A bit tangential. But I have posted what seems to be a shady practice by Amazon's Prime Video.
A few days ago, I was watching Goodnight Mommy (2014) on Prime video (I'm a prime subscriber). I stopped before I finished the movie and went to sleep. But this evening, I decided to resume the movie, but Prime wants to charge me $3.99 to rent it.
This is not the first time I have noticed this. There were a couple of other movies that I returned to watch in a matter of a couple of days and Prime decided to start renting it.
What's worse, a couple of days after seeing them asking for $3.99 to rent that movie, the video became available again for free for me to watch!
I feel like it could either be coincidental (i.e. Prime taking the movie off for rental) or by design. Regardless, I lost my faith in Prime a little after repeated experience like that.
I had the same experience watching Mr Robot season 3. I just waited a week and it came back to watch for free.
Seems like a classic bait and switch and probably shady.
So it's real. Thanks for confirming my experience!
Could this same effect not be produced by a limited number licensing arrangement?
I noticed similar behaviour in Amazon Music, and the described behaviour in Prime Video. There does seem to be the appearance of bait-and-switch.
I have a buddy who sells some custom widget on his own personal website and when we were snowboarding in whistler in March of this year, he complained about this. He was saying that if his widget is $5 on Amazon, he can't sell it for $4 on his site or Amazon will take his product down. He also does 2 day shipping, but unless he pays Amazon for a prime badge, he can't advertise that through Amazon.
(Amazon seller/manufacturer here) What happens is that Amazon suppresses your listing from search so you don't get exposure.
Think about it this way, Amazon is customer-centric, so when it delivers search results it's implicitly saying "hey this is the relevant item at the best price per your search term". If it can't back that up then it'll often give a product substitute that is the best price.
IIRC, they got in trouble for this earlier this year for outright suppressing listings and had to back down a bit from this - instead of suppressing the listing wholesale you just get low traffic instead.
Amazon was built on the backs of 3rd party sellers. Amazon used them and these sellers are finally migrating to their own backends like Shopify or Woocommerce to build their business, not help Amazon build theirs. It's atrocious how Amazon is punishing them for this.
That was the whole game they played though, by design -- 3P sellers were partially meant as a prospecting tool for long tail product coverage in the marketplace, and when they found a product good enough now Amazon dips their toes in the pool and competes with them.
Some of the unfairness lies in that with the same-ish offerings, Amazon's search will favor the Amazon offerings - FBA instead of 3P shipping, Amazon.com as seller vs third party when the price/shipping is same, etc., but otherwise I think a lot of other things people complain about (cloning products and approaching manufacturers to cut off middlemen) are reasonably OK features meant to benefit customers. As a manufacturer and 3P vendor I kinda made my peace with Amazon on that I guess...
Yep, Amazon didn't do anything wrong, but when sellers catch on and want to own their actionable data and build their own operations, Amazon should let them. Locking them in further is not right.
I was one of those sellers and now I'm working on an opensource solution to help sellers migrate and not be dependent on Amazon FBA alone.
Everyone just needs to beat Amazon at their own game and do what many people are doing as 3p sellers and setup their Amazon presence under and different name and possibly even a different LLC.
If your 3p seller account is an "authorized distributor" of your product, then Amazon has no power to require that your website sell the product for the same or more money.
They're not requiring it. They just suppress the buybox if they see a cheaper offer, regardless of who's selling it.
What is 3p?
“Third party”. In this case it just means “not Amazon”.
3p == 3rd Party Seller.
Why is Google allowed to suppress sites, while amazon shouldn't? Or out sites on the third page where no one goes...
Why do 3rd party sellers matter?
They are just middlemen. It is a good thing that they are going away.
It results in power prices for consumers.
Because those middlemen create competition in an online marketplace that is increasingly monopolizing the online market.
And all 3p sellers are not middleman. Some are manufacturers and others are simply willing to take a smaller margin or are even selling used or refurbished products that people like me usually buy when given the opportunity to save a lot of money.
That's not a truism. If manufacturers only sell DTC (direct to consumer) and don't allow third party sellers to compete they do so for two reasons, price control and brand control. The lack of competition between third party sellers allows them to sell at any price the market will bare since they are the only ones you can buy the product from. When third party sellers can distribute/sell the product as well and there is no enforced MAP (minimum allowed price) it leads to a race to who is willing to accept the smallest margins on the sales, which in turn makes it purely a who can do the most volume with the best marketing. This actually results in the lowest prices for consumers.
> allows them to sell at any price the market will bare since
This doesn't make any sense though, as an argument.
If I am selling to 3rd parties, it is also true that I can set whatever price I want.
So, if I set the price to 5$, no 3rd party will be reselling my product below 5$. So I can still set the price...
The marginal price isn't constant. Third party sellers can buy large quantities for cheaper unit prices. It's essentially the manufacturer decentralizing their inventory risk and outsourcing the costs of dealing with a ton of individual consumers.
It’s a good question and it’s a shame you’ve been downvoted for raising it. The other answers don’t really get it to the heart of it. The question is why any company would deal with other companies rather than perform those same functions in-house. It has to do with the transaction costs of doing business with other firms and the efficiencies and inefficiencies of making your company larger and more complicated.
Ronald Coase wrote the paper that first got to the heart of this, one of the most important economics papers ever published: https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm
It won’t result in lower prices. The middlemen are the ones who are responsible for the low prices.
Exactly. Competition is what leads to lower prices. Getting rid of the middlemen and just having Amazon would lead to them having full control of what the price should be.
