FTC sues Amazon for illegally maintaining monopoly power

https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power

by marcopolis • 3 years ago

1139 899 3 years ago

ftc.gov

smugma2• 3 years ago

Time to buy AMZN?

https://www.wsj.com/us-news/law/the-hedge-fund-that-made-a-k...

AlbertCory2• 3 years ago

My prediction (you can check my results):

AMZN price will be largely unchanged.

There does seem to be some antitrust exposure there:

========= Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.

Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.

WillPostForFood• 3 years ago

Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service

Isn't Prime a fulfillment service in this context? How would a seller be Prime eligible without using Amazon fulfillment?

gorbachev• 3 years ago

Nah. You buy stock in the law firm(s) representing Amazon on this. Assuming they're a publicly traded.

bpicolo• 3 years ago

Publicly traded law firms aren't currently a thing in the US, because non-lawyer ownership (or in this case, partial ownership) of law firms has been against legal ethics codes for a long time: https://www.reuters.com/legal/legalindustry/practice-innovat...

_uhtu• 3 years ago

I'm honestly not sure how you could make the case that they aren't maintaining and abusing monopoly power. I mean they literally blatantly copy the designs of other companies who sell on amazon, then put their own results for their own products higher in search results than what they copied off of. It's incredibly blatantly anti-competitive.

tehlike3• 3 years ago

At this point, they don't have to rank it higher and people would still buy it.

They are like Kirkland of Costco most often.

hightrix• 3 years ago

Exactly. I prefer Amazon Basics to YAYWOWND brand every day.

It is one of the few brands on Amazon you can count on to not be Chinese crap. Even if it is made in China, the Amazon Basics products are generally good quality.

crooked-v• 3 years ago

Kirkland has a big difference here, in that it's a much better consistent indicator of quality than the Amazon house brands.

nixass• 3 years ago

By what metric Amazon IS monopoly?

munk-a2• 3 years ago

By the metric of market control and by the metric of being able to leverage anti-competitive practices without feeling any market pushback.

neogodless• 3 years ago

https://www.statista.com/statistics/274255/market-share-of-t...

37.8% of online retail.

Walmart is #2 at 6.3%.

https://en.wikipedia.org/wiki/Monopoly

The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with a decrease in social surplus.
Product substitutability: Product substitution is the phenomenon where customers can choose one over another. This is the main way to distinguish a monopolistic competition market from a perfect competition market.

zht• 3 years ago

I've found that many people will spend a lot of time and energy defending large companies (and often their CEOs) against perceived bullying. Amazon, Tesla, Elon, Meta, etc etc. I don't really understand it.

vasilipupkin4• 3 years ago

and others spend a lot of time attacking large companies simply because they are large. In this case, AMZN. AMZN is like the cheapest place to buy things online. But it's not the only place. So, why is FTC going after them?

akira25012• 3 years ago

There's the old line about "temporarily embarrassed millionaires."

I feel like Hacker News types see themselves as "temporarily embarrassed monopolists."

robertlagrant3• 3 years ago

Some people will just defend anyone or anything regardless of tribalism. Just based on what they think is ethical and/or factual.

takinola• 3 years ago

Perhaps they have a different opinion than you do on the issue?

I don't have a POV on this particular case but it seems reasonable to assume that there are other (reasonable) people that have different values and judgements than you do. Just because these companies and CEOs have a lot of resources should not automatically kick in the "David v Goliath" instinct that most people have

browningstreet• 3 years ago

You're allowed to win.

You're not allowed to complain.

I think that's a very American thing right now... politically too.

But downstream, there are lots of issues that arise if one can't expect some kind of balance in check-n-balances.

Andrex• 3 years ago

The argument always boils down to "well it's allowed / that's just how you do things" and when the companies get told "No, that's actually not allowed and not how you should do things" the argument switches to "the FTC has been weaponized by The Other Side, even if they're doing pro-consumer things we shouldn't trust them because Big Govt."

Meanwhile, we have over 100 years over antitrust history and precedent pointing the other way. Sometimes Big Govt does need to step in and set the market right, because raw unfettered capitalism lacking regulation will always destroy itself. (For the record, and to preempt some strawmen, I don't think raw, unfettered socialism is The Way either.)

megaman8213• 3 years ago

Is this supposed to be an argument or something? Malign people with large companies, and then tell them their opinions don't matter.

Tribal thinking is the worst. You added nothing of value to the conversation.

_ea1k3• 3 years ago

I guess I do that to some degree. Amazon is doing some bad things, but I have a difficult time seeing that without also seeing the good impacts that they've had.

I remember online retail before Amazon dominance. Return policies and return shipping was a real mess. Amazon actually greatly improved the customer service experience. It also changed some markets in ways that were undoubtedly pro-consumer.

It also has had a lot of negative impacts, as their model (including the free shipping concept) has made it practically impossible for small independent stores to compete in online sales.

Put another way, very few things are all bad or all good. A lot of internet commentary wants to magically keep the good and vaporize the bad, but it just doesn't work that way.

HDThoreaun4• 3 years ago

Don't all grocery stores do this?

TonyTrapp• 3 years ago

Often store-branded articles are in fact produced in the same factory as the original brand products. It's not quite the same.

travoc2• 3 years ago

Grocery stores are not a monopoly.

cj2• 3 years ago

I think grocery stores are culpable for a lot of shady behavior.

The least of which is selling end cap space (most walking traffic) to the highest bidder, meaning a lot of junk food and impulsive-purchase products are put in the highest traffic places.

At least on Amazon it's marked as a sponsored result. Even if most people click the first result anyway.

Both Amazon and grocery stores can be in the wrong.

dragonwriter13• 3 years ago

Grocery stores generally don't have monopoly power to start with, and therefore cannot illegally maintain such power no matter what they do.

etchalon3• 3 years ago

Not really, or, at least, not at the same scale.

Staples (peanut butter, canned fruit, etc.) tend to have store brands, but grocery stores doesn't have a store brand version of the vast majority of popular products.

autoexec5• 3 years ago

Grocery stores sell generic foods, but they put them on the same shelf as the name brand stuff.

They don't hide the original products in a darkened corner of the back room where no customer can see them. They don't shove their generic into your hand every time you reach for a name brand. Amazon can hide the real products from search, or push it to the bottom of results, while putting their own products at the top of search results even when you search for the brand by name.

0xbadcafebee• 3 years ago

Monopoly is a subset of anticompetitive behavior, and not easy to prove. Whatever behavior you see as monopoly, they could have a "reasonable" explanation for. A company violates the law only if it tries to maintain or acquire a monpoly through unreasonable methods. As usual, the law has loopholes big enough to drive an entire logistics chain through.

robertlagrant3• 3 years ago

This is what supermarkets do as well - see what sells, then create own-brand alternatives.

Waterluvian• 3 years ago

But I like it when Costco does it…

whatever1• 3 years ago

It is not if you cannot prove that the price that the customer pays is now higher.

Apple for example copies apps and makes them available as default in iOS. Companies go bankrupt because of it, but it is not monopolistic.

Of course all these are because of the strict legal definitions we have. In spirit I agree with you.

cratermoon2• 3 years ago

It is not if you cannot prove that the price that the customer pays is now higher.

That's according to a peculiar interpretation of anti-trust law.

“Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition.”

Amazon’s Antitrust Paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...

likpok3• 3 years ago

The trouble with this argument (which gets made a lot) is that this is basically every large retailer. Walmart has great value, Safeway has safeway select, Target has good and gather. In all of these cases large retailers take well-performing products (i.e. look at their sales data to see what is selling well) and creates mimics.

They put the generics right next to the original products, and then charge the original seller for better shelf placement (as well as for various other things -- getting a product in a retail store requires a fair amount of payola in some form or another).

All of this adds up to basically the same thing: amazon copies a product and ranks it highly unless you pay for better placement.

You can say that this is bad, which sure, but it seems hard to make the argument that this is specifically illegal for amazon when it's widely practiced in the industry.

fragmede• 3 years ago

I don't know that it is. Walmarts been repeatedly sued for the same practice, so it's not just Amazon being sued for that behavior.

enriquec• 3 years ago

Very true. I find it hard to argue against something like generics - since they increase access and lower price.

EVa5I7bHFq9mnYK• 3 years ago

I think those great value products are not in fact produced by Walmart. It's the same product from the same company, just lower priced to appeal to price conscious customers.

losteric2• 3 years ago

The trouble with this argument (which gets made a lot) is that this is basically every large retailer.

Alternatively: there's no trouble at all, Walmart/Safeway/etc are all clearly engaging in this anti-competitive practice and must be reigned in. Marketplaces need to be regulated as neutral grounds for sellers, the marketplace cannot double-dip and compete against sellers or engage in practices that reduce competition between marketplace businesses.

Generics and knock-offs are fine, it just needs to be done by independent sellers.

Practices like down-ranking sellers for offering better prices elsewhere is just blatantly violating any sense of neutrality, reducing competition among marketplaces and increasing prices for customers.

nonameiguess• 3 years ago

Clearly, it isn't illegal to do this kind of thing in general. What's illegal is doing it when you have enough market power to be deemed a monopoly. No physical retailer is anywhere near that. Businesses are allowed to be anticompetitive. That's more or less the entire reason they exist. They're not allowed to create monopolies by being anticompetitive.

bmitc• 3 years ago

And at what point is a company too powerful that doesn't meet the traditional, and frankly outdated, view of a monopoly? Amazon owns and controls entertainment, news, journalism, books, movies, products, furniture, space/satellite services, backend services, storefronts, medical care, pharmacies, food, etc. They literally control, own, and/or provide every aspect of life. Are they the only ones in each of those areas? No. But they are one of the few, if not the only one, in all of those areas at once.

Technology, and in particular software, has greatly outpaced the definition of monopolistic power. Amazon and all the other large tech companies wield so much power it is scary. And they can literally just buy into any market they please with hardly any push back.

lacker• 3 years ago

According to the best statistics I can find, in the US, Amazon has 37.8 percent of the retail e-commerce market.

https://www.statista.com/statistics/274255/market-share-of-t...

The simplest pro-Amazon case is that they do not have monopoly power, because they are not a monopoly.

rat9988• 3 years ago

As a seller who wants to sell retail, what is the marketshare of available platforms?

AnthonyMouse2• 3 years ago

The simplest pro-Amazon case is that they do not have monopoly power, because they are not a monopoly.

It's also odd that their retail business doesn't make any money if they're supposed to have market power.

tristan9572• 3 years ago

You do not need > 50% market share for the government to go after you for monopolistic practices. If Amazon made that case in court, they would be laughed out of the building.

pseudosavant• 3 years ago

I get the sentiment behind this reaction that most people have. I just have a hard time understanding how it is any different than brick and mortar companies using their sales data to determine which products they should have a store brand version of. Costco, Walmart, Target, etc. all do this, and have been doing it for decades.

At a Costco, they'll often stop selling the brand name product if they introduce a "Kirkland Signature" version. Amazon doesn't take down competing products when they launch Amazon Basics versions.

Not really intending to defend Amazon, because they are indefensible, but by big corporate standards, I don't see how they are anywhere near as bad as Walmart. And nobody is trying to break Walmart up.

dragonwriter13• 3 years ago

I just have a hard time understanding how it is any different than brick and mortar companies using their sales data to determine which products they should have a store brand version of. Costco, Walmart, Target, etc. all do this, and have been doing it for decades.

The legal difference underlying the lawsuit between this behavior by Amazon and the behavior you raise by those stores is not the behavior, but its context.

Amazon, the complaint alleges, has durable monopolies in two relevant markets which the behavior leverages and reinforces, making it a means of illegally maintaining a monopoly.

The other stores do not have monopolies, so the behavior is not part of a system of illegally maintaining a monopoly.

This is very similar to the kind of discussion that happened at the time of the Microsoft antitrusts suit about bundling software: one of the ways Microsoft illegally leveraged their Windows monopoly – in this case to monopolize other markets rather than to maintain the Windows monopoly, but same kind of issue – was bundling IE with Windows. People made all kinds of “well, how is this different than maker A bundling software X with software Y”, and mostly it wasn’t, except that maker A didn’t have and thus wasn’t leveraging a monopoly in the market of software X, so them bundling software Y with it wasn’t an issue.

gamblor956• 3 years ago

At a Costco, they'll often stop selling the brand name product if they introduce a "Kirkland Signature" version.

