to sell on
| Amazon, so they're free to go and advertise elsewhere. If they
| want to use Amazon's enormous market presence a few concessions
| seem reasonable. Expecting Amazon to stock, advertise, and manage
| your product while you work to undersell them is **you** being
| unreasonable.
| judge2020 wrote:
| Eh it's pretty anticompetitive since you need Amazon to get any
| sales, while you won't be able to make money even if you go
| through lengths to specifically bid against a.co ads and pull a
| customer to your own website.
| legitster wrote:
| Is this actually true? I am looking up several different products
| and the off-Amazon prices are all lower. I do not shop on Amazon
| because of cost.
|
| > In a statement, an Amazon spokesperson said California had the
| situation "exactly backwards." Third-parties still have control
| over prices, Amazon claimed, and inclusion in the "Buy Box" space
| supposedly shows that a deal is truly competitive. It further
| contended that the suit would raise prices. You can read the full
| statement below.
|
| I know we should take official Amazon statements with a huge
| grain of salt, but after the Prop K fiasco, I am worried about
| people not actually bothering to research actual Amazon business
| practices before pushing something like this.
| daveloyall wrote:
| Here is one data point.
|
| I purchased a M.2 device from Amazon this morning. It has a
| warranty serviced by the seller, so I checked to see if the
| seller is likely to continue to exist during the timeframe of
| the warranty.
|
| I discovered the seller indeed has been selling memory products
| since 2017. While checking out their website (in the Wayback
| machine, too) I noticed that they have a shopping cart
| mechanism and indeed the same product is available there.
|
| I noted that Amazon lists the product as being shipped by the
| seller. I note that the seller actively answers questions on
| their product pages on Amazon. Sounds as if nothing would
| change for me if I buy from the seller's website vs. Amazon.
|
| I decided to cut out the middleman. I speculate that Amazon
| would otherwise take a percentage and I'd prefer to support the
| small business.
|
| Turns out the product is a few bucks more expensive on the
| seller's website.
|
| I can only speculate as to why that would be the case.
|
| I finish the transaction (on Amazon) and refresh HN. Here is
| this story. So, I for one believe the accusations leveled
| against Amazon.
| dominotw wrote:
| > I decided to cut out the middleman. I speculate that Amazon
| would otherwise take a percentage and I'd prefer to support
| the small business.
|
| Do you really want to give out your financial information on
| some shady overseas websites though?
| pas wrote:
| yes. it takes 2 seconds to create a new virtual bank card.
| also most things on a non-centralized marketplace are cheap
| compared to the premium of Amazon's total hegemony
| dominotw wrote:
| > it takes 2 seconds to create a new virtual bank card.
|
| how do you do this? My bank used to have this back in the
| day but they yanked it.
| ThatPlayer wrote:
| Yes. Credit cards have fraud protection.
|
| Plenty of stores also support Google Pay, or Apple Pay.
| PayPal or Amazon Pay. Or are clearly basic Shopify stores.
| What is the alternative, only using "big name" payments?
| That's how you get monopolies rent-seeking.
| throwabro112 wrote:
| Re: Prop K
|
| > The idea of taxing Amazon for guaranteed income was popular:
| the tax polled at 74% support, according to its supporters, and
| received more than twice the necessary amount of signatures.
|
| What I don't comprehend is how these actions by regulators,
| while obviously popular, actually help people get elected. I
| don't understand why unelected regulators would be doing low-
| information nonsense at all.
| legitster wrote:
| The story itself is kind of wild in Prop K's case:
| https://sfstandard.com/politics/san-francisco-housing-
| todco-...
|
| >"I never imagined that their cloud services or Prime video
| are more revenue than all the stuff I buy from them,"
| Elberling said. "I never imagined that to be true."
| thrownaway1239 wrote:
| About 8 years ago I was working with a retailer who had started
| selling on Amazon.
|
| I don't know if they still do this, but Amazon would detect if
| promotions for the products occurred on other sites. Amazon
| would instruct us to lower the prices to match or risk various
| penalties. I do not remember the exact penalties, but this
| article seems right.
|
| Amazon would also detect those prices _fast_. I always assumed
| they had their own web crawler that checked for it. I saw some
| retailers trying to obscure their non-Amazon promotions, to
| make them less detectable by the crawler. E.g. splitting
| "Discount" into individual <span>'s
|
| The page is skimpy on details but
| https://www.amazon.com/gp/help/customer/display.html?nodeId=...
|
| > _We constantly compare Amazon 's prices to our competitors'
| prices to make sure that our prices are as low or lower than
| all relevant competitors_
| NickC25 wrote:
| > _I don't know if they still do this, but Amazon would
| detect if promotions for the products occurred on other
| sites. Amazon would instruct us to lower the prices to match
| or risk various penalties. I do not remember the exact
| penalties, but this article seems right._
|
| Yeah, that happened with my buddy and I about 5 years ago. We
| initially had some hacky workarounds but quite quickly they
| had a human go through and make sure there was nothing that
| the computer didn't pick up on. Scary quick, too. Even when
| we figured we could eat shipping/warehousing fees (we had
| part of our own website's stock shipping out of my friend's
| house) the Amazon rep complained that it would allow
| consumers to find a lower price.
| tjsix wrote:
| Yes, it most definitely is true. The company I work for designs
| and sells somewhat niche products geared towards photographers
| which we sell via our own website, retail camera stores and on
| Amazon. Since we do not allow our retailers to sell on Amazon
| so we are the only official seller of our products on the
| marketplace.
|
| We ran a sale for Labor day where we discounted our products on
| our website, but did not discount them on Amazon. Within 36
| hours of the prices being reduced on our website we started to
| receive notifications from Amazon that our "offers" were
| ineligible due to not having the lowest price. Upon checking
| the listings, they had removed the buy box, essentially making
| it a multiple-click process for anyone to actually buy the
| products.
|
| This happens anytime we, or any of our retailers that have an
| ecommerce presence discount our products without discounting
| them on Amazon. It's ridiculous.
| ComputerGuru wrote:
| Did they restore your buy box after you rectified the
| situation?
| kyleee wrote:
| does amazon scrape your website to automate this type of
| enforcement action?
|
| just wondering if you could show their bot the higher price
___________________________________________________________________
(page generated 2022-09-16 23:01 UTC)