It's complicated -
On the plus side, 3p vendors contribute by getting a product from 0->1 or 0->100 units per day. This is what the industry calls "prospecting", and confirming that there is product-market fit for some product, and a lot of times marketing it in a way that causes it to sell. Supporting the customers, troubleshooting the various issues along the supply chain... this is something that a 3P seller usually contributes to (since a lot of times the manufacturer is focused on designing and making large quantities of product and not really focused on the rest of the supply chain).
This up-front work basically gets paid over time till it becomes rent-seeking behavior, at which point it gets disrupted by a direct relation between vendor and manufacturer. And basically the marketplace needs to hash out what's "fair" from prospecting to rent-seeking.
Suggestion: make two technically-different widget models, sell the more expensive one on amazon and the cheaper one on own website. The differences don't have to be much, but as long as they're different products you're compliant with Amazon's terms.
Technically all they really need is different UPCs. Appliance and electronics manufacturers have been doing this for decades so Walmart or Target can have "exclusive" items.
Or different companies selling the exact same UPC. Just don't let Amazon know it's owned by the same company.
But Amazon isn't the only one that does this. Walmart and co have the same rules.Sell at MSRP everywhere or they will drop you like a rock. Only the retailer gets the privilege of discounting.
Sadly nobody will care about breaking up the physical retailers.
Use a shade to list on FBA, give them wholesale pricing on the up and up for what your Amazon juice would be.
That's both not true and not the issue here.
If he sells some custom widget he can do whatever he wants with it. Amazon won't even know and/or care about what happens off Amazon. The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget.
You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance.
>Amazon won't even know and/or care about what happens off Amazon
Incorrect. They used to ban it, now it's officially allowed but they will actively monitor and block the buybox if your price is cheaper elsewhere. I've spoken to many sellers caught by this.
It was true when he told me, Amazon reversed its decision on this in March.
> That's both not true and not the issue here.
His widget doesn't actually cost $5, it's more. I'm just using the price as an example because he was extremely concerned about competitors stealing his product. He doesn't want Amazon anywhere near it because this profit margins are really high on his product. If Amazon.com's "Retail team" found out what it was, they would probably find his supplier or a knock off and try and make a low quality "Basics" version of it.
> The Amazon.com Retail team probably won't be interested in buying it and selling it for $5 if he's selling it for $4 on his own site, but the marketplace/FBA side of things doesn't care at all… assuming it's actually a custom widget.
He doesn't want to be fulfilled by prime, he manages his own shipping pipeline just a good as Amazon's. Amazon places rules on its merchants so that there is no way to compete without fully capitulating to Amazon's shipping policies.
> You don't explicitly pay for the Prime badge. You need a Professional account to sign up for Seller Fulfilled Prime, but your eligibility is based on volume and performance.
Oh and I used to work at Amazon so these practices are not surprising.
> He doesn't want to be fulfilled by prime, he manages his own shipping pipeline just a good as Amazon's.
As a consumer if I see a prime logo and it's not Fulfilled by Amazon I would feel scammed. Amazon Logistics is the only courier where I live that is reliable and on-time and I have little interest in buying anything on Amazon that is fulfilled a different way.
In that case, enjoy your fraudulent/counterfeit products.
The argument is they're tying usage of FBA to selling on their marketplace, which unfairly boosts FBA usage even if more expensive or worse service than competitors such as FedEx or UPS.
In particular, if you use FBA you aren't held responsible by Amazon for late deliveries but if you use other services you are. Also, their data shows only 15% of Amazon deliveries are actually meeting the 2-day timeline.
I can say firsthand, using FBA for a product absolutely boosts it's search ranking, and leads to an increase in sales. Sometimes dramatically so.
It's not uncommon to offer both FBA and FBM on the same item, in case you run out of stock of the FBA item or vice-versa. Same price, same delivery dates... but the FBA product will outpace your FBM product dramatically.
So those merchants that try to FBM exclusively are put at a double disadvantage - rank worse in search, and get harshly penalized if a product is delivered late (even though once it leaves your warehouse, it's up to the USPS/UPS/FedEx meet their delivery promise).
Also, the article alleges FBA fees are not in-line with market rates for 3PL, and the close tie between Amazon's Logistics Network and Marketplace has caused a price increase to consumers, which harms consumers unfairly - thus the Anti-Trust case.
What about purchasers who are tired of crappy FBM shipments? I bought a book on amazon FBM. It cost like $100. Turns out it was shipping from overseas and took 3 MONTHS to get to me (I was sure it would not). I had to buy a different one in the meantime.
I've bought FBM and had stuff come from china in a flimsy envelope crushed. I've no idea how they can justify shipping this crap internationally.
FBA from a customer standpoint is simply more predictable. I can get extremely short delivery times (most are next day where I am for some reason instead of two day).
Did they do any analysis of whether customers are willing to pay more for FBA? I wouldn't be surprised if they were. You also tend to get fewer boxes if you do FBA. I did a bunch of third party orders once for an electronics project (think 30 different small things) most were FBM and all came in separate small boxes which is ridiculous.
> Turns out it was shipping from overseas
This is by Amazon's design too.
If you use the "Buy Box" (add to cart button on the product page), it's quite difficult to see who you're buying from and from where the item ships from.
However, if you select "More offers from..." button, hidden on the page pretty well, you can see exactly where the product ships from, and expected delivery dates, as well as seller feedback ratings and number of feedbacks (giving you an idea of size of the seller).
Many of us FBM's have primary websites we sell on that make majority of our annual revenue, and our own distribution network.
Guess what? The same products we sell on Amazon are cheaper on our website - and we'll still get the product to you in 2-3 days, often with Free Shipping too. We don't have to pay Amazon fees that way, and we stand behind our company name - we're not going to screw you over in some shady way like pretend to be American but actually ship from China.