This is false. The Kirkland Signature versions are just the white-label version of one of the brands that are sold in Costco. For example, the Kirkland batteries are white-labeled Duracells; the Duracells are frequently sold right next to the Kirkland ones. The KS coconut water is just white-labeled Vita Coco and is sold right next to the VC coconut water. The point of the white-label product is to segment the market: the higher price of the branded version will make it seem like a more premium product while cost-conscious customers will purchase the white-label brand. Either way, the manufacturer gets paid.

hinkley• 3 years ago

I ate a lot of popcorn during the Microsoft trials - plural - and the received wisdom from previous generations that was already being forgotten at the time is this bit of torch-passing, which I now impart to you.

Anti-trust cases usually only succeed once the court of public opinion has turned against the monopolist. If the public is still in favor or ambivalent, then you will not find the political will to successfully prosecute your case.

But once the company has abused their power enough to turn the public against them (arrogance in addition to greed), then the charges tend to stick.

My read is that there is no amount of lobbying that can be successful once the pitchforks have come out. But it could also be how many whistleblowers you can hunt up. Once your brother is giving you shit for working for the Evil Empire, it's a lot easier to get up the courage to be a witness.

dhimes• 3 years ago

IIRC Microsoft lost in Europe, not in the US.

rattlesnakedave• 3 years ago

As a consumer, this doesn't really hurt me. I get good products for cheap delivered in two days or less. I don't see how the FTC is helping me here.

max_• 3 years ago

Exactly, the purpose of capitalism is to serve the consumer not the competitors.

mikem170• 3 years ago

How do you know that you're not missing out on an even better deal?

If amazon had real competition maybe they would not have raised seller fees so much, and would not have prevented sellers from allowing lower prices in other places. So a cases can be made that they are using their market share to drive up prices, not lower them. Costing the consumer more.

There's other issues besides cost, for example counterfeits. If they had real competition then maybe they'd have to do something about all the counterfeit products they sell, which hurts both buyers and sellers.

Just a couple examples. There are other ways that monopolies can impact markets.

I've had similar thoughts about facebook. We could have had much better social/messaging systems, but facebook bought the competition. We likely missed out on more variety and perhaps much better options. Consumers were harmed by these lost opportunities.

tw04• 3 years ago

I get good products for cheap delivered in two days or less.

You would be getting the same products for cheaper, that's the point. Their "two days or less" hasn't been true for several years. "Prime" to me basically has become "sometime in the next week" and there's a massive warehouse within 30 miles of my house.

jrochkind1• 3 years ago

To "make the case that they" are or aren't violating antitrust law, you need to know and talk about antitrust law.

To not be sure how someone can make either case, without being familiar with antitrust law and framing the discussion in terms of it, is only to be expected.

I came to HN hoping to see some legal analysis, but I guess that's not what HN is for. You can get good technical discussion of technology, but when it comes to legal technical stuff it's just ideology and people talking about how they think things should be. What's HN for lawyers?

fallingknife• 3 years ago

Grocery stores do this all the time and undercut brand names. They even put up signs with "compare to <brand name>" by the generic. I'm really not sure how you could make the case that it isn't legal given that it is a long standing and accepted practice, and is clearly beneficial to the consumer.

graeme• 3 years ago

Monopoly is very specific. Anti competitive isn’t monopoly.

Amazon simply hasn’t got monopoly market share or even e commerce monopoly market share.

And btw all retailers copy products. Surely you’ve bought store brand corn flakes at some point for instance.

jldugger• 3 years ago

I'm honestly not sure how you could make the case that they aren't maintaining and abusing monopoly power

Well, the obvious way would be "Amazon is not a monopoly." It's blatantly anti-competitive but hasn't produced a competitor yet. And heck, they didn't even have to buy off the competition from Jet.com, Wal-Mart somehow inexplicably did that for them.

criddell6• 3 years ago

I wish they would add ebook DRM to the list. Amazon has essentially locked the Kindle so that it can only purchase from Amazon and Amazon ebooks can only be used on the Kindle. On top of that, they offer no way of transferring ebooks and, AFAIK, offer no way to remove DRM after a work enters the public domain.

taeric28• 3 years ago

I don't know, as I never had access to that data, but I would be shocked to find that is not demanded by their agreements with the publishers. Akin to why there is no library that will give you non-DRM items. Is almost certainly part of a strategy by the publishers to bolster other marketplaces they find more favorable.

542458• 3 years ago

Isn’t Amazon also the publisher for a nontrivial number of ebooks on Amazon?

thomastjeffery9• 3 years ago

An agreement is constructed by two parties, not one.

charcircuit3• 3 years ago

If you buy a PS5 game you can only play it on the PS5 and they don't remove DRM after the came goes into public domain.

j_maffe• 3 years ago

PS5 doesn't have a monopoly over the console market, Amazon does.

libraryatnight2• 3 years ago

You can't think of a few reasons this is not a great comparison? Like, base expectations to begin with would disqualify this analogy as useful.

protonbob• 3 years ago

Ps5 games are specifically programmed for that architecture and sometimes studios are paid for exclusivity. The written word is universal.

my1233• 3 years ago

(disclaimer: Amazon employee)

For that one, it's mandated by publishers. There's nothing that can be done for e-readers from vendors that don't support third-party applications.

Amazon e-books are accessible on Android and other platforms in addition to Kindle devices.

Kindle is also not locked to only ebooks from Amazon, but third-party DRM schemes are not supported. Calibre for example comes with good tooling for that use case.

criddell6• 3 years ago

For that one, it's mandated by publishers.

I believe the publishers want DRM. I'm not sure they want DRM that effectively locks in their readers to the Amazon ecosystem. I don't believe publishers would be upset if I could directly purchase books from Apple, Google, Kobo, or any other similar vendor directly on the Kindle.

Is the audiobook market different? I know Cory Doctorow for one would like to sell his audio books through Audible but they require DRM. Care to defend that?

Uvix• 3 years ago

The same was true for music once upon a time, but that didn't stop Apple from negotiating for DRM-free with the publishers.

callalex4• 3 years ago

Amazon could leverage their market power to benefit the consumer like Apple did when they eliminated music DRM.

thomastjeffery9• 3 years ago

That's because publishers practice anti-competitive behavior, too.

We need to quit getting lost in the word, "monopoly". No part of this problem is from a single actor dominating the entire market. The problems are anti-competitive behavior and vertical integration.

DRM is literally intended to support copyright monopoly. The entire purpose and function of DRM is to prevent competition in the form of "copyright infringement".

m4635• 3 years ago

What I can't figure out is that many books (such as Tor) have a notice:

  At the Publisher's request, this title is being sold without
  Digital Rights Management Software (DRM) applied.

Are these encrypted anyway on kindle?

circuit10• 3 years ago

You can at least copy files onto it if you already have non-DRMed ones

jpk2f2• 3 years ago

You can easily use ebooks from anywhere on the Kindle. However, agreed on the DRM. Blindsided me when I tried to open some comics I had purchased on my computer (to read them in color). Luckily others have already made tools to remove that DRM...

bigbillheck• 3 years ago

Does calibre not work on new kindles?

criddell6• 3 years ago

I assume you are talking about the DeDRM tools? If so, the answer to your question is that it doesn’t work as well as it used to. The era of easily strippable DRM is ending.

Amazon’s latest file format KFX hasn’t been entirely cracked and it’s possible it won’t ever be entirely cracked. The best anybody can do so far is to buy an older Kindle and download it to that in order to get a crackable version. The problem with that is you lose all of the typography improvements only available in KFX.

boyesm• 3 years ago

Adding a new book to a kindle is as simple as sending an email with a PDF attachment.

emodendroket4• 3 years ago

The Kindle has support for side loading books so I’m not sure how it’s locked to only reading Amazon purchases.

pcchristie• 3 years ago

Is this new? I specifically went for Kobo years ago because my research told me that Kindle didn't have that capability, and Kobo did. Perhaps I didn't look hard enough.

danielmarkbruce16• 3 years ago

"on the kindle".

They have a web based kindle app. They have apps for android, iphone, pc, mac and probably 10 other things I'm unaware of.

adra• 3 years ago

It sounded like their audiobook division was acting in anti-competitive ways to push authors into single platform exclusivity. I wonder what else they're up to.

charcircuit3• 3 years ago

Another case of Kahn trying to go after companies for being successful.

akira25012• 3 years ago

And the police are mad at cocaine dealers just for being successful.

charcircuit3• 3 years ago

Cocain dealing is illegal.

Justsignedup2• 3 years ago

remember that time that amazon was bleeding like 5 million a day just to make sure they can destroy diapers.com? by selling diapers at a loss, which was numbers that diapers.com couldn't compete with given that they didn't have another business to rely on, then forced diapers.com to sell to amazon because they had no other option?

And this came out last time they were doing monopolistic inquiries against amazon. Yet...

So I'd love to see something positive come out of it, but I have my doubts.

loldk• 3 years ago

That's what these discussions are for: to discover solutions and obstacles.

Have you ever heard of the monkeys and ladder metaphor?

Things need to change. It's great to be skeptical, but not if you're not also optimistic at the same time.

Monopolies are bad for many reasons, not just because arbitrary "rules" or whatever you think is easily dismissed, but because of the opportunity costs that even the owner of the profits incurs. We're not talking about money or status or power, but actual meaningful change of the total composition of their culture & society and the world. They are literally preventing themselves from experiencing a world that gives them everything they can't have now and clamor and hurt themselves chasing after. It's the ultimate irony.

So yes, you should have hope. There is NOT a "good" reason for being a greedy parasite. People have just forgotten and/or been manipulated into believing in fake power. This false faith (fear) is literally what enables these fake leaders like Jeff Bozos the clown to succeed.

Please next time contribute more to the conversation than just whine.

yomlica82• 3 years ago

Apparently product dumping isn't illegal if you do it on the internet. This wasn't even a fuzzy digital goods or services example either.

elzbardico2• 3 years ago

Product dumping is not illegal if you have a national newspaper that can be used to target any politician and if you make sure to contribute millions and make sure your employees do the same for the political party in power.

duped5• 3 years ago

The current FTC chair wrote the ~~book~~ essay on Amazon's monopolistic business practices (1) and has spoken so much about it that the only reason we'd see the government take their foot off the gas here is if Amazon's lawyers can claim that her previous advocacy biases the case against them.

(1) https://www.yalelawjournal.org/note/amazons-antitrust-parado...

Justsignedup2• 3 years ago

I can only but hope that she can do this, if anyone can I think she can.

nerdponx• 3 years ago

Apparently there are calls for her recusal on the grounds that she held a critical stance before her current appointment. Which is an odd thing to ask for in my opinion, but I guess it's worth trying if you're on the losing end of this.

CPLX• 3 years ago

Advocating for a position and then using the strength of your arguments to be placed in a position of public authority through a democratic process is anything but fundamentally legitimate in a way no business will ever be.

Amusing trying to see people claiming the opposite.

_2d302• 3 years ago

I’d encourage everyone to read at least the abstract of this link and then consider the case the FTC is trying to bring to see if they notice anything odd! HINT: there is something very odd about the two taken together.

deelowe• 3 years ago

What's to stop her from being replaced next election before this comes to fruition?

sah2ed• 3 years ago

https://www.yalelawjournal.org/note/amazons-antitrust-parado...

The article has been discussed around here before:

https://news.ycombinator.com/item?id=20079699 (2019)

https://news.ycombinator.com/item?id=13562968 (2017)

s3p• 3 years ago

There are 17 state AGs joining the FTC in the suit so I doubt Amazon will have any headway even if they got the Chair to be removed. Hoping the best for the lawsuit, though.

btmoore• 3 years ago

I do. I also remember when they were selling books at a loss, and the FTC went after Apple's book store instead

hrdwdmrbl9• 3 years ago

Do Shopify next! And Apple's 30% tax is literally outrageous!

hrdwdmrbl9• 3 years ago

Also do the fact that you never own what you "buy". Buy means buy. Period. Amazon, Audible, Google Play, Apple TV, etc. I would like to _own_!

rob743• 3 years ago

Then you are in the minority unfortunately. Just look at music - you can buy DRM-free music online without problems, but people still prefer to pay for Spotify...

softwaredoug• 3 years ago

How is Shopify a monopoly? There's all kinds of competitors for making online stores

hrdwdmrbl9• 3 years ago

They force sellers to use their payment processor. If you don't, they charge an extra 0.5% markup on top, which basically means that no 3rd party payment processor can be competitive on price.

I think you can also measure their power in the same way as Amazon - The % of fees that they capture as a percent of sales volume goes up every year. Slow squeeze.

kderbyma• 3 years ago

Hopefully it works. Amazon has done so much damage to this world....

fasthands92• 3 years ago

The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging
Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.

