Seems like commenters are misreading the lawsuit here. My first instinct after reading the top paragraphs of Stoller's post was also "so what, this seems fine," but if you read to the end and see what the suit is really alleging, it's not just a policy that punished sellers for offering discounts on their products when sold off Amazon. It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers, which is much higher than other online marketplaces and obviously less than the 0% they'd charge themselves to sell through their own site (though they'd still need to pay money to operate the site), and then punishing them if they sell somewhere else that has lower fees for a lower price.
That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. The post is still misleading in that it doesn't mean Amazon is raising prices across the board by 30-45%. But they are raising prices across the board by whatever the delta is between their fees and WalMart's fees, or some other marketplace that charges even less, minus the difference in shipping.
Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. But that doesn't happen precisely because Amazon's massive subscribed user base represents so much of the market that no can afford not to sell there, which is seemingly the definition of a monopoly and why legal intervention is called for. Lower-cost marketplaces can only compete if Amazon is not allowed to blackball sellers from access to the only customer base that matters.
> It's the fact that Amazon is charging anywhere between 30-45% in fees to the sellers
I'm glad this was stated. It is new insight for me.
I got in the habit of only buying from the actual manufacturer store on Amazon, thinking it was benefiting the company. For example: buying Bose speakers on the Amazon Bose site, instead of the bose.com. Now I realize that Bose loses a lot of money going through amazon. I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow".
The only thing I've run into is the vendor site saying out of stock, but the vendor -store- on Amazon in stock. E.g., I bought a PixHawk4 flight contgroller from HolyBro. The HolyBro site was out of stock, but Amazon's HolyBro store had it in stock. /bangs head on wall/ I understand why, it's just... weird.
> I should just be going to the bose.com store and cutting out amazon. I never really need anything I buy online "tomorrow".
That’s another point of the article. Amazon forces Bose not to sell at a lower price anywhere else. So the price you pay at Bose is also the 30-40% Prime premium that Amazon charges. Although you are right that premium goes to the manufacturer as opposed to Amazon but overall a significant loss to all customers prime or non-prime
In this specific example it’s probably the opposite. Bose is very good at locking down their supply chain to make sure no one is selling their headphones below list. They always have been. They probably imposed this restriction on Amazon even if now Amazon wants it too.
The fact that Bose has to set their retail prices to include the Amazon surcharge makes it an even better example.
If you buy the headphones at a brick and mortar store, you’re still forced to pay the Amazon shipping surcharge, even if the money is not going to Amazon. This puts brick and mortar stores at an unfair disadvantage, and it is directly traceable to Amazon’s anticompetitive behavior.
You are aware that if you buy headphones at a brick and mortar store, 30-40% of the price goes to [retail store] as well because they have warehouses, distributors, storefront rent, and staff salaries to pay right?
I disagree with Steam being wrong. It's kinda special situation where product also includes distribution on their store. So I consider justified of them having same pricing.
Now, I'm not saying that this should be apply to copies distributed via other channels. Just to those redeemable on Steam.
In this specific example. It is Bose that keep their pricing. And it is likely Bose and Amazon have deals that are not of the same percentage as other sellers. Just like Apple and Amazon's deal.
Reading the article it wasn't clear to me why exactly they couldn't sell elsewhere cheaper. That seems to be an important detail. Is there some fine print stating if you're 'caught' selling cheaper elsewhere you lose the buy button? This wasn't clear to me from the article.
What you get by shopping at Amazon isn't just the pricing, it's the convenience not to enter your details again and again and again for the sake of getting a single item. I'd love if someone could solve it and instead of 'sign up here' I'd get 'pay with superDuperSingleSolutionForAllECommerce' and it's done. Maybe I should ask for VC money and start working on it?..