It's insane that we've spent all this money, and decades building our own fulfillment network, warehouses, and processes - but when we sell on Amazon, we're compelled to use their FBA just so we can sell enough product there to be worth our time.
The problem is I don't know your company when I buy direct from you.
I bought direct from an Instagram ad. Turns out they wanted me to wait for their next shipment despite saying "in-stock" - 2-3 months. When I said refund me they said no wait, we DO have it in stock! That is shady.
All this took lots of back and forth. I couldn't just cancel without talking to them, I had to figure out their system for submitting requests etc.
Amazon sells predictability in part. Their business accounts let me ad a GL code to my order and ties into a statement that can be paid by check within 30 days through an AP system on our side (also electronic).
I don't drink coffee but I imagine Starbucks does the same otherwise why would everyone go there?
Amazon's big risk is their marketplace and the crap in there. They should clamp down HARD there. That is getting us to consider moving business purchases elsewhere.
Sorry to hear that, you rightfully should have charged back your payment. That's a massive stick in your corner as a consumer. It's expensive for the retailer to deal with, and too many risks having their Processor close their account. It's also the reason Amazon freezes your account if you chargeback something.
Sounds like you were buying from an arbitrage seller, our more commonly called a drop shipper our crossdocker in industry terms. Basically they don't stock the products they sell. They buy goods when they sell goods, and hope you won't notice. Sometimes it works out, if their source can ship quickly... But in your case... It didn't. That's not really an online store... Unfortunately, only online reviews will be able to help you stay away from that.
I can't speak for all online stores, and certainly if your organization has an approved vendor list then things are set... But many of us are happy to accept PO's, setup NET accounts, and more. You'll also get a more personal touch with a company that cares about your business instead of you just being another number.
As an aside, take a look at Quill for office supplies. They'll treat you right.
I wonder if there could be a way to highlight this information while shopping on Amazon. Regardless of the prices, Amazon works as a huge catalog of goods. But what if there were, say, a browser extension that displayed a notification that the same seller offers the same product on another platform, but cheaper. Or even more expensive, but within a predefined range - some people might be willing to accept a small increase for the sake of undermining the Amazon monopoly.
The real trick would be to account for shipping in the calculations.
Who the heck are you that I should trust you over Amazon? What's your return policy? Refunds?
There's more to this game then you seem to think. The thing Amazon has that you're missing is customers that trust you. That's not cheap.ans easy to acquire.
Go sell it on your website with free shipping. Nobody cares.
You're shopping online, with a credit card. You don't have to trust anyone... You can't lose. That's by design of Visa, MasterCard, Amex, etc. You'll always get your money back.
So try a few online stores... There's a few you've probably heard of, Newegg, DSW, Chewy, and more. We'll earn your repeat business, otherwise you move on to some other online store.
That's how this business works.
How'd you come to trust Amazon in the first place? You tried a purchase, and were satisfied with the experience. They earned your trust just, like any store, physical or virtual.
No, that's not how it works.
People develop trust relationships with the online places they shop. They aren't trusting their credit card, they're trusting the merchant to not need to use the credit card security/safety features.
None of those stores you mentioned are anywhere near amazon or have amazon's customer service reputation.
The idea isn't "howd you come to trust amazon" but "how do you compete with amazon while they have more trust and better shipping than you."
I and everybody else dont shop at infinite places. You check the usual suspects when looking for something. You dont say "I'll take a bet I'll get this at the advertised price and shipping time because I have a credit card."
I want that thing. I dont want to fuck around with my credit card company and then order the thing from someone else.
You are mistaking the problem amazon had with the problem everyone else has - trying to compete with amazon.
The same question still applies: "How'd you come to trust Amazon?"
Initially, you didn't trust Amazon. They earned your trust somehow, no?
The same with any other company.
I highly doubt Newegg is going to throw away their entire business and reputation just to screw you out of $100.
In fact, I'd wager they take your customer relationship more seriously because they are smaller than Amazon.
Meanwhile, as evidenced in this thread and others anytime Amazon comes up... Amazon seems perfectly willing to throw away their relationship with you over $100 of counterfeit goods.
>I highly doubt Newegg is going to throw away their entire business and reputation just to screw you out of $100.
You'd be dead wrong. Newegg was bought by Liaison Interactive in 2016 and has been in steep decline since.
They lost their customer service advantage to amazon years before that.
Customer service isn't a checkbox its a series of systems and when one company does it better they win.
If you're unhappy with your purchase amazon will take it back, most of the time you won't pay shipping. Newegg doesn't enjoy the same reputation.
Amazon does have an issue with counterfeit goods I don't understand given their data driven supply chain, so I hope they can solve it soon. If not someone else will eventually figure it out do better.
The overwhelming majority of products sold on Amazon are from 3rd parties. That's where the counterfeit goods problem comes from. There's no easy solution there.
Also, we shouldn't laser focus in on just one company. Newegg was an example... and it's still the place to buy computer hardware. Their customers do enjoy free returns, and often free shipping too.
Zeroing in on just Amazon is like cutting off your nose to spite your face.
In the end, I guess we'll have to agree to disagree.
>The overwhelming majority of products sold on Amazon are from 3rd parties. That's where the counterfeit goods problem comes from. There's no easy solution there.
Amazon could figure out which 3rd parties supplied it and get them to better police their supply line.
Newegg is not "the place" to buy computer harware. and its reputation is garbage.
Yes, definitely this. I generally buy only via FBA for this reason, I don't mind paying a few dollars more to know I'll get it quickly and also have an easy return process if needed.