I feel like ultimately they are accused of violations because they are big. I don't think that's the worst thing. But as others have pointed out - their tactics are very similar to deals grocery stores and retailers make with suppliers all the time. The only difference seems to be that Amazon is big enough that suppliers can't legitimately threaten to take their business to another store - because there isn't one.

Their complaints that Amazon makes prices higher for products across the internet is clearly only true because they are so big.

autoexec5• 3 years ago

Maybe they are only so big because their anti-competitive behaviors have kept alternatives from taking their users. I'd love to be able to stop giving amazon as much money as I do, and I know a lot of people who feel this way.

fasthands92• 3 years ago

I don't disagree with that but nonetheless it seems like the behavior they are in trouble for (telling suppliers they can only sell on Amazon if they don't offer cheaper prices elsewhere) is something that tons of other retailers do.

I really don't mind their being a different set of rules if someone has the ability to dictate most of the market, but exclusive deals are routine for smaller players.

judge2020• 3 years ago

Alternatives in terms of sellers on Amazon.com, maybe, but people use amazon because of how good of a product Prime is (or at least, for the past few years, appears to be despite it being obvious product prices go up to offset subsidized shipping prices) and because it tends to have everything available is a fast and secure way. With e.g. a search engine showing you products, you might be sent off to one of 100k stores that all need your cc info and who don't already have your shipping address.

This is partially solved by Shopify for Shopify sites, and Apple Pay/Google Pay/PayPal for third parties, but it's still often more friction to go to a 3p store.

skilled4• 3 years ago

Maybe interesting to some, but during the recent Google updates (core and "helpful"), Amazon had more than $100M of search traffic value wiped out,

https://i.imgur.com/5HpZT6Z.jpg

Google absolutely launched a nuke at Amazon.

rob743• 3 years ago

Well that depends on how many people still use Google to search for products, and how many go directly to Amazon...

topicseed• 3 years ago

And nuked affiliate sites that promoted Amazon links primarily, wild.

jedberg2• 3 years ago

Where did that chart come from?

skilled4• 3 years ago

Ahrefs. It’s basically a backend UI for how Google rankings change over time for the entire web.

summerlight• 3 years ago

Is it a meaningful volume for Amazon at all? I thought the majority of US/EU customers begin their search from Amazon and just skip Google when it comes to shopping.

skilled4• 3 years ago

I would say yes, for first-time customers for sure it is significant.

eh_why_not2• 3 years ago

... during the recent Google updates (core and "helpful")...

What were those updates exactly?

skilled4• 3 years ago

https://status.search.google.com/incidents/nBtYtBeex4GYBbdDS...

https://status.search.google.com/incidents/53diuQvcEsgzqXTPB...

rob743• 3 years ago

Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service

I'm no fan of Amazon, but that kind of makes sense - if they use another fulfillment service, Amazon wouldn't be able to guarantee next-day delivery for their products?

MarCylinder• 3 years ago

Amazon does currently have a "seller fulfilled" Prime service. They disabled for awhile, and recently brought it back

Consumers pay for Prime, and with it the 2 day shipping on eligible items, and so they prefer buying items with Prime eligibility. I must disagree with the "costly" description, as cost incurred shipping with Amazon and drastically lower than shipping with other services.

Having worked with dozens of businesses on establishing their Amazon account, there are very few that can move the volume needed to achieve the economies of scale necessary to match the costs of using FBA services.

xyst• 3 years ago

Decouple Amazon Warehouse division from Amazon Web Services (AWS largely subsidizes losses incurred by warehouse division), then we will see change.

Right now FTC going after low hanging fruit. But we all know Amazon will challenge it in court, appeal, appeal, appeal, pay the reduced fine, slow roll any changes, and business will continue as usual.

Break up the tech giants and each individual unit cannot survive as-is.

SoftTalker• 3 years ago

Yep. I'd say Amazon should be split at least four ways: AWS, their delivery/fulfillment operation, the web shopping platform, and the "Amazon Basics" and other product brands.

Edit: just saw that ihaveajob posted the same idea in another reply.

dawnerd• 3 years ago

Just breaking off AWS would be enough to see change. I see people saying they should spin off their house brands but that wouldn’t fly when other big retailers also sell their own brands along side third parties.

xattt2• 3 years ago

Does AWS include the Prime streaming platform?

It sends a chill down my spine to see that one of the perks of being a Prime member is unlimited photo storage.

It’s sickening to realize there’s a bunch of Gullible Guses and Ginas that are holding off cancelling their Prime subscription because their pictures are held hostage by Amazon.

I bet dollars-to-donuts that half of those folks don’t know how to articulate the sentimental attachment to their Prime subscription either.

marcod2• 3 years ago

I bet the number of peeps actually using amazon for photo storage is negligible ;)

lots2learn2• 3 years ago

Funny because alot of sellers are complaining about high fba fees eating into their profits. If you remove the subsidy (assuming there is one which I doubt) those fees would rise to hurt sellers more.

jollofricepeas4• 3 years ago

FBA seller here.

A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range.

The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change.

Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead in the water most of us have had to commit 100% to FBA to be able to stay afloat.

With the increase in inflation and Amazon abusing its power to significantly raise its prices for FBA and force us to use its advertising services our revenues have been severely impacted.

This doesn’t include their unwillingness to meaningfully fight counterfeits

Or that they penalize you if you attempt to drive sales elsewhere with lower pricing on other sites

Bloomberg did a write up on this a few months back:

https://www.bloomberg.com/news/articles/2023-02-13/amazon-am...

catiopatio2• 3 years ago

post-iOS change

What is the iOS change you’re referring to?

likpok3• 3 years ago

ATT, where apple hobbled other ad networks running on iOS. It used to be that DTC companies could use the fine-grained targeting offered by FB and Google to reach consumers without needing to go through a major distributor. Since the targeting is much less effective it's more expensive (potentially uneconomically so) to reach people. As a result, sellers are forced back to Amazon.

babypuncher5• 3 years ago

what on earth did iOS change that impacts your amazon business?

beckingz• 3 years ago

Privacy. The iOS improvements to privacy with advertiser ID becoming opt-in instead of opt-out has been brutal on targeted advertising.

lvl1027• 3 years ago

Not to be rude but you made millions on the backs of Amazon. Now you’re complaining that you have competition.

sudobash1• 3 years ago

on the backs of Amazon.

They were using the Amazon platform for what it was intended for, and Amazon made more millions off of them. It was supposed to be a mutually beneficial relationship.

dvngnt_• 3 years ago

a competitor that owns and governs the platform you have to use is different from another 3rd party that you have to compete with

steveBK1236• 3 years ago

Do you tip your landlord?

reagan832• 3 years ago

Great insight overall - can you describe more on the FB/IG/TT to Shopify connection not working or now dead?

lokar• 3 years ago

Apple mostly prevents narrow targeting on iOS now

reagan832• 3 years ago

Context on my question: I run one of the that works on this connector at IG - email me rbw at fb.com I’d be happy to connect and filter this feedback.

pcurve2• 3 years ago

wow... that BB article makes me sad.

https://archive.ph/yw3Bv

In 2016, they collected 35.2%. In 2022, they collected 51.8% in fee.

That's insane.

s0rce• 3 years ago

Depending on what services they provide that might not be terrible, its basically high end art gallery margins, but for consumer products with low margins that seems unsustainable. I'm curious how much AliExpress takes.

steveBK1236• 3 years ago

Yup, it makes me wonder what % of consumer goods for sale via FBA are from retail theft rings. 52% fees on stuff that cost you $0 ain't bad. Otherwise, it's very very bad.

WalterBright5• 3 years ago

they collected 51.8% in fee. That's insane.

Back in the 80's, my company sold compilers through third party mail order houses. They all demanded providing the product to them at 50% of their selling price.

It's what having somebody else advertise, collect orders, process payments, ship, and deal with returns is always going to cost you.

If it's unacceptable to your business, sell directly. My company did both.

PaulDavisThe1st• 3 years ago

This is not a defense of Amazon.

A neighbor of mine who makes high end silver jewelry was doing fine with the gallery he used (in Santa Fe). The gallery collected about 30% of his sales price in fees.

Another gallery approached him, asked to represent him instead. They took 50% in fees. He switched anyway.

His income went up (and stayed up). Presumably the new gallery provides some combination of better environs, more and/or different customers, better salespeople.

It still seems wrong that fees could be this high, for a jewelry gallery or for amzn. But it shouldn't be assumed that the high fees necessarily mean reduced income for the original seller.

bluesign2• 3 years ago

In other words, a lot of clueless people entered drop shipping. With huge competition, sale prices declined, constant costs took more percentage.

seatac76• 3 years ago

Thanks for sharing your experience. Do you think Amazon dropped the planned fee they were going to charge for those sellers who don’t use prime, in anticipation of this suit? Would that have impacted you?

steveBK1236• 3 years ago

I ran a small FBA business for a year nowhere near any scale and it was an interesting lesson. People who weigh in on these tech topics should actually try these things out to understand them better.

It's nothing like listing on eBay where there's some haircut off the top and that's that.

There are fees for - accepting inventory, holding inventory, returning unsold inventory, shipping sales, processing returns, destroying returns, transaction fees, ads to promote your listings in market, and probably 5 other things I forget. Depending on the fee it is - fixed, % of $, weight based, volume based, or some combination.

The fees change constantly with not much notice. So every time you think you've got just the right size/weight/price balance you get screwed. And where else are you going to go?

Like Uber drivers, I imagine some % of FBA sellers don't know they are losing money in real time. You need to do some decent accounting to track as all these different fees hit at different times. It's not like Amazon gives you the data & tools to track your all-in costs per sale.

shiftpgdn• 3 years ago

AWS works this way too but I’ll get dogpiled by Amazon sycophants and other people who have built their careers around getting witless companies sucked into the Amazon machine.

WalterBright5• 3 years ago

Ebay doesn't do fulfillment, which is why they take a smaller cut.

BeetleB4• 3 years ago

Disclaimer: Former FBA seller here.

So every time you think you've got just the right size/weight/price balance you get screwed. And where else are you going to go?

You've skirted around the obvious question: Why did you pick FBA to begin with? Amazon sellers existed long before FBA. They did their own shipping, so almost none of those fees apply. Many sellers continue to do well on the Amazon platform while not being part of FBA.

If you can't succeed without participating in FBA, then all that's happened is Amazon created an environment for previously unviable businesses to succeed, and has merely tightened it.

Edit: Amusing that this comment is being downvoted, whereas my other comment saying pretty much the same thing is being upvoted.

anjel• 3 years ago

Those fullfillment fees are nothing new. I worked for a publisher thirty years ago and they had a similar network of fees. The only difference was they were predictable in that the fee schedule changed only at time of contract renewal.

Whats different is that the fulfillment centers then couldn't see our books and weren't looking over our shoulder seeing our accounting figures, so as to grab the profits the moment it crossed the threshold of feasiblility.

Uber was easy and profitable in the beginning and clearly a superior value to car services and cabs. Many drivers took on debt to buy bigger better cars, never imagining the goalposts were adjustable by design so as to centralize all the profits.

root_axis3• 3 years ago

There are fees for - accepting inventory, holding inventory, returning unsold inventory, shipping sales, processing returns, destroying returns, transaction fees, ads to promote your listings in market, and probably 5 other things I forget.

Have you ever run a business where you have to manage your own inventory? What you listed and likely the 5 things you omitted constitute real work. Perhaps amazon's fees are capricious but they're doing all the work for you. You can manage your own inventory and shipping logistics and still sell on Amazon

karaterobot• 3 years ago

I had to look this up, so for other ignoramuses like me:

FBA is Fulfillment by Amazon, where you sell things on Amazon and they handle payments and shipping to customers.

m4635• 3 years ago

I think this is basically becoming a de-facto monopsony for some folks:

https://en.wikipedia.org/wiki/Monopsony

blibble2• 3 years ago

it's a genius business for a "retailer"

normally they'd need to pay for storage, stock, liquidation of stock they didn't sell, returns etc

and instead now you pay for all of that for them

and what do you get in return?

