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0 pointsjsutton7y ago0 comments

For starters, Amazon provided a marketplace platform for third parties to sell goods. They then gathered data on which items sold the best, created their own line of products based off this data, and crushed their customers-turned-competitors using their massive advantage in economies of scale.

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travisoneill17y ago

You are allowed to crush your competitors with economy of scale provided that you don't do it by selling at a loss. That's actually the entire point of economy of scale. The reference in the article is to passing a law against this so clearly what Amazon did is legal now. Furthermore, we don't need a law for this as this type of thing is well handled by a non-compete clause, which I am surprised wasn't in the seller's agreements with Amazon.

bhl7y ago

The larger issue is that Amazon does not treat each product equally. When you search for an item, they don’t necessarily even show you the “best item” — most bought or highest reviews. Products which buy advertisements or Amazon’s own brands are bubbled up: its not an even playing field in this sense.

nck42227y ago

FWIW, while I agree this a problem, large box retailers (Whole Foods before the Amazon acquisition, Walmart, etc) are well known for doing this as well.

So if that's the line you draw, it extends further than just tech giants.

sct2027y ago

It's a little bit different though, because Amazon has 2 streams of how they get products: Amazon can buy branded from vendor and control price and selection, or those same vendors could list directly on Amazon (as FBA) and the vendor controls price and selection.

Pop sockets got in a fight recently with Amazon, because they wanted to stay FBA in order to have better control of selection and pricing, but Amazon was trying to force them into a more traditional vendor role.

jhall14687y ago

Right, and Walmart only allows products in its store under their terms which is far more restrictive, so I'm failing to understand how this model is worse for competition than Walmart's.

And what happened with PopSockets didn't quite work that way. They were already a vendor on Amazon, and they wanted to remove themselves as a direct vendor and designate a single reseller as their "approved" FBA on Amazon.

So they wanted to change the terms of the agreement, Amazon said no, and that was that.

giarc7y ago

Perhaps grocery stores have done well to keep their brands on lower shelves and not end cap their own stuff. Amazon brands will often appear first in the list of results, which would be akin to putting Great Value products front and centre on all Walmart shelves.

vonmoltke7y ago

CVS and Walgreens put their branded products right next to the name brands they are copying. They even color the packaging the same.

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adrr7y ago

If they were the largest retail seller, that would be anti-competitive. Amazon does less than half the revenue of Walmart. Amazon and Costco are the same size.

briffle7y ago

So I guess all those store brand groceries are anti-competitive behaviors?

ApolloFortyNine7y ago

Looking at the vast majority of Amazon Basics goods, I just don't see how they would have needed to use marketplace data to come up with what products to sell.

Batteries, clothes (lots of clothes), backpacks, these are all products that are cheap to produce and where brand loyalty plays a large role. People generally trust the name Amazon. It's not rocket science to realize people want cheap clothes and batteries.

basch7y ago

its a little more than just Basics, but youre right its a ton of clothing.

https://www.amazon.com/b?ie=UTF8&node=17602470011

https://www.recode.net/2018/4/7/17208804/amazon-private-labe...

nerfhammer7y ago

Literally every moderately big retailer does this.

Though many of them choose brand that are not as obviously connected with the house. Like half the stuff at Walmart is actually a house brand.

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