I forgot about the easy returns.
I'm not sure what their deal is but the local Kohl's will actually PACK and ship your stuff back to amazon - then gives you a 40% discount to the store in my case.
I just actually screwed up and bought something expensive that turned out not to be a good fit from a non amazon seller (no return). I'm going to eat the loss and buy from amazon for the next - my own fault there.
Yeah, I can vouch for this. When I care about when I get the delivery, I go out of my way to make sure the thing I'm ordering is fulfilled by Amazon.
You can buy from sellers offering FBM SFP (seller fulfilled prime) which has a 2-day guarantee and Amazon enforces it and kicks sellers out if they can't keep it.
FWIW, when we looked at fulfillment costs, FBA was more or less competitive, price wise.
When was this? FBA fees have gone up over the past few years.
And... it's more expensive than FBM if you've already got your own staff, warehouses, carrier agreements, etc... which is part of the Anti-Trust argument the article is making (being compelled to use FBA).
> The merchant alleges he could offer the same products on Amazon at lower prices and with faster, more reliable delivery if he could handle logistics himself without being penalized for late deliveries. Merchants using Amazon’s logistics services don’t face penalties for delivery mishaps, which is why many choose to use it even when better options are available, the letter states.
It would be great if someone had numbers on how often Amazon logistics are late, as compared to third party services. If their logistics are indeed much more reliable, then I can understand where their policy is coming from. If a merchant wants to use a 3rd party service that is cheaper/faster but less reliable, that does seem like something the merchant should be penalized for. It all depends on their relative rates of reliability though.
Either way, the optics certainly don't seem to favor Amazon here. They may have to restructure their pricing and penalties, to avoid the perception of bias.
In my experience, Amazon drivers will mark packages as delivered when they haven’t gotten around to delivering yet. When I call Amazon to complain, they tell me to just wait and the package will show up later.
I suspect the drivers are given an impossible number of packages to deliver, and there’s a misalignment of incentives where everyone is better off pretending they delivered the package on time. It’s not hard to imagine how this situation would arise when the delivery company is also the merchant, and there’s a command from on high for everyone to get one-day delivery. If the package is marked as delivered, everyone up the chain makes their numbers. @bezos, are you paying attention?
"In my experience, Amazon drivers will mark packages as delivered when they haven’t gotten around to delivering yet."
Packages delivered by USPS, the country's national mail carrier, are often marked as delivered 1-2 days before they are actually delivered.
The first couple of times this happened to me, I stepped outside after seeing the delivery notification from Amazon, and got worried that someone had taken the package. But now I know it's a common issue due to the way USPS collects and displays data:
I recently moved to a new apartment in a new city/state. It has one of those nice locker systems for packages. You can tell who are random contractors for Amazon deliveries based on their inability to access the room without help from apartment management.
Anecdote time. A few weeks after moving here, someone rang every single apartment buzzer one-by-one at 2:30AM. AM!! I assumed the first was a mistake. The second made me get up. By the third, I was angrily making my way to the callbox. Before I could answer, I heard my neighbor angrily screaming into the phone. Turns out, it was an Amazon delivery driver who clearly had no way to make a delivery at that hour. I suspect they did the mark as delivered “trick”.
That wasn’t the only time this happened since I moved here either. It happened again but this time at 6:00AM. I was expecting a package that day, but certainly not at that hour.
I’m not angry at those delivery drivers. Their job has unrealistic expectations and low pay. What does anger me is how Amazon is abusing the worker pool to the point where people need to behave poorly to accomplish their jobs. It’s pushing Amazon’s inability to deliver onto society. That is pushing the limits of what is acceptable to the point where I’ve recently started reconsidering purchasing from Amazon anytime I shop online.
Not saying where I learned this from, but the Amazon fulfillment services (fulfillment centers and their 1st party delivery services) have a greater than 30% month over month turnover in my region. No one taking these jobs has any intention of making a career out of it and most aren't even planning to work them for more than a couple months at most. That is exactly the kind of environment that encourages gaming the system in the way you describe because the risk of getting fired within the expected time period employment is so low that it isn't worth doing the job right.
I misread month over month as YoY. That's insane. I don't think even Uber has a lower turnover rate and drivers are independent contractors in that case.
It seems like something they could easily verify: they know the exact location of the truck when the package is marked delivered. If it doesn't correlate with the delivery address then something is up. Another clue would be a bunch of packages marked delivered at the same time that don't have tightly clustered delivery locations.
I agree with you about performance metrics being gamed, wouldn't surprise me.
I get pictures of the delivery on my front porch. I wonder if that is to prove to me that the package was delivered or to prove to Amazon that the delivery person delivered. If the photos are taken with a cell phone app/camera they will be tagged with location and time which would be pretty difficult to falsify.
I don't always get these pictures so I suspect it is Amazon spot checking their delivery people.
I was getting these for awhile on every single delivery, then they stopped. I wonder why?
I imagine the Ring acquisition has been helpful in that regard.
Amazon has GPS trackers in their cars and can tell you how far from you the delivery vehicle is. I doubt they would accept this trivial kind of cheating. Yet they seem to work their drivers to the bone.
That's just like lyft or uber drivers taggint themselves "As waiting for you" while they are still moving. A pure gamification of the system.
Complain in chat and you can get a $5 promo credit per package
Knowing amazon, this also includes support calls resolved as solved, thus good luck actually getting help on the issue.
Or they mark it as an attempted delivery for up to 2 days. Next day shipping is a lie.
> They may have to restructure their pricing and penalties, to avoid the perception of bias.