   - a listing on page 17 of their ever increasingly shitty website behind legions of MINFARTO, PATRONICS and GIBRANKER aliexpress garbage
   - customer service staff with an inability to understand simple english or basic problems
   - your genuine stock mixed with counterfeits, that then they penalise you for
   - paying to give your sales information to them as a potential competitor, as if you do well they'll ripoff your product

and they take essentially absolutely no risk whatsoever

not a good deal at all

barryrandall• 3 years ago

And the vast majority of the products are just rebrands from Alibaba. As a matter of fact, there's an entire economy centered around finding products on Alibaba to resell on Amazon.

wahern• 3 years ago

Not to be confused (as I was) with FOB, free on board, a term in commercial sales law, especially wrt international shipping: https://en.wikipedia.org/wiki/FOB_(shipping) I wouldn't be surprised if the similarity in acronyms isn't coincidental as in the abstract there's some conceptual, if not legal, overlap, and Amazon may have been aiming for something that read like authoritative legalese--the legal department must "always be selling" no less than the sales department. But neither would I be surprised if it was coincidental.

hrdwdmrbl9• 3 years ago

Our second option used to be the Facebook/Instagram/TikTok to Shopify connection but with that being dead in the water most of us have had to commit 100% to FBA to be able to stay afloat.

Can you explain this further?

HWR_142• 3 years ago

Meta/TikTok do less spying on customers, so it is harder to target ads to customers on iOS. This is the desired behavior. It means people who want to use targeted ads (called "the FB/IG/TikTok to Shopify connection" by the GP) are not able to.

YeBanKo2• 3 years ago

I heard some stores switched to Shopify, would be interesting to learn why it is not an option for stores like yours.

arbuge4• 3 years ago

Shopify and Amazon are quite different things.

Amazon is a marketplace and provides exposure - in other words, they bring you traffic besides providing ecommerce functionality. Possibly a lot of traffic if there's not much competition already in your space.

With Shopify you have primarily an online store solution. It's up to you to do your own marketing somewhere to drive traffic. Shopify does have what they call "Shop" now, which works like a marketplace, but in my experience that's still a relatively small channel for Shopify sellers.

adrr• 3 years ago

Shopify requires you to build out performance marketing strategy and with the IOS changes, targeting has lost efficiency. It’s more expensive to acquire customers.

pmarreck3• 3 years ago

How much would a "Fulfillment By <Company Other Than Amazon>" be worth to you?

Could you get together with a large bunch of other FBA folks and somehow fund an alternative?

shopifyeocks2• 3 years ago

What’s do you mean exactly about the Shopify tiktok Facebook connection being dead?

adamsb6• 3 years ago

Probably that Apple's privacy changes made those advertising channels far less effective.

nwiswell6• 3 years ago

I can't help but think that Amazon should be replaced with a non-profit or regulated public utility that provides a single unified online marketplace, part of internet infrastructure like ICANN. Sellers would select among competing fulfillment services (warehouse+shipping). Platform referral fees would go toward customer remediation, anti-counterfeiting, and review integrity.

I don't merely say this as a "fuck Amazon" reflex or a "fuck capitalism" reflex. I say it because it obviously would allow so much of the dying segment of mom and pop small business to become viable again. Just from a policy perspective it's a home run because it's a way to juice GDP, improve consumer purchasing power, AND reduce income inequality.

As a matter of fact I would suggest that Amazon as it exists is anti-capitalist. It is feudal. Capitalism is the deployment of capital and assumption of risk in pursuit of new value creating activity. Amazon is not marshalling new capital to innovate or improve its digital marketplace. Rather, Amazon simply owns digital real estate and extracts rent, like some kind of futuristic dystopian corpo-baron.

The best part of all this is that Amazon doesn't have to be forcibly nationalized or broken up or anything like that. The government just needs to support and endorse a good alternative, because Amazon seriously sucks.

blibble2• 3 years ago

I can't help but think that Amazon should be replaced with a non-profit or regulated public utility that provides a single unified online marketplace, part of internet infrastructure like ICANN.

if the market was working correctly Amazon's profits would be driven down to zero and you'd effectively have this

As a matter of fact I would suggest that Amazon as it exists is anti-capitalist. It is feudal.

absolutely

wustangdan• 3 years ago

Don't you think if we turned USPS into this it would be a another billions of dollars a year waste for taxpayers? Do we really need to be subsidizing drop shippers?

Amazon is not marshalling new capital to innovate or improve its digital marketplace. Rather, Amazon simply owns digital real estate and extracts rent, like some kind of futuristic dystopian corpo-baron.

What on earth are you on about? They own a url.

mrraj• 3 years ago

From the Bloomberg article :

"Chuck Gregorich, who sells fire pits and outdoor furniture, says turning a profit on Amazon is getting harder. One of his popular fire pits costs $200, of which Amazon takes $112 for its commission, warehouse storage, delivery and advertising. That leaves him with $88 to pay the manufacturer, ship the product in from China and cover his overhead."

I have a hard time sympathizing here. They farm out manufacturing to China and logistics/warehousing to Amazon, and then also lend brand to a marketplace they don't own. Assuming this is how FBA selling works on Amazon, it sounds like the low profits they make are just a byproduct of them not actually doing much work.

thomastjeffery9• 3 years ago

Considering they have to pay 56% of their revenue to Amazon, how do you expect them to be able to afford locally manufactured products?

meesles• 3 years ago

You make a good point, but I think the parent point is true as well. You still have people actually producing work, unable to compete on these platforms where Amazon will literally make a copy of their product at a lower price.

This is the result of commoditizing 'starting a business' to the point of near-worthlessness in the bottom 50%+. Like you say, I don't value the businesses that simply re-sell re-labeled products without ever interacting with anything very much. But let's not confuse the 'spam' of the problem with the squashing of actual business that this is historically known to cause.

notyourwork2• 3 years ago

Ding ding ding. Middlemen get squeezed and are mad about it would be equally fair headline here.

mlsu• 3 years ago

I know that there's the "5x rule" -- BOM cost is supposed to be 5x less than retail.

Is there such a rule for fulfillment and delivery?

Of course, 56% seems monstrously high to me, but then again, so did 5x BOM cost before I had that explained.

afavour8• 3 years ago

There’s maybe a chicken/egg scenario here. Perhaps, knowing the cut they would have to give to Amazon, they had no option but to manufacture in China?

BeetleB4• 3 years ago

Yes - some of the complaints seem legitimate (e.g. burying search results really far low - that hurts me as a buyer, and hurts the seller).

But complaining that you need to use Amazon's warehouses to be part of Prime? That's rather obvious! You can always sell as non-Prime. Many do and are successful at it!

Basically, Amazon allowed many businesses to exist by creating a very convenient way to sell. Chances are a lot of businesses selling on Prime who are complaining would not have been able to exist at all.

(Source: I'm a former FBA seller).

libraryatnight2• 3 years ago

I agree but I also don't want to punish legit businesses that are also impacted just because this guy sounds like a pointless middleman and I don't feel bad for him specifically. Seems like a real problem and he's just a bad spokesperson

mahastore2• 3 years ago

https://www.aboutamazon.com/news/company-news/amazon-ftc-ant...

KorematsuFredt• 3 years ago

Yup. Everything thinks the other person is greedy while they themselves are made of pure virtue.

billjings• 3 years ago

You have a hard time sympathizing?

Say what you will about their means of getting it, but this person did 100% of the leg work of getting that sale. That sale doesn't exists without them.

And Amazon gets the MAJORITY of the revenue cut for that?

I sympathize with the idea that China should get more of that, but make no mistake: Amazon's logistics and warehousing were not an option here. They were the cost of doing business. And Amazon took more for that service than this person who actually made that market happen.

seanmcdirmid3• 3 years ago

They farm out manufacturing to China, but if they designed the products, this isn’t very different from having Foxconn assemble iPhones. But of course, now the Chinese manufacturer could sell their design directly and undercut them, since they aren’t Apple.

If they are using a design from the manufacturer, I have no sympathy for them. They are just trying to make money by adding some marketing and connecting dots together.

lobochrome• 3 years ago

Agreed. It’s a net positive for society if the entire CSFC (Cheap Shit From China) economy is slowly collapsing.

user_named2• 3 years ago

The issue is that Amazon is taking over more and more parts of the process from manufacturing to delivery to the end user.

What you don't seem to understand is that they "let" Amazon handle warehousing and logistics because Amazon has in many ways forced this.

cramjabsyn• 3 years ago

This is a tangent but the consumerism that leads to people spending $200 instead of digging a hole in the ground for a fire pit is part of the issue.

hackerlight2• 3 years ago

They farm out manufacturing to China and logistics/warehousing to Amazon

You miss the key distinction. The former part of that equation is competitive, the latter part isn't. A guy who sells firepits can't be expected to create a competitor to Amazon. Amazon has complete monopolistic pricing power. Whenever a company is in that position, they will abuse it.

sambazi• 3 years ago

fwiw retail taking >50% of the final price is the norm

resuresu• 3 years ago

Human labor has little value in the age of chatgpt and onlyfans. Did you know there are teenage girls selling bottles of their dirty bathwater for more money than the average blue collar worker makes in a month. As time goes on, its starting to look like this whole free market thing isnt such a good idea anymore.

SkyPuncher2• 3 years ago

I'm not supporting Amazon here, but I'd love to know what Chuck thinks his costs would be when he brings this all in house?

It seems like he's expecting some sort of crazy margins selling a commodity.

yosho• 3 years ago

I'm a $5m+ Amazon seller here, so many wrong assumptions in the comments, hard to know where to begin...

- Firstly, not every Amazon seller is a drop shipper, or private label products. In fact most of the successful ones I know all design and brand their own unique products. We ourselves design everything in-house and own multiple design and utility patents on ALL of our products, you won't find these products on Alibaba. Yes, we manufacture in China, but it is really cost prohibitive and uncompetitive to do so almost anywhere else.

- Yes, Amazon's policies hurt us and is completely unethical. The biggest one being losing the "buy box" (ability for customer to buy from your brand) when a lower priced product from your brand is found on a competing website such as Target, Walmart, Shopify, etc. They essentially force you to have the best price possible on Amazon at all times or get severely punished. Why this is terrible... let me explain, let's say Walmart stores offer your product as a holiday sale item in their stores, or let's say a particular color variation of your product isn't doing well so they offer it as a clearance item. Now someone can buy that product at a discount, sell it back on a Target or Walmart online marketplace at a slightly lower price and guess what, your Amazon listing is now practically worthless. You lose the "buy box" and all your sales because another site has it listed for cheaper. This happens ALL THE TIME. And sometimes, there's almost nothing you can do about it.

- They practically force you to use Prime fulfillment. Technically you don't HAVE to use it, all you have to do is again, be uncompetitive with products that do offer Prime and lose half your sales. Same with Marketing, PPC, adwords, etc. They've created an ecosystem where all of these options aren't really options because there's no way to compete otherwise.

- Amazon basics and Amazon using private sales data to find out which products sell the best and compete with those brands directly. It's just really evil. They have all the info, all the data, and they know exactly which products to target to offer a cheaper version at a discounted price and steal all the sales...

I'll be the first to say that I owe Amazon a lot for allowing small businesses the opportunity to be making millions. But at the same time, some of the criticisms are valid, and with a few changes, the platform could be truly great for small business owners.

stolsvik• 3 years ago

As far as I know, the device I’m writing this on is also made in China. And I don’t even have to specify the brand.

mvdtnz• 3 years ago

How much do you personally shop at Amazon versus other outlets?

22289d11• 3 years ago

Once I figured eBay out, it's about 90% eBay, 5% Amazon, 5% other.

Amazon does a great job of making it appear that they are the best option to shop at. But they really aren't. Even with Prime Free Shipping, if you search eBay correctly - the prices are likely better there.

I know what some are probably thinking, eBay is full of scammers and knockoffs etc. That's not really accurate. Especially when you figure out how to use it correctly.

eBay policies are designed to protect the buyer. If the item doesn't arrive, you're getting a refund. Every. Single. Time. If you're unhappy with the item: tell the seller. Most will make it right for fear of negative feedback, and knowing they'll lose the INAD. INAD? If the seller wont fix it, file an Item Not As Described claim. You will win and they'll be forced to either refund you or accept a return.

mahastore2• 3 years ago

Go sell in Temu or Walmart. No one is stopping you.

patrick451• 3 years ago

I'm missing some context to understand all of this.

What was the "post-iOS change" and why did this make it difficult to go elsewhere?