The very problem that PayPal solves, and why Elon now builds rockets (and Google Pay, and Pay with Amazon, to come full circle). However, inevitably the vendor wants your details in their own database and now you're back to having to interact with their terrible UX, just with the benefit of a breach no longer exfiltrating your credit card info
That's not even mentioning the network effect, where a service has to have enough adoption or demand to "force" other merchants to accept it
I understand the vendor wants my details,I'd want it too, but the reality is that the buyer is voting for convenience and going to Amazon instead.
Paypal kind of does it,but only to a degree-I'd love wider spectrum of payment methods+ some flexibility on what the vendor can/can't do with my data,similar to how app permissions work on Android. If it's some 'local brooms and stick', they only get my address for delivery,but if it's some specialist store with fountains of knowledge,then yes,sure,send me texts,emails and so on.
Pay pal doesn’t solve the low transaction friction problem at all. They’re less convenient than entering credit card info over and over again. The last time I logged into my account, their site was half-down.
On top of that, you could fill a large book with descriptions of esoteric con jobs that only work on PayPal.
Elon builds rockets because of a well-timed exit, followed by lots of hard work and success building Tesla.
I don’t know when you last used PayPal but it is an incredibly convenient way to pay on vendor websites. I use it 75% of the time I do online shopping.
I would almost always prefer to click “pay with PayPal” than start some new account or fill in details on a given vendors site.
I would go so far as to say that if large enough retailers who already have storefronts were savvy enough, PayPal could make Amazon obsolete.
I don’t like their discovery, personally. I know I don’t represent the average shopper- but I generally know what I want before I buy it online or I am using a specialty retailer for discovery.
I too, on usps.com, on domain websites, on subscriptions, basically everywhere non-Google properties. On Google I use the card itself, because Chrome has all of my cards saved in.
Also their return policy. I recently purchased something from Amazon rather then the producer's website because they only offered a 2 week return policy plus I'd need to be responsible for the shipping.
I know how returns work with Amazon. If I buy directly, are they going to give me the run around if there's a problem?
The return policy also leads to inflated prices. Since there is (effectively) no way to dispute a buyer's return, sellers must eat the cost when it happens--and they're out fees already charged in the purchase transaction.
The result is exactly as you'd expect: the items sold by third party sellers on amazon have a large markup just to produce break-even margins. Source: my wife, who ran a business including third-party selling on Amazon for a while.
This is another hidden benefit of shopping on Amazon: they see my (egregiously long) shopping history. I'm sure they have some risk profile on me that suggests I'm not buying and returning a bunch of stuff to rip off sellers.
If I say something some pack of kids underwear is the wrong size, or a $15 LED light didn't arrive, or a pair of boots needs to get exchanged, it's dealt with in maybe 60 seconds of clicking on their site.
I bought a product from a seller on their website once, but mistakenly ordered the wrong colour. Upon reaching out to them, I was told I had to ship it back myself (at a multiple of the item's cost), or buy a new one.
Meanwhile the product was listed on Amazon for the same price. Did I also mention that when I ordered the product initially, it came from an Amazon facility? Why does the seller get to benefit from Amazon's logistics but I get stiffed on the return?
I’ve found Amazon’s return policy to be extremely unpredictable. In some cases, there’s no problem. In others, the seller says I need to pay return shipping to some random factory shipping dock in China (at a large multiple of the price I paid for the item).
Also someone you trust to intercede if things go wrong. Who knows what happens when I buy from some site I've never heard of and don't get my stuff or have problems with it. I prefer to deal with large, well-known sites for this reason.
> Isn’t this the same as “pay with PayPal/Amazon pay/etc”?
There is always the issue of how well the integration performs. It is not uncommon for merchants software to get confused in the process and ship your order to the billing address or for other things to go wrong. When that happens, you now have to deal with customer service of varying quality.
In most cases, the purchase decision is easier for me to make on Amazon than anywhere else. I've been a customer since almost the first days and while I can count a lot of minor irritations, there isn't anything better.
I’ve seen a good number of sites recently where you can pay with your Amazon account or