They don't need to avoid the perception of bias because they're free to run their marketplace however they want. They have absolutely no obligation to look out for anybody's interest except for their own.
But, FWIW, it totally makes sense for them to have different rules when the third party merchant fulfills orders. Amazon and merchants selling on their platform have different incentives. Amazon cares a lot about their customer experience and has an extremely long-term perspective on customer satisfaction. Many third party sellers are either 1) incompetent, or 2) actively malicious. As a result, Amazon has to structure incentives accordingly whenever they let a third party seller handle part of the customer interaction.
I really enjoy the high level of comments here generally, unless there's an article that paints a tech company in a negative light. It's the one time I can always count on a large number of apologists showing up to defend them, and I think that bias is something everyone should look withing themselves and address.
When you get as big as Amazon is, along with the cushy tax breaks and cozy relationship with government that go along with that size, your decisions and business practices need to come under closer scrutiny, the end.
On a slightly different topic, the fact that the seller said he was held to binding arbitration made me very sad. I am super excited for these bullshit "binding" arbitration clauses to get shot down in court, they need to go.
> It's the one time I can always count on a large number of apologists showing up to defend them, and I think that bias is something everyone should look withing themselves and address.
Funnily enough, I notice the same for intellectually dishonest comments that are _critical_ of big tech companies, or at least certain ones. It seems like the fact that you only notice one side of this dynamic is a bias _you_ should examine within yourself.
Amazon is nowhere near a monopoly in retail. Walmart does almost double their sales.
? neither parent nor GP said they were.
GP says, "When you get as big as Amazon is". The only scenario in which the size of a company has a bearing on which laws apply to them is if the business is a monopoly.
> The only scenario in which the size of a company has a bearing on which laws apply to them is if the business is a monopoly.
I'm sorry but this is not true. There are tons of labor laws, just to give one example, that depend on how many employees a company has.
Aren't the labor laws discriminating at a scale that is several orders of magnitude smaller than Amazon, though? The implied context in the GP is that they're talking about Amazon's size as opposed to, say, Target or Walmart.
Sure, but I was using labor laws as an example to show that there exists precedent to discriminate based on company size.
Further, GP also claims that “being a monopoly” is the only scenario in which size matters, but monopoly power is not about overall company size — it’s about market dominance. You can be a (relatively) small company and still exert complete dominance in a market, and engage in anti-competitive behavior that will attract regulatory scrutiny.
This is false. Amazon doesn't have the same rules as most companies, they have cities paying them bribes to put a headquarters in them.
Many large companies try to extract concessions from cities in this manner. Sports franchises are notorious for this, despite being much smaller than Amazon.
This has been going on since the 80s in my first hand experience. Im sure longer than that as well.
"Need to come under closer scrutiny" is not based on the exact details of current legal enforcement.
Why consider brick and mortar retail and ecommerce to be the same space? They are quite different businesses.
> they're free to run their marketplace however they want.
That's only true if they don't wield monopoly power.
Personally, I think there's a very strong argument that they do.
It would be interesting to see to what extent courts agree.
In my view, there has never been a more diverse and vibrant marketplace than online shopping. Amazon offers decent services, but whether it's shoes, or TVs, or food, there are many, many, very viable alternatives. It's very interesting to me that some folks are able to define "monopoly" in their head in a manner that captures Amazon.
I think monopoly is a bit of a misnomer here. There's certain levels of market power at which you no longer need to cut corners to make a profit, and at that point the right thing to do is pay it forward. Start treating everyone better. Amazon obviously isn't doing this, and are instead taking a more parasitic route and I think monopoly or not, people are fucking tired of the whole "legally right but ethically wrong" thing.
In what world is Amazon a monopoly in retail? Walmart does almost double their sales.
It is possible to be a retailer, and a monopoly, without being a monopoly in retail. Indeed, most determinations of monopoly power use a much narrower definition of the field they hold that power in.
For instance, Amazon holds a significant percentage of online book sales—and, in fact, of online retail sales in general; see one of the sibling comments for references.
The context is selling physical goods, in general, on Amazon, not just books.
"They don't need to avoid the perception of bias because they're free to run their marketplace however they want."
See there's two points this comment can be coming from, the first one is as a legal statement, like they don't need to do it because legally speaking there is no way that they could be forced to run their marketplace any way but the way they want, and it seems like that is what you mean - but the fact that governments exist means that nobody is really free to run their market in any way they want. There are always restrictions. And if someone were to think otherwise I would wonder what led them to think that.
The second way is as a moral viewpoint, which is what your next sentence "They have absolutely no obligation to look out for anybody's interest except for their own." also implies (as obligations are often referred to in the context of morality, while in a legal context we requirements are more often referred to - at least in the vernacular).
So which is it? Do you believe there is no way they can be legally bound as to how they run their marketplace, or is it just that you believe there is no moral obligation as to how they should run it (or ethical obligation, I actually prefer the word ethical in this case).
Both. Amazon is not a monopoly, therefore they aren't subject to any legal restrictions other than the same ones any retailer faces. And Amazon has no moral obligation to bend over backwards for third party sellers. Amazon created and nurtured the customer relationship. They should guard it fiercely.
This lawsuit is the equivalent of a consumer goods brand bitching and moaning because a supermarket imposes conditions on them if they want to get valuable shelf real estate.
This is a common misconception. Anti-competitive practices are generally outlawed, even for those that have not already acquired monopoly power.
Trying to acquire a monopoly via these practices is also not allowed.
An example in the article was Kodak. You couldn’t call them a monopoly in copiers. But they ran afoul of anticompetitive tying and lost their case.