Why is Facebook/Instagram/TikTok alternative dead in the water?

mighmi• 3 years ago

Apple privacy changes reduced advertising effectiveness

cm20122• 3 years ago

You can thank Apple's IOS 14.5 updates for making Facebook/IG/TT ads much less effective than they used to be for SMBs.

jiveturkey2• 3 years ago

lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range.
The impact of Amazon’s monopoly power is felt big time by us as we’re being squeezed with no place left to go online especially post-iOS change.

you either wouldn’t have a business at all without FBA, or you’d have higher margins with the same net earnings.

if you don’t like FBA try advertising on facebook. it’s very expensive because it’s very effective. the cost of the ad is so great that socks have to cost $20 and t shirts made in china have to cost $30.

i used to buy from marketplace on amazon. but dealing direct with sellers is worse than the ebay gamble. so i only buy FBA. i prefer direct sale from amazon if possible. the price is always higher but i have guaranteed no hassle.

otherwise i shop local.

i don’t know about dirty tricks but from my POV amazon earned their market by having consistent and reliable customer service. if you want to increase your sales it’s worth it to ride on _their_ brand. $250k to $5m for a mom and pop drop shipper sounds absolutely fantastic to me.

iancmceachern• 3 years ago

A lot of mom and pop businesses (~$20 million) have been built on Amazon over the past 10 years. Most of us are in the $250k to $5 million dollar range.

It's interesting, Amazon also put a lot of mom and pop businesses out of business during this time period as well. The overhead that used to go to local commercial property owners, independent trucking and warehousing companies and such now all goes to Amazon. It's a total monopoly in the old school robber barron sense. Not only do they own the railroad they also own the steel plant and the coal mine.

Break 'em up like Bell I say!

jollofricepeas4• 3 years ago

Selling anything in America is incredibly difficult even when you make design and or manufacture your own products.

Amazon controls the connection to the customer.

Walmart/Family Dollar control pricing.

Stamps.com controls independent shipping/stamps.

Stripe and the major card companies take a chunk of fees for credit card transactions.

moneywoes• 3 years ago

what is the biggest barrier to moving to the second option, customers?

tacker2000• 3 years ago

Amazon has around 60-80% market share in ecommerce, depending on where in the world you are.

rmbyrro• 3 years ago

Why was the Apple privacy change so severe to making "the Facebook/Instagram/TikTok to Shopify connection ... dead in the water"?

I understand a bit about digital marketing, but not why this was so bad...

PeterStuer• 3 years ago

FBA SKU pooling has completely killed Amazon for me. I used to purchase on Amazon regularly but I just can't trust them shipping me a genuine product anymore. I've gone back to select local eShops, even if the quoted Amazon price is often cheaper.

manicennui2• 3 years ago

By "mom and pop businesses" do you mean people selling cheap crap from China that is the same as the crap sold by a dozen other "mom and pop businesses"? Hard to feel sorry for businesses that are contributing to the rapid decline in the quality of all product categories.

r00fus• 3 years ago

Loving this action by FTC. Amazon is the worst kind of predatory market provider - they are literally aliexpress + "steal good ideas from real companies" kind of grift.

atlasunshrugged5• 3 years ago

Merits of this specific case aside, I find it really interesting that the FTC is going after Amazon now. They have pretty limited resources (especially relative to a massive tech co which can pour money into litigation) and have to pick and choose their battles carefully... I have to admit I'm a little frustrated that they're choosing to go after Amazon, which yes, imo the case definitely has merits and they do shady stuff like with dark patterns for trying to cancel accounts and the like, but there are so many other things more important to my life that seem broken that I wish the FTC would prioritize. How about more of a focus on insurers who refuse claims, drug companies flouting the law, PE firms jacking up the cost of housing or contractors gouging the government (and therefore all of us)?

bogwog• 3 years ago

The FTC is bringing a lot of cases, not just the few big ones like this that make headlines. The DOJ also brings antitrust cases.

See:

* FTC: https://www.ftc.gov/legal-library/browse/cases-proceedings

* DOJ: https://www.justice.gov/atr/antitrust-case-filings

atlasunshrugged5• 3 years ago

I know, and I applaud the one they recently filed against Anesthesia Partners which is directly at the intersection of PE and healthcare, but they do have limited resources and have to make tough choices about cases they bring and ones they don't, and I wish they would focus on ones that are more impactful for my life (e.g., healthcare, education, housing) than marginal ones like Amazon or the one against Meta acquiring a VR company. I understand their rationale and am generally supportive, I just disagree with the prioritization.

janmo• 3 years ago

There are many insurers, so this would mean many cases.

There is only one Amazon and I am sure the FTC is receiving a ton of complaints against them.

atlasunshrugged5• 3 years ago

I'm not sure I track. Sure there's only one Amazon, but there are a few major e-commerce providers (Shopify has been mentioned often, but also Walmart and other major) and more traditional retailers that compete with them.

dragonwriter13• 3 years ago

How about more of a focus on insurers who refuse claims, drug companies flouting the law, PE firms jacking up the cost of housing or contractors gouging the government (and therefore all of us)?

Those aren't FTC issues regardless of merits, so they don't factor into FTC priorities. The first is mostly state insurance regulators, the second doesn't seem to be a violation of existing law (though it might be a legislative issue, mostly at the state or local level like most land use issues), the third is for the inspector-general or similar authority of the agency employing the contractor.

atlasunshrugged5• 3 years ago

I'm not sure I agree but IANAL. Doesn't the fact that the FTC recently filed a case against a PE firm buying up anesthesia clinics and using that to jack up prices run counter to the example of the cost of housing? Or for contractors gouging the gov, my understanding is that PE firms have rolled up small defense contractors and then used monopoly power to gouge the government. That seems pretty firmly in their jurisdiction.

https://www.ftc.gov/legal-library/browse/cases-proceedings/2...

hrdwdmrbl9• 3 years ago

PE firms jacking up the cost of housing

They're just profiting off of a supply shortage. Fix the shortage and they won't be able to make money.

TheCaptain4815• 3 years ago

This seems extremely weak, even by recent FTC standards. Just in the past 2 years we've had the following e-commerce changes:

- Shopify small store explosion

- Google search adding products DIRECTLY to the search engine results

- LLM vs Search Engine battle. Whoever controls the LLM controls the product listing.

- Temu & Shein exploding onto the scene. WSJ just had an article on this yesterday.

My real annoyance with the FTC is why they refuse to go after REAL monopolies that actually hurt consumers, such as Apple and their closed App Store.

Spivak2• 3 years ago

after REAL monopolies that actually hurt consumers, such as Apple and their closed App Store

I find this a funny comparison because Amazon and Apple are so similar in the business practices people complain about. Are you sure you're not just on the supplier side of Apple and the consumer side of Amazon?

wordsarelies3• 3 years ago

The measure of these services shouldn't be if you can sell a new product and make money.

It should be that you can sell a cheaper, better version of an Amazon basics product and overtake it.

If there is literally no way to do that... Amazon is clearly a market manipulator.

spandextwins• 3 years ago

Where does the fine go? Seems to be a great recipe.

jdminhbg2• 3 years ago

Nowhere, once the FTC loses (again).

ihaveajob2• 3 years ago

In my opinion, Amazon needs to be split into at least 4 independent entities:

  - Online marketplace
  - Consumer products
  - Internet infrastructure
  - Delivery logistics

Similar to the three-tier distribution system for beer in most states (a brewer cannot be a wholesaler or a retailer). This makes it easier for smaller players can compete with the big ones on quality at least, if not price or recognition.

(Edit: format)

cthalupa• 3 years ago

The three-tier system is absolutely awful in a lot of states for smaller breweries. It has been used to severely reduce their ability to sell on-site for off-site consumption, which is key for smaller breweries. Many states set the revenue/volume cap too low before you have to cut off on-site sales of off-site consumption for you to not take a significant hit to your profit swapping to a distributor.

It also makes it very easy for the bigger groups like AB Inbev to play games with distributors around pushing enough volume of their products if they want to get allocations of more in-demand bottles like Goose Island's Bourbon County Brand Stout.

I did not think I would ever see someone seriously arguing that the three-tier system for beer is a good thing for smaller players.

kmeisthax6• 3 years ago

The thing with the three-tier system is that it only partially disaggregates the system. Market consolidation has a certain gravity to it: once one market is consolidated, they start stripping the margins off their suppliers and increasing prices for their customers. The only defense against this is to consolidate yourself to maximize your negotiating leverage. If wholesalers and retailers were horizontally disintegrated then it'd be a better system.

This is also why businesses are furiously and unanimously anti-union. Labor is their biggest cost and they get ahead if they can keep labor fragmented while they consolidate.

ZeWaka• 3 years ago

a brewer cannot be a wholesaler or a retailer

Reminds me of the weird law in a lot of states where breweries and distilleries can't use the same equipment or physical location - which pushes out smaller more varied players since you need capital in order to operate multiple locations.

ggreer2• 3 years ago

I'm pretty sure the beer laws hurt small breweries and consumers. Back in the 1980s when these laws were at their most numerous and strictest, the market was dominated by a few macrobreweries. Even today, the states that restrict brewery self-distribution have half as many breweries per capita as states that allow it.

arbuge4• 3 years ago

I would add a fifth - advertising.

thfuran• 3 years ago

(a brewer cannot be a wholesaler or a retailer)

Does that mean brewpubs can't exist or just that they couldn't also sell the beer bottled?

But regarding Amazon, I agree.

ihaveajob2• 3 years ago

I understand the point is you can do two, but not three of them functions.

m4635• 3 years ago

- advertising

CaffeinatedDev2• 3 years ago

Amazon has been cognizant of this[antitrust risk] for a while now I believe. The internal systems are all set up to run independently, most systems are modular and already run as separate entities with permissioned access.

Proof: worked as an SDE for AWS and Amazon for 7 yrs.

ggreer2• 3 years ago

Isn't that done because independent modular systems make it a lot easier to build stuff inside of such a large company? Bezos said as much in 2002 when he issued his API mandate.[1][2]

1. https://chrislaing.net/blog/the-memo/

2. https://gist.github.com/chitchcock/1281611

duped5• 3 years ago

Similar to the three-tier distribution system for beer in most states (a brewer cannot be a wholesaler or a retailer). This makes it easier for smaller players can compete with the big ones on quality at least, if not price or recognition.

This seems like a bad example given how its arguably led to massive consolidation in beer

emodendroket4• 3 years ago

I question the assumption that simply letting more small players compete is going to improve outcomes for anyone who doesn’t happen to own one of these smaller businesses.

TriangleEdge• 3 years ago

Amazon also has excellent code building and deployment infrastructure that could be it's own business.

kortilla6• 3 years ago

Vertical integration is fine as long as there are competitors at each layer.

edgyquant4• 3 years ago

No it isn’t. Integrations, both vertical and horizontal, should be discouraged and companies should do one thing and do it well

dehrmann2• 3 years ago

Delivery logistics

I wonder if there's a model where carriers cooperate on last-mile delivery. Maybe form company they all invest in that goes from regional hubs to homes. It can't be efficient to have 4+ carriers delivering to the same neighborhood.

kiney• 3 years ago

As someone living in germany: We don't have a three tier system. But we have literally thousands of breweries selling better beer at waaay lower prices than in the US. So your three tier systems sucks...

edgyquant4• 3 years ago

we have literally thousands of breweries selling better beer

This may have been true a decade ago, but today there is an entire microbrewery scene in the US where there are hundreds of them inside individual states. Better is subjective, sure, but any kind of beer you get in Germany you will find a few dozen US microbreweries making the same.

downrightmike• 3 years ago

The USA used to have a system like that, we have a long history of brewing, but then we had to go fight the Nazis, so everything was rationed and industrialized. That's why our most popular beers suck.

jacooper• 3 years ago

Lets hope this doesnt become a secret trial like the google one.

lvl1027• 3 years ago

Out of all the natural tech monopolies, Amazon is the ONLY one that did the opposite of exercising market power. They actually brought fast shipping to the market. A decade ago, you had to pay a crap ton of money to ship things even two days. They forced the incumbents such as Walmart to change. They’re constantly improving e-commerce. Heck they even opened up aws and created an entire industry. Amazon did more to reshape commerce in the US than anyone in the past two decades.

What more does US govt want?

sschueller• 3 years ago

They straight up copied products in their store an then listed theirs higher in search results. There was a famous instance of a bag. You can't be more monopolistic than that.

They also got insight into every states future plans (which are secret for some reason ) when they offered to build new HQs but then decided not too. This gives them a huge advantage over anyone else who wants to setup a nation wide logistics service.

hrdwdmrbl9• 3 years ago

That's not what the word "monopoly" means though...

jessriedel• 3 years ago

They straight up copied products in their store an then listed theirs higher in search results. There was a famous instance of a bag. You can't be more monopolistic than that.

Almost every major grocery store and convenience store chain does this. These are the store’s generic brands, they are specifically designed to be copies of the name brand, and they are positioned more favorably on the shelves. (They often say “compare to [name brand]”.) In general, this is highly beneficial to competition and the consumer.

If you want to make an argument that Amazon’s high market share makes this strategy damaging when it would otherwise be good, then sure go ahead and do that. But the argument needs to be specific and quantitative.

lbsnake7• 3 years ago

They did all those things unsustainably so they could gain market share and raise prices when people were locked in. Similar to Uber and AirBnB etc. All those things are good but not feasible and subsidized by the capital/venture markets. The game is market share and ecosystem lock-in both from suppliers and customers.

A truly competitive marketplace allows any supplier to easily match with any customer. Suppliers gain market share by being the ‘best’, not by being the only option.

ChadNauseam2• 3 years ago

How is it priced unsustainably/subsidized by venture? Amazon is profitable.

lvl1027• 3 years ago

How did they actually raise prices? They are still competing on prices on everything. They have the best return policy even besting Costco. FTC and Lina Khan can pound sand. They should go after Walmart for destroying American towns and small businesses before they go after Amazon. I cannot think of a single company that produced more utility for consumers than Amazon.

likpok3• 3 years ago

Less market concentration. Lina Khan, the current head of the FTC, argued before she got the job that market concentration and not consumer harm was a better target for antitrust enforcement.

Amazon does exercise a fair amount of their market power. FBA policies are generous to the consumer and to amazon, taking it out of the third party sellers. The other classic example was IIRC diapers.com which was a sharp competitor until Amazon bought it and raised diaper prices. It's possible this was all a ZIRP fad, and diapers.com was burning through investor cash, but still a pretty clear-cut case of consolidating market power (at the time the FTC did not consider it illegal).

usaar333• 3 years ago

Antitrust law in the US was traditionally to protect consumers. I'm not seeing consumer harm on net from Amazon.

kortilla6• 3 years ago

market concentration and not consumer harm was a better target for antitrust enforcement.

By what reasoning? If it’s not harming consumers then what is the issue being raised

lukeinator42• 3 years ago

Along with this, I don't understand how the part of the lawsuit that says "Conditioning sellers’ ability to obtain 'Prime' eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service"

is solely an anti-competitive tactic, because how else would Amazon guarantee the fast shipping, etc. if they aren't in control of the fulfilment? I thought prime is only possible through amazon distributing third party products to their warehouses all over so that the shipping can be so fast.

reilly30002• 3 years ago

Even if this action turns out to be toothless, it should still go a long way to shape public perception. I cancelled Prime 3 years ago and really haven’t looked back. I simply shop elsewhere, and between Target and eBay I don’t miss a thing. The Echos got unplugged, the AWS certs didn’t get renewed, their music service got canceled. I am all out and I hope others will do the same. For me this was driven by their anticompetitive behavior as well as terrible treatment of staff from warehouse workers to web developers. This FTC suit brings a new level of attention and gravity to their insidious practices.

Obviously a firm that massive can’t be all bad. As a consumer, the only thing I have is choice in how I spend my time and resources based on the information I have.

vagabund• 3 years ago

I don't know, your easy access to alternatives that've let you not "look back" kind of undermines the argument that they wield monopolist power, doesn't it? And should FTC suits really be vehicles for shaping public perception, even if, as you suggest, the claims are either not defensible or don't constitute violations?

reilly30002• 3 years ago

The fact that competition exists does not mean that AMZN isn’t engaging in anticompetitive behaviors. FTC should be consistently enforcing law in their domain i.e. The Sherman act of 1890 and others.

“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.”

Public perception isn’t their motive, I’m just cheering for it. Moreover I’m glad that antitrust enforcement has ramped up of late. I wish it had started sooner, I believe we would have a healthier internet ecosystem if that was the case.

thomastjeffery9• 3 years ago

They only passively mentioned fulfillment.

The fact that Amazon owns the market and fulfillment and even last-mile delivery is the most obvious case of vertical integration I have ever heard of, and I personally interact with it in some way at least once every week!

hrdwdmrbl9• 3 years ago

Is vertical integration illegal?

thomastjeffery9• 3 years ago

Is monopoly illegal?

That's very nearly the same question.

cosmonoot• 3 years ago

Why now?

gigatexal• 3 years ago

Was there a similar action taken against Walmart when they were crushing small and large suppliers alike?

sparrc• 3 years ago

Nope, the FTC has been historically toothless from 1990-2020 or so. Some people (such as Lina Khan and Joe Biden) are trying to turn that around.

Doesn't seem likely to fully turn around as the next Republican president will likely appoint another toothless chair of the FTC.

Democrat presidents for the foreseeable future will probably be going after big companies more than their predecessors in the 90s and early-2000s did.

peyton• 3 years ago

The FTC is an independent, bipartisan agency. It’s not something a future president should be using to “go after” anybody to further his or her party’s agenda.

runako2• 3 years ago

Without engaging the merits of this particular case, I do think there is an interesting takeaway about which companies wield even more power than Amazon (and Big Tech more generally, since Google and Meta are also discussed as likely targets of similar suits).

Notably: health insurers. They're an oligopoly whose revenues total something like 4% of US GDP. They engage in anticompetitive practices, and the end result is far more consumer harm than Amazon can do. (Because people generally spend a lot more on health insurance premiums than they do on Amazon in a year.)

Similar could be written about e.g. airlines.

Lobbying works. Tech will eventually figure this out.

tqi• 3 years ago

Lobbying works. Tech will eventually figure this out.

Tech is well aware of this, and is spending accordingly[1]. However I think politics are a bigger motivating factor, and taking "tech" to task is viewed as a good way to score points (probably helps that legacy media views tech as direct competitors, and covers them accordingly).

[1] https://www.cnbc.com/2023/01/23/apple-ramped-up-lobbying-spe...

runako2• 3 years ago

They kind of get it, but are not at the magnitude yet where it would be effective enough to squash these types of interventions. By comparison, healthcare lobbying spends more every quarter what Big Tech did in all of 2022.

kibwen• 3 years ago

The irony here is that Amazon is literally a health care provider, after acquiring One Medical.

Break all these companies up, before we find ourselves even deeper in a cyperpunk dystopia.

joe_the_user• 3 years ago

Much as I might see health insurers and private medical companies in general as often bad actors, I don't think "more competition" is at all a reasonable suggestion for any part of the health sector. Health insurance companies naturally need to be regulated - just one reason among many is that anyone could take people's money, pay claims for a bit and then vanish with money paid to shareholders who aren't liable for the scam. And once you have an industry, health care, that must have detailed state regulation, the only solution is nationalizing the industry, as medicine is nationalized in most civilized industrial nations.

edgyquant4• 3 years ago

They may need to be regulated, but that doesn’t change the fact that something is seriously broken and real competition would help. Regulation is surely part of the problem but maybe not all of it. The entire idea of “networks” seems designed to allow them as little competition as possible.

marcod2• 3 years ago

airlines

https://www.theatlantic.com/ideas/archive/2023/09/airlines-b...

say_it_as_it_is• 3 years ago

"anti-discounting tactics"

One set of tactics stifles the ability of rivals to attract shoppers by offering lower prices. Amazon deploys a sophisticated surveillance network of web crawlers that constantly monitor the internet, searching for discounts that might threaten Amazon’s empire. When Amazon detects elsewhere online a product that is cheaper than a seller’s offer for the same product on Amazon, Amazon punishes that seller. It does so to prevent rivals from gaining business by offering shoppers or sellers lower prices

Price competition conflated as punishment. The FTC's mandate is to promote competition. Here, they attack Amazon for competing effectively.

Also, advocating for other online superstores is playing the world's smallest violin. Walmart has decimated mom and pop stores. They're unable to beat Amazon at the online game. Truly remarkable achievement, really.

Why are redactions even permitted in a lawsuit involving a government agency and a corporation? Don't mention Project Nessie at all if you can't tell the public what you're arguing about. "Trust us, they were monopolists" isn't the same as laying out the facts for all to see.

thomastjeffery9• 3 years ago

Buying your competition is competitive? Bullshit

lolinder• 3 years ago

Does anyone know more about Project Nessie? There's a portion of the complaint [0] that is heavily redacted from page 123 to 126. The only information that isn't redacted is this:

* Project Nessie is an algorithmic pricing system

* "Amazon's Project Nessie has already extracted over [redacted] from American households."

* "this scheme belies its public claim that it “seek[s] to be Earth’s most customer-centric company,”"

* It's related to Section VI.A.3 (Amazon maintains its monopolies by suppressing price competition with its first-party anti-discounting algorithm)

Amazon themselves identify Nessie as the system that monitors spikes or trends [1], so my hunch is this is some sort of surge pricing system. Does anyone here know more?

[0] https://www.ftc.gov/system/files/ftc_gov/pdf/1910129AmazoneC...

[1] https://www.aboutamazon.com/news/amazon-offices/the-surprisi...

capableweb• 3 years ago

Guessing this is also related, from page 10:

    Amazon has implemented an algorithm for the express purpose of deterring other online stores from offering lower prices.
    [redacted]
    Rather than trying to compete, Amazon uses
    [redacted]
    Ultimately, this conduct is meant to deter rivals from attempting to compete on price altogether-competition that could bring lower prices to tens of millions of American households. As a result of this conduct, Amazon predicted, "prices will go up."

hotnfresh4• 3 years ago

What especially rankles is how Amazon doesn’t give a fuck about counterfeits. So they’re allowing counterfeits (amplifying the mentioned effect) to discourage direct-sellers from attempting to compete on price.

Meanwhile, I have to order from direct sellers to be sure I will get a genuine, new product. So I don’t even get Amazon’s lower-but-still-higher-than-optimal price, but a yet higher one.

As far as I’m concerned the whole company’s a giant scam and I can’t believe it still hasn’t caught up with them. They benefit so very much from enabling bad actors, and have for so long clearly without any serious attempt to stop it, that I’ll do a happy dance the day they go under or get broken up. I just wish the eventual consequences could force Bezos to have to work for a living again, since he’s built his empire on fucking people weaker than him. Shouldn’t get to keep a penny of it.

Modified3019• 3 years ago

Fucking finally

costco2• 3 years ago

Amazon makes more gross profit in a day than the FTC has revenue in a year. Good luck!

brianstorms2• 3 years ago

I signed up as a Seller on Amazon a while back, with one primary goal: sell extra copies of my book, published by Pantheon Books in 2017. The publisher offered me boxes of them at dirt-cheap prices and I took them up on their offer. So I started selling on Amazon, and I set my price as the lowest possible for "New" condition hardcover.

For a while my price got listed on the main book product page. Only briefly though. Then it disappeared, and another seller got the glory of the link for a "New" 3rd party seller, and their price was HIGHER than mine.

Amazon does not want to advertise your price if you are too low for their liking...

Suddenly, in July, my mom dies. I have to travel to the east coast for the funeral, etc., so I put a hold on the one and only item in my inventory -- my book. Effectively this takes me offline temporarily as an Amazon Seller which was fine.

BUT . . . when i get back home, I try to re-activate the account and find I cannot. INSTEAD, I get this notice from Amazon that my account is suspended, and that it's mandatory I go watch all these training videos about COUNTERFEIT products, how to spot them, why not to sell them, why it's illegal, etc, and that I do not have permission to sell counterfeit "Pantheon products." And I'm like, WTF? I'm selling the real deal, from Pantheon, and I AM THE EFFING AUTHOR AND THESE ARE MY OWN BOOKS.

I try to communicate with Amazon Seller Program and get nowhere (I think they deliberately hire only people who don't understand English). They refuse to explain anything about this absurd counterfeit stuff.

So I contact Pantheon. They just laugh. They had nothing to do with it, but weren't surprised -- they kind of hate Amazon.

THEN I get a new notice from Amazon that my account is disabled permanently due to lack of use.

WTF!?

So: here is my theory. They were pissed I had a super-low price, and when they saw me temporarily disable my inventory as I'd be away for a week for a funeral, they swept in and shut me down, with some kind of made-up lie about COUNTERFEIT (I mean, can you believe these guys!?). And nothing is resolved, and we're on the verge of October.

Amazon sucks.

bombcar• 3 years ago

You haven't even begun to enter the world of unscrupulous activity, and Amazon is mostly 'hands off' because they don't care - but other 3rd party sellers DO and they know all the tricks about how to pump alternative sellers off the page, etc.

The whole thing is a worthless Alibaba ripoff now.

brianstorms2• 3 years ago

Do you think some other seller falsely "reported" me, claiming my copies my be counterfeit, for surely there was no way I could offer them so cheaply to beat out the next cheapest seller by, what, 50 cents?

jrockway2• 3 years ago

I guess we figured out their algorithm. `if random() < 0.01: make_user_watch_training_video_about_counterfeits`. Even if they actually fixed the problem by having an alarmingly high false positive rate, I don't see how I would ever trust them. For example, some places don't do business with them, so if you see like an Apple cable on there, it wasn't shipped from Apple to their warehouse. Maybe it's real or maybe it's counterfeit, but why gamble?