There's numbers for Amazon logistics in the article.
More to the point, Amazon themselves use UPS/Fedex under the hood in addition to their own system. But they hold sellers responsible for using UPS/Fedex if it's late only when not using FBA.
> fewer than 25% arrived within two days; more than half arrived in about three days and more than 15% arrived in four days
Those numbers are for delivery speed. Not percentage of deliveries that are late relative to the date promised to customers when they made the purchase
Considering that it takes Amazon-level resources to get UPS/FedEx to track down errant shipments and honor claims, this seems like a fine idea at first glance.
In my personal experience, “Amazon-level logistics” is just about the least reliable way to get anything to show up on time.
In my experience, it’s the opposite. I’ve had hundreds of packages delivered by AMZL, and only one was late.
Here in Germany they are late about 30% of the time for me but at least that means I get yet another month of free prime.
If a delivery is late it is often because of how it is packaged, and not purely on the delivery service
It's much more likely that Amazon will just start to sunset the Amazon marketplace all together. In some ways they already have.
VendorExpress was an initiative designed to get rid of 3P sellers and create a direct relationship with manufacturers. It sort of worked. The 3P sellers started pretending that they were manufacturers though. They recently sunset/sunsat/sunsetted that program.
The new program, OneVendor, will give Amazon a lot more control of who sells what and how. And their new Transparency program will eliminate a lot of the middle men playing the arbitrage game all together.
It's worth noting that most of the complaints against Amazon are from middlemen, scammers and arbitrageurs who make a living as leeches. When Amazon destroys their "business", they sue. While it's true that prices on Amazon are going up that's not necessarily a bad thing. You often have a situation where a manufacturer's items are leaking out into the Amazon ecosystem through arbitrageurs. When they finally take control of their own product listings they want to raise prices to parity with the rest of retail. The arbitrageurs lose. Amazon wins. The manufacturer wins. Traditional retail wins because Amazon is no longer undercutting them so deeply. And while the customer does lose, in a sense by paying more, the customer service is greatly increased.
That's a lot of words to say "Amazon is conspiring to raise prices, benefiting manufacturers at the expense of consumers". Sounds like an antitrust violation to me.
>Transparency program will eliminate a lot of the middle men playing the arbitrage game all together.
Transparency isn't that new, over a year old by now. And it doesn't eliminate middle men since it requires the manufacturer to label all their products regardless of source.
I think the past tense form of "sunset" here should be "sunsat".
No cause the sun doesn’t sit, it sets. Ergo past tense is sunset, not sunsat.
I’m assuming you aren’t being sarcastic.
Personal experience has been that Amazon delivery estimates and deliveries are extremely unreliable.
A one-day shipping ordeal could turn into a week. A two-day shipping will arrive past its "guaranteed" day for a solid 10-20% of all packages I get. And usually that guaranteed date will suddenly change on the day of. So you're expecting, and nothing gets there.
Basically, if you want to have a guaranteed delivery time on a package, do not use Amazon.
I think this must be a consequence of where you live. I live in Santa Monica, and literally 100% of my Amazon packages have arrived on the day Amazon originally said they would. I order probably 1 item from Amazon a week on average and have lived in Santa Monica for 4 years. Thus around 200 items and I literally can't think of a time when the package arrived later than advertised at checkout except one Christmas.
My experience has been the opposite. Also, Amazon's deliveries have become extremely fast. I ordered an item at 6pm yesterday. Amazon's guaranteed delivery time was 8am this morning... and it was actually delivered at around 6am. I was blown away. The item arrived in around 12 hours, and the delivery was free since I am a Prime member. This is miles ahead of competitors!
People have come to equate Amazon with fast delivery. It's literally the only reason I use them. Often, looking at reviews, delivery time and condition are the biggest factor in bad reviews. To their credit, they usually strike these and put a note that they are responsible for logistics. That said, I don't blame them one bit for enforcing logistics onto sellers...
Amazon's logistics are fraudulent. They'll say "Can't access the building" when they never event attempt to deliver. They're gaming the metrics.
Sometimes they'll just outright lie, say the package is delivered, and it will show up in the next 48 hours.
Back when I still used them, this was why I only had things delivered to my office. If I tried to have things delivered to my home, one of two things nearly invariably happened: I'd either waste my time waiting on a delivery only to have it marked "no answer" or "can't access", or they'd leave it on the sidewalk outside my door. (I live in downtown San Francisco. You can guess how well that worked.)
But I dropped Prime a while back and stopped using them, and am still happy with that choice.
Anecdotally I've had both "delivered-not-delivered" and "office-closed-not-closed" happen at work while I'm setting in plain view of the parking lot and office.
Haven't had that issue working from home but now everything seems to come UPS or USPS; I haven't had deliveries from Amazon drivers. Not sure why.
My building has a large posted notice stating (to the amazon logistics people) that this area is monitored by and reported to Amazon’s quality dept. seems to have helped w delivery issues they were having.
> The merchant alleges he could offer the same products on Amazon at lower prices and with faster, more reliable delivery if he could handle logistics himself without being penalized for late deliveries.
I feel like this is not unexpected. If on-time delivery is non-negotiable for Amazon then that will be built into the price.
Anyone who builds anything is trying to get permission to relax one constraint in order to facilitate another.
This reminds me of an old joke:
3 businessmen are in prison, and they ask each other why each one is there.
- I'm here because my prices were lower than the other companies, so I was charged for dumping the other companies.
- I'm here because my prices were higher than my competitors, so I was charged for economic power abuse.
- Well, I'm here because my prices were equal than everyone else, so I was charged for cartel formation.