What's great about Amazon is that they kicked their competitors into gear and there are a lot of reputable vendors that offer cheap overnight shipping now. (B&H is my go to for electronics.)

ClumsyPilot• 3 years ago

They were pissed I had a super-low price... they swept in and shut me down, with some kind of made-up lie about COUNTERFEIT

If true, we have a name for this, its called fraud. Little people like you and me go to prison for it.

no_wizard3• 3 years ago

It is funny, that small and even sometimes medium business owners go to jail over things like fraud, failure to pay taxes, even labor violations. I remember local instances being reported on in the our (thankfully still around) local paper.

Yet, if you are big enough, the government can barely muster the strength to issue a fine. Rarely to executives at big firms go to jail unless there was something Enron sized egregious happening

naikrovek• 3 years ago

never attribute to malice what can be explained by stupidity, EXCEPT when money is involved. if money is involved, and it can be explained by malice, then it is malice, every time.

the other seller likely reported you as counterfeit, and Amazon believed them.

jstarfish3• 3 years ago

never attribute to malice what can be explained by stupidity, EXCEPT when money is involved

The FAANG corollary:

When you make it a point of pride to only hire the smartest, most elite engineers on the planet, presumption of stupidity no longer applies.

anigbrowl• 3 years ago

Sue them in small claims court. It's perfect for this, you just bring in your documentation and write up a timeline for the judge.

musicale2• 3 years ago

Interesting idea - has anyone tried this?

Does Amazon retaliate and ban you permanently if you win?

hippich• 3 years ago

Afaik, small claims courts are for specific monetary damages only. I feel like it would be hard to prove specific cash amount lost due to Amazon actions. It is also very likely one or more of documents one have to accept in order to open seller Central account requires signing away the right of settling dispute in courts, and instead use arbitration process.

eitally• 3 years ago

My nextdoor neighbor is a shoe salesman (in the US). He traditionally dealt with a region of retailers on behalf of his employer, a multi-brand company like VF, Clarks, Born, etc. In his previous role, he was asked to try to figure out how to add Amazon as a B2C channel. He did, and it essentially became his full time job. A couple of years ago he was laid off, and when his new employer (differently shoe company) learned he knew how to "use Amazon" he was immediately reassigned from field sales to full time online. According to him, there are so many quirky and esoteric things about selling through Amazon it's nearly impossible to figure out how to get started, much less understand nuances of pricing, taxes, shipping and returns, and -- as you said -- Amazon support is conflicting and inconsistent at best.

Nowadays, I'm fine buying consumables from Amazon if I need them asap, but for any name brand stuff I specifically want, I prefer purchasing elsewhere. If reviews were trustworthy, it'd be one thing, but with Amazon having turned into AliExpress, it's impossible to know whether any of the Chinese brands are actually trustworthy and of high quality.

dirtyid• 3 years ago

it's impossible to know whether any of the Chinese brands are actually trustworthy and of high quality.

IMO people buy cheap generic Chinese brands for the same reason they buy cheap dollar store products. They're gambling they can pay 30% the price for 90% of the function. Amazon reseller premium = they're paying slightly more for returns in case things break. They can save more buying from Ali resellers. Even more while temu subsidizing orders. The only people looking for quality are people who order from resalers of established PRC brands, i.e. Xiaomi. In the days before Amazon cracked down, you had brands like MPOW decide better marketting strategy was to give people gift cards for reviews and give no question asked replacements well outside of warranty period. Pretty win-win for consumers.

redbell• 3 years ago

Your story is a true tragedy and hearing such stories makes me feel sad.

I believe it’s, mostly, these unfair, monopolistic practices that made those companies giants because they can, technically, crush anyone willing to swim in their red ocean.

Normally, you could easily file a lawsuit against them and got them pay you 10x the damage they caused.

drewbeck• 3 years ago

tragedy … giants … red ocean …

Manchurian commenter activated … proceeding to step 2 …

jm4• 3 years ago

Amazon became a giant because they were genuinely good before they became what they are now. For a long time, they offered a superior online shopping experience. The prices were good, the processing time was faster than anyone else, the shipping was fast and reliable, the site was easy to use, etc. Then all the third party sellers, whack-a-mole Chinese brands, and counterfeits took over the site. I thought Amazon was great when they were the retailer instead of a marketplace.

xattt2• 3 years ago

Amazon sucks

I’m not sure but I feel the need for some legislation to force large companies to provide human-to-human contact in the event of a dispute.

Even in the world of Brazil, the 1988 movie, there were humans somewhere in the mix.

22289d11• 3 years ago

They were pissed

Huge corporations do not get pissed. It's not personal. They were not angry or acting spiteful.

Note: I'm only addressing those three words, not any other points you made.

iteratethis• 3 years ago

What this world needs is pro-active legislation.

The current state of Amazon is the result of a very slow trajectory taking 20 years. It happened in plain sight and still we allow it to grow until it's a monster where most of commerce has to submit to.

We allow Google to become the leading search engine, advertiser, browser maker, mobile operating system maker. Effectively owning the internet. These should be 4 companies, not one. And even the 4 companies should not be of the current size.

Stop allowing companies to grow into platforms, gatekeepers, monopolists that squeeze everybody dry.

The current state is anti-market and anti-capitalistic. There no longer is any market when you allow these monstrosities.

shadowgovt• 3 years ago

Hm. From an American law standpoint, this suit is thin on the ground for consumer harm. I can see the competitor harm, but IIUC US antitrust is generally grounded in consumer harm.

I'll have to see the argument they actually make in court.

jupp0r3• 3 years ago

I find the premise that Amazon has a monopoly to be pretty far fetched. I order goods online from various shops all the time.

pmarreck3• 3 years ago

I don't like it, but I kind of don't blame them because it's, frankly, a rational act.

Everyone vies for control/power. Once you have control, you can exert pressure to get more from less (this is essentially what "bullying" is). There's nothing (but any laws set up to counteract this) stopping you, so you do it, because relative to you, there's only upside. Can you really blame these entities for taking advantage?

Literally, the thing we all want more of (success and control), will turn us into bullies. Veeeeery few people, or companies, get to that point and then continue to "play fair", at least completely. So we set up the system with rules we think will limit this, but it's not perfect, so rules get exploited.

In games (which are systems and sets of rules), one of the most fun things is to discover an "exploit". Sometimes this comes from a developer oversight, sometimes this comes from rule complexity leading to unexpected states, sometimes from bugs. I remember figuring out how to get an extra enchant on a weapon in Neverwinter Nights (I somehow got 1 past the supposed limit) and how fun that felt. But there was no cost to other people in doing this. (At worst, if I found too many exploits, the game would stop being fun due to not being challenging, and I would just "cheese" through it.)

Amazon is a bully that is cheesing its way through the rules, at some unknown but probably large success cost to many other people vying for the same control. Perhaps it's time to dismantle the bully dominating the schoolyard lunches.

josh_carterPDX• 3 years ago

I hope this works. There hasn't been a big monopoly break up since the 1982 break up of AT&T. And with this conservative supreme court, I'm not holding my breath that this will actually go through.

Mistletoe• 3 years ago

It feels like things are getting better.

skinkestek• 3 years ago

Good!

Does this mean FTC got a new spine (or have I misunderstood and they had one all the time)?

If so:

Can I also suggest someone looks into:

- Googles abuse of market position to take over the browser market

- Microsoft trying to abuse their market position to take over the browser market (again)

talent_deprived• 3 years ago

When Microsoft was accused of monopolistic behavior for integrating IE into the OS IIRC it was the DOJ who went after them. In this case, it's the FTC, seems like it should be the DOJ to go after Amazon based on Microsoft's case.

tantalor• 3 years ago

"most customer-centric company"

I don't think anybody actually buys that line.

Do they believe that internally?

InitialLastName• 3 years ago

The funny thing about slogans is that you can almost always count on the sloganeer to embody the opposite:

- Don't be evil

- Drain the swamp

- Hope and Change

Nevermark• 3 years ago

- “Free”

ashbee2• 3 years ago

Some do, some don't.

I know some folks who really genuinely believe that Amazon is a force for good, the criticism is exaggerated, will talk about how lucky they are to work for the World's Best Employer, and will get a bit sulky if you say anything negative about the company.

Generally though, I think it's understood that "most customer centric company" doesn't mean "we will put the customer before ourselves because we are such good people", but instead "strategically keeping the customer happy is better for the shareholders in the long run".

It's the same with most of the LPs. They're packaged in a way that makes Amazon sound like this amazing company that really cares, but they boil down to "16 ways YOU can enrich Amazon's shareholders (you won't believe number 15!)".

Xeronate• 3 years ago

I've never met anyone that thought the LPs were meant to imply Amazon "really cares". I like Amazon because it seems more straightforward than other companies. It's a business and it wants to make money. The only way I've ever interpreted "customer obsession" is that it's mutually beneficial to do what's best for the customer.

onebot• 3 years ago

Will they ever go after Ticketmaster?

kypro• 3 years ago

Amazon should just change their business model. Instead of requiring sellers sell their products for a competitive price on Amazon they should do the same thing Apple does and just charge sellers a large margin on sells on their platform. Obviously this would mean higher prices for consumers but if the problem here is that Amazon is forcing sellers to price products lower than they'd like then that would fix the issue.

thisgoesnowhere• 3 years ago

Well yeah but that's the whole point. They don't want to do that because they would make less money because you could always go to the seller directly to get the product for less.

seanmcdirmid3• 3 years ago

You can always go and use Alibaba to buy more directly, although still not direct. Small scale producers in China learned the value of an e-commerce platform a long time ago, you can't usually find them direct anymore.

billy99k• 3 years ago

I was an Amazon seller 10 years ago. I noticed that as soon as I started getting some traction, Amazon would start selling alternatives and undercut me. At some point they started asking for proof of sales. This was then further used to compete against me.

At some point, I had a complaint, refunded the customer completely, and they outright banned my account and held my money for 90 days (I got all of my money back after the 90 days). It completely wiped my business out and I never looked back.

I was banned to the point where if another seller was associated why my account at all, they were also banned. All of my calls went nowhere and I was pushed to automated responses.

12+ years later and I have my seller account back. Not like I'm ever going to sell anything on Amazon again.

jongjong• 3 years ago

At the root, the problem with big tech is the monopolization of people's attention. There is essentially no way to gain any meaningful exposure to users without going through big tech platforms and they limit the exposure. Even if you buy ads from them, you never know if your product is being put in front of real users or bots. They seem to favor big, established companies.

I also blame modern journalism for being heavily centered around corporate interests. They won't cover any product or tech which isn't backed by big corporations. That is a major source of anti-competitive dynamics. It feels like every journalist has been bribed to the eyeballs to only cover products from certain companies.

vhiremath4• 3 years ago

Yeah I’m kinda on the fence about this. On one hand, I see the case that this diminishes the open market. On the other hand, Amazon is doing this all within their own ecosystem. So it’s a bit disingenuous for the FTC to say that this has nothing to do with their size. The problem the FTC keeps skirting around on anticompetitive is the fact that the internet favors power differentials, so we’d have to ding any company that has massive market distribution and tweaks their platform to favor participants exclusively on their network

Network effects have not been accounted for in antitrust. That’s the core of the problem. Not the fact that Amazon is tweaking algos. Every major player is doing that.

I like Jerry Chen’s piece on “The New Moats” (ahead of its time published in 2017) that calls out the progression of tech going from systems of engagement -> systems of record -> systems of intelligence. It feels like this is one (of many) consequences of that progression:

https://news.greylock.com/the-new-moats-53f61aeac2d9

dantheman• 3 years ago

I'd argue that anti-trust is a fundamentally flawed concept - it's a matter of time frames, but no company without significant government intervention has had a 'monopoly' for more than a few years. Hell, Standard Oil was only 64% market share when it was broken up.

IshKebab• 3 years ago

Google has had >90% market share for decades. Windows had >90% market share for several decades.

miguelazo• 3 years ago

Nice to finally see this, so many years after online retailers (read: Amazon) were given total exemptions from sales tax in order to not “stifle innovation”. We subsidized the destruction of brick and mortar retail, and by extension, many of the retail spaces that served as community anchors. It will take decades to recover, if it’s even possible at this point.

talldatethrow• 3 years ago

People say Temu is garbage, but every time Im about to buy an 80 cent flashlight on Temu, or motorcycle googles, or 100 amp 12v circuit breaker for $6... I go to Amazon and find the EXACT same part for 300-800% more money with THOUSANDS of reviews.

Amazon still has decent things obviously. But if you're going to buy junk, atleast buy it straight from the source for pennies on the dollar.

adventured• 3 years ago

It's not a coincidence that Bezos ran for the hills exactly like the Google founders did, with the anti-trust writing on the walls. Bill Gates did the same thing as well (although he stuck it out a bit longer), exiting with the anti-trust heat.

They're all terrified of the invasive investigations and what could be revealed, the scrutiny they'd be persistently under, and the time demands involved (it's no doubt miserable battling the government in a major anti-truist suit).

whiddershins• 3 years ago

I don’t understand this point:

>> For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible. >>

This means if Amazon sees a lower price elsewhere they effectively make the product unavailable on their site? Or is it more complicated than that.

On the face of it, while I am open to the stance this is monopolistic, I can naively understand why Amazon wouldn’t want to offer a product at a price that isn’t competitive.

I’m sure there’s more to it, can someone explain?

ctvo3• 3 years ago

Amazon has a “buy box” where users can see the default seller for an item and quickly add it to their cart or buy it now. This is prime real estate as most customers won’t think twice about adding the default, pre selected option.

I believe the way it works is as a seller you’re no longer eligible for the buy box if your item is found to be sold cheaper elsewhere.

what-no-tests• 3 years ago

What's the alternative?

Nationalize all online selling, and have a central pricing authority?

Where does one draw the line, with an interest in not taking it to the extreme?

innocentoldguy• 3 years ago

In my opinion, as an ex-employee, Amazon is intentionally abusive to its sellers, content creators, customers, and employees. I'll never buy or sell anything on Amazon again (or patron their related businesses, like Zappos, Abe Books, etc.), but I hope this lawsuit changes things for those who do.

1vuio0pswjnm7• 3 years ago

27 Sept 2023 Interview with FTC Chair Lina Khan

https://26043.mc.tritondigital.com/OMNY_SOUNDON_P/media-sess...

dgreensp• 3 years ago

There are always so many blindly pro-business comments on stories like this, like when the Theranos stuff was happening, people were saying "come on, she was just pitching big returns and innovations like any start-up does," ignoring the difference between pitching and straight-up lying or deliberately misleading investors about current facts. Similarly, it seems like many commenters are defending Amazon not based on the facts or legalities of the situation, but just from a place of being more emotionally sympathetic to a giant corporation trying to make a lot of money through various business tactics.

We don't have a surplus of regulation in the US (contrary to what Republicans who want to get rid of the EPA, FDA, etc would say). When we actually have laws that say things like, you can't union-bust, you can't defraud investors, you can't behave monopolistically--and there may be subtleties to those laws that most people don't understand--and companies go so far as to violate those laws, it's a very good thing when they face consequences.

rottencupcakes• 3 years ago

VC Twitter's crazy right now. It's as if Amazon was everybody's best friend.

User xattt says in a different thread on this story (https://news.ycombinator.com/item?id=37667379)

I bet dollars-to-donuts that half of those folks don’t know how to articulate the sentimental attachment to their Prime subscription either.

It seems that applies up and down the population.

jdminhbg2• 3 years ago

There are always so many blindly pro-business comments on stories like this

Where? All of the comments above yours are anti-Amazon.

Regardless of which “side” is “right,” I don’t think you can argue that HN has a blind pro-big-business slant.

jplusequalt• 3 years ago

Maybe not a "blind" slant, but there is a slant nonetheless. I frequent programming communities on twitter, reddit, etc. and HN is consistently the place with the most sympathy for corporations.

(In my experience it's also the community that has the most anti-intellectualism/distrust of science as well, but that's a discussion for another time)

karanlive• 3 years ago

Long overdue. Amazon charges unfair seller fee for listing, closing and referral. We end up paying 27-32% for each apparel sold. We've been advertising on their website since 2021, every day and lately the results are just poor. Amazon should be held accountable for their business practices. It has become a platform that doesn't favour the seller one single bit.

KETpXDDzR• 3 years ago

Are there any useful alternatives? I tried Walmart+, but they make you feel guilty to tip the drivers and their search function is mediocre. Also, comparing to Amazon, the prices seem higher or equal.

cm20122• 3 years ago

The lawsuit is a joke and I'd bet $100 that the government will lose.

xyzelement2• 3 years ago

This rings a little hollow to me because as a consumer, wouldn't I have noticed a lack of non-amazon options?

My family buys on Amazon a lot but I am well aware that I can buy any of that stuff, including at times for a lower price, elsewhere - from company website to Costco to Walmart market, via Google shopping, etc.

Doesn't the existence of these infinity choices make claims of monopoly a bit farfetched? I am sure it's more complicated than this, but... is it?

Given_47• 3 years ago

This rings a little hollow to me because as a consumer, wouldn't I have noticed a lack of non-amazon options?

You haven’t? What sorts of products do u typically browse/shop for?

xyzelement2• 3 years ago

All kinds of house hold stuff, appliance parts, whatever. What would be an example of something I can only get on Amazon?

neycoda2• 3 years ago

Finally. This is the kind of thing that needs to happen to all of these giant corporations and utilities fighting for monopolies.

Incidentally I heard today how many laws against anti-competitive behavior were stripped with Carter and Reagan onward, and it's become a trend in our hyper-corporatist world now that's hurting workers and income classes below the highest.

Watch "DEF CON 31 - An Audacious Plan to Halt the Internet's Ensh*ttification - Cory Doctorow" on YouTube

https://youtu.be/rimtaSgGz_4?si=bZRjT1eeu4YBZJJJ

baseline-shift• 3 years ago

Good news for a change. Government is supposed to protect us from business.

joshribakoff• 3 years ago

Good. Amazon lies to customers too. They will tell me things like go down to UPS and buy a box and we will refund the cost, then when you chat back they waste hours and request screenshots and then still refuse to issue the refund. They started treating customers like dirt and refusing to honor their own policies within the last year or so. Additionally they will do things like end the chat abruptly or transfer you around 15x repeating the same questions over and over. In another case they promised a full refund and only after I returned the item told me I wouldn’t get a refund due to “restocking fees”. Its too egregious to not be intentional. I will specifically spend more money just to avoid them because the wasted time and frustration isn’t worth any marginal savings.

viking1066• 3 years ago

FTC is misguided.

They just punish Amazon for being successful.

On the other hand, they (DOJ) should use the maximum might of the criminal law to prosecute using fraud statutes for sellers (and Amazon itself) when ratings have been manipulated, resulting in decades in prison.

jiveturkey2• 3 years ago

huh. i didn’t know the FTC did this. i thought anti trust was federal territory with DOJ. is TFA just borrowing the word monopoly and this isn’t an anti trust case?

syndicatedjelly• 3 years ago

“We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition. “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”

Really, really hope this isn't another woke crusade by Lina "0-2" Khan that promises to delivery a random victory to "the common person" and then ultimately fail to do anything meaningful.

user_named2• 3 years ago

This is a classic antitrust case. Like the film studios in Hollywood controlled talent, finance, production and distribution, Amazon controls too many parts of the process giving them undue market power with which they abuse their so called partners. They should absolutely be broken up.

skeltoac3• 3 years ago

FBA seller here, too. I make and sell my own patented device which nobody else makes or sells. I have competitors in the same category but my product is novel, more functional, and more expensive to make.

I was doing FBM (fulfillment by merchant) because I like shipping my product directly from my place of business but I had to switch to FBA to get my sales to go up. They were already getting half but now Amazon is getting more than half of my revenue.

I also have my own site where I can sell for the same price and keep much more of the revenue, but most shoppers won’t buy if they didn’t find it on Amazon. If I leave Amazon or raise my Amazon price to recoup the costs or stop paying for FBA and Amazon ads, I lose almost all of my sales. This is all because Amazon is doing anticompetitive things with its monopoly power. Enforcement is needed. I don’t know what the injunctions will propose to do but I’m eager to find out.

What really kills me is knowing how my customers would feel if I told them how much of their purchase price is being kept by Amazon. They value my product enough to buy it for that price. The few who really understand Amazon always offer to buy it directly from me so I get to keep more of the money. If only everyone understood that.

I have to spend some more time and money optimizing my Amazon listings and then I will turn my focus onto my site and spend all my effort building my business to survive in spite of Amazon.

Literally in spite.

Pikamander2• 3 years ago

I also have my own site where I can sell for the same price and keep much more of the revenue, but most shoppers won’t buy if they didn’t find it on Amazon. If I leave Amazon or raise my Amazon price to recoup the costs or stop paying for FBA and Amazon ads, I lose almost all of my sales. This is all because Amazon is doing anticompetitive things with its monopoly power.

Can you expand on what you think Amazon is doing wrong here?

When I buy products online, I almost exclusively buy them from Amazon because I've had too many bad experiences with other sites. That strikes me as a case of consumer choice, not anti-competitive practices.

I once purchased a Japanese candy pack from a supposedly-reputable website that was supposed to be a Christmas gift, but they didn't give me a tracking number and wouldn't refund it after a month of no delivery until I filed a chargeback.

By contrast, I've never had any trouble getting Amazon to honor their refund policy for "Prime" products, which is why I've stuck with them.

skeltoac3• 3 years ago

Amazon charges exorbitant fees to Marketplace sellers and adds to the cost of everything sold on Amazon. Are you aware of who is the seller every time you buy something? When the seller is not Amazon, do you know how much of the price is going directly to Amazon? Is it worth it for what Amazon provides you?

In my category Amazon takes 15% of every sale. That’s even true for FBM where Amazon never lays eyes or hands on the merchandise. Also still true even though I have always taken perfect care of every customer. Good luck selling anything on Amazon without paying even more for Amazon advertising, a closed system with high prices. And then there’s the Prime badge and FBA, more expenses that you can hardly afford not to pay. Buyers are trained to demand them and Amazon reaps the profits.

If you buy from my website I pay a small transaction fee, shipping, and advertising. I can afford to sell for much less, making my customers just as happy or better since I can personalize the service in ways Amazon just does not allow.

But I can’t lower my prices anywhere off Amazon because they will retaliate by burying my product where nobody will find it.

Amazon customers (I admit I am one, too) are paying higher prices for almost everything they buy. But they/we are also supporting a marketplace regime that forces prices up everywhere. Everyone, not just Amazon customers, gets to pay the higher Amazon price.

My website customers are essentially subsidizing the profits that Amazon is making from my sales on their platform.

You might think you want someone big and strong like Amazon protecting you from scammy sellers. If they wanted to do that they would get rid of them and keep the good ones. Instead they keep the bad ones around so you get to experience their protection racket. You’re sticking up for the bully and paying for the privilege.

sfmike• 3 years ago

Made a purchase that was cancelled with shop with points. The points won't return and are "stuck in limbo". Cancelled Order doesn't show in order history either. I've contacted support with at least 50 support agents over several months and the standard you won't be charged if it's cancelled templated response is all they can muster to reply with. There's no way to contact anyone besides the templated responses. Essentially 900 dollars are gone and no support possible.

1-6• 3 years ago

These lawsuits are simply performances designed to rid the next administration’s power to do a real lawsuit. It will give Amazon a slap on the wrist and keep the company in monopoly.

lots2learn2• 3 years ago

I used to be an FBA seller and made an exit via sale to private equity (i.e. an aggregator). The FTC will likely fail on all or most fronts imo. Amazon's price fixing helps consumers because they simply don't show you the product if it's not the best price on the web. FBA fees are not "profits" taken by Amazon because logistics is not a profit-center for their business. Copying successful third party sellers' products, as annoying as it is (it happened to me more than once), doesn't appear to break any laws. Advertising costs keep rising yes, but again, how is that illegal? At some point, there may be an opportunity for some young entrepreneurial minded person to create their own marketplace open to third party sellers and undercut Amazon's commission (currently 15pct in most categories) and have cheaper advertising costs due to lower competition. The reason why currently this is likely not viable is that FBA is still faster and cheaper than any other existing fulfillment service last I checked. The margin difference between lower commission+cheaper advertising vs more expensive (and slower) fulfillment is still - I believe - in Amazon's favor. FBA, by the way, is open to use even if you sell on your own website. The service is called Amazon MCF (multi channel fulfillment), but the cost and speed is not as good as real FBA. I often wondered what Amazon gains by offering MCF and can't help but think it has something to do with making the appearance of not being anti-competitive.

FTC sues Amazon for illegally maintaining monopoly power

Related Stories