> "It accuses Amazon of “tying” its marketplace and logistics services together, an antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established."
Amazon has robust competitors in the shopping space (hello Walmart). And does not often serve niche markets. Hobby electronics (think old radio shack or current adafruit), sewing, wood screws in volume are all places where amazon falls flat and there is plenty of room for others to succeed.
What amazon is doing is brilliant, it isn't monopolistic, it is vertical integration. Something that doesn't happen as much as it once did.
>Amazon has robust competitors in the shopping space
Amazon owns 49% of US online retail. 
If 49% still allows for robust competitors, at what % does that change?
Online retail is only around 10-11% of total retail sales in the United States.
Amazon has a leg up on Walmart for online sales, but Walmart is still the number one retailer in the U.S.
> Amazon has robust competitors in the shopping space
This complaint isn't about the shopping space, it's about the selling space. Small businesses who want to sell online will typically get a whole lot of nowhere if they don't use Amazon.
I have lots of problems with Amazon (counterfeiting / inventory commingling issues, treatment of employees), but trying to standardize customer experiences by pushing sellers into their own logistics system is not one of them.
I was looking recently into how commercial real estate works. Typically when you rent out a space in a plaza, your expenses are very predictable for N years. The typical contract with the plaza owner lasts many years (could even be over a decade). This way you know you're not going to get sudden rent increases, etc. On the flip side the rate of return for the owner is also lower than normal - the risk is lower (guaranteed income for many years) and so is the return.
In that sense, one definitely should not make an analogy with a traditional marketplace. The terms you agree to when selling on the Amazon marketplace is typically orders of magnitude worse than what you'd get at a plaza - imagine Amazon committing not to raise costs for the next 5 years.
Amazon isn't a market place - it's a store. When you sell on Amazon, think of it as selling it at Walmart - you don't get to pick where Walmart will place it on the shelves, and you have no guarantee that Walmart won't drop your product altogether.
This is how 99% of people think about Amazon. Unfortunately, it's not quite correct. The Amazon.com Retail team does, in fact, operate a store. The marketplace is the behind the scenes network for third party sellers that make their catalog seem so large. Most people don't even know the second part exists, but it does. When you buy from Amazon you aren't always buying from Amazon. Sometimes you are buying from some random person that Amazon.com Retail is actually competing with. And sometimes you buy from some random person, although Amazon does the fulfillment. It gets quite convoluted.
Source without paywall: https://www.latimes.com/business/technology/story/2019-11-08...
If you guys read 'the everything store', Amazon originally let other merchants sell on the platform because Amazon could get the metrics of what sells well and copy it, and get rid of the merchant. They've been anti competitive since they started allowing merchants to take the risk and then force them out. Amazon basics is the result. Usually, but Amazon is really screwing themselves if they jack up prices as keeping prices low for consumers is really the only thing keeping them from fitting the definition of monopoly and that is what is keeping the regulators at bay. They undo that, and they make themselves a huge target.
The technology monopolies are popular because people like to have platforms. But they have a built in conflict of interest.
Decentralization technologies can help use build public platforms without the conflict of interest.
I don't sell my product on Amazon due to their outrageous terms.
I don't buy things on Amazon because it's expensive.
Maybe this matters more to giants who are nearly forced to. But it can be avoided.
As a manufacturer you have no choice. If you make a product that has even moderate distribution it will end up on Amazon. You either take control of your products on Amazon or deal with the consequences: counterfeit goods, used as new, damaged as new, bad customer service, people undercutting all other retail partners, etc.. The customer doesn't care. They will blame you.
It's kind of funny that Amazon actually has a much worse problem with all the things that kept people away from eBay.
I think they're going to have a hard time proving they were "forced" into using FBA.
My thought too. "Pushing" someone to use a service is very different from "requiring" them to use it. Amazon can also make a very strong case that FBA maximizes consumer value even if it doesn't minimize price.
I have a hard time not believing this to some degree. Amazon is incredibly big and powerful, this would be trivial for them.
They've been driving prices to rock-bottom for so long, it's pretty ironic that they get sued for trying to raise prices. Such is life.
Depends who’s prices. When Amazon corners a market with their own service they drive prices up (in the article the seller has to use Amazon Logistics). When Amazon sells your book, it’s your price, then Amazon demands that you sell through them at your lowest price, in their TOS you aren’t allowed to sell your book anywhere else for less.
Of course there is almost no resistance to their dominance because we live in a time where legislators favor large businesses (because Citizens United). Examples of a broken regulatory environment... FCC turns a blind eye to deceptive practices like Amazon’s false advertising (BuyNow button for ebooks that you don’t really buy). The patent office gives patents for trivial improvements like the OneClick purchase button, which obviously helps large businesses with big legal expense accounts. And the grand daddy of anti-competition is the ability of technology giants to spy on other businesses, Amazon, Google, Apple etc snoop via their platforms and analytics services to choke out competitive threats. How do they choke them out? They control the search engines and browsing platforms as biased referees, so they decide what we see via recommendation tweaking (which is also why the Advanced Search features in these platforms, appstores, market places, search engines, are quietly disappearing, they make it harder to skew the playing field).
Not really ironic, selling products at a loss to drive others out of business then raising prices on consumers after you have driven your competitors out of business is the definition of anti-competitive behavior.
That's retail in a nutshell though.
Not in this case. It's FBA fees that are out of line with other 3PL providers - and Amazon's punishment for sellers that do not use FBA coupled together, that make for more expensive products as sellers have to increase price to stay profitable.
That unfairly harms the consumer, which is the basis for this Anti-Trust argument.
Effectively, Amazon has built the world's largest Marketplace by losing billions and billions for years and years, turned said Marketplace into an almost necessity to sell on, decided it will also sell on said Marketplace often at unfair prices below manufacturing cost of the goods, and now has made their own Logistics Network an effective requirement for selling on the very same Marketplace.
Yeah, the FBA fees are ridiculous for small items, especially considering that Prime is supposed to be paying for the two-day shipping.
I used to sell FBA. I calculated that if the price is below about $8.50, then I will make no money - it'll all be eaten up by Amazon fees (some fees are fixed - not a percentage). If I sell at $10, I get about $1.25. Above that it's somewhat linear (e.g. sell at $20 and you pocket about $10, etc).
In my case, this wasn't a problem. I chose to get into the market specifically to sell FBA. As such, I knew cheap items were not viable for FBA, so I didn't sell cheap items on it.
Also explains why it's impossible to find virtually anything with Prime under $9ish. I order almost entirely off Aliexpress these days because I'm rarely in a hurry for anything and it's typically less than half the Amazon price for the same junk.
FYI Amazon has a program called small and light that is designed for this < $10 items if they are small.
The minimum commission fee of $1 still takes a large byte out of that though. (Commission fees being in addition to FBA fees)
That minimum commission fee is the reason you don't see anything on Amazon for below $6 (unless there's some weird accounting going on for the seller). Above $6, the fee turns into a percentage and is easier to manage.
That fee is also the reason you'll often see packs of 3 or some item when you only want 1... it's just not profitable to sell the 1 at a reasonable price anymore.
As an aside, the SNL program doesn't get all the same benefits as FBA. In some cases you don't get the Prime badge, and in other cases you're an "Add-on Item" to get free shipping for the buyer.
$.80-$1.00 per order, plus $.75 per unit, plus $.11 per ounce. You can end up paying two dollars just to put one tiny item in a box. And that's separate from the commission, as mentioned by Alupis.
Predatory pricing is a myth.
I disagree. It's been my experience that Amazon very rarely has the lowest price. They prefer to charge higher fees for listing than places like Ebay and hope people choose Amazon just due to brand recognition.
Yeah I’ve consistently found amazon to be more expensive than other online stores and even brick & mortar sometimes, at least here in Australia. They USED to be cheaper for everything, but not for a while now.
Amazon is good for the occasional sales, stuff that’s hard to find locally, or stuff I need quickly. That’s about it.
> They USED to be cheaper for everything, but not for a while now.
Yeah, and their website isn't even that good to boot (search sucks, for instance). I think they're coasting based on customer inertia and market dominance.
I think they spent many years investing in creating that image for themselves, and did so successfully enough that people have taken it as fact and no longer question it. But it's been gradually becoming less true for years. They're no longer subsidizing purchases the way they used to.
The reason they were so aggressive about forcing Prime onto people was to engineer the behavior into people of buying from Amazon by default. Rather than ask questions about where's the best place to buy.
For something I can get at Best Buy, for example, I wouldn't buy online and wait for shipping, I use their price match (if I need to) and get it same day. And often when I look up the same item at different online retailers, the price is the same or one site undercuts the other by a penny. Not a coincidence, they all have to stay competitive.
> driving prices to rock-bottom
No. They've been driving cost to rock-bottom - not price. It's margin they're after.
Their 'dynamic pricing' is the biggest issue. It's completely opaque to everyone except Amazon's algorithms that want to maximize margins/profit.
E.g. frequently items will be at some discount level one moment, but then based on some trigger (e.g. increased views) it leaps up. I've have many cases where I found an item on sale - sent the link a friend and by the time they go look (sometimes just minutes later) the price has jumped.
Look at camelcamelcamel and see the wild price graphs - and then understand that Amazon doesn't even share many of the intraday price changes with 3rd party services.
FWIW, Amazon does not do dynamic pricing for offers from 3rd party sellers.
I can't even remember the last time Amazon had the lower prices than other online retailers. The cost of "free shipping" and Amazon's fees are very much baked into the price of each item on their site.
As I read it, they are using their dominance to force sellers to use their logistics service while increasing the price sellers pay for that logistics service with threat of being de-ranked if they don't use it.
All they will say is that buyers prefer amazon logistics and will pull out some user surveys and delivery rate statistics to prove it.
I don’t see the argument. Walmart and others are sucking while Bezos is executing.
Unless Bezos crosses the line with onerous contracts not allowing manufacturers to sell with other online retailers he should be ok. Wise for Bezos to put antitrust friendly language in all contracts.
That's exactly what Amazon demands for one of its ebook programs, KDP Select (https://kdp.amazon.com/en_US/select):
When you choose to enroll your book in KDP Select, you're committing to make the digital format of that book available exclusively through KDP. During the period of exclusivity, you cannot distribute your book digitally anywhere else, including on your website, blogs, etc.
Related: If you include a link in an ePub to any other retailer, the book will be rejected by Amazon.
You can choose to not use Select, and just use standard KDP. This is an exclusivity agreement. You don't get to release your ebook elsewhere in exchange for higher royalties.
> Walmart and others are sucking while Bezos is executing
I don't know what world you're in, but Walmart is kicking ass as a company and is still posting a net profit larger than Amazon's, despite Amazon making boats of money off of AWS. At this point people prefer shopping at Walmart to Amazon.
Walmart generates $500B in revenue compared to Amazon's $230B. While you aren't wrong that Walmart is doing well, comparing net profit between companies when one is 2x the size of the other is dishonest. It's especially dishonest when guidance from Amazon was a net decrease as they invested into 1 day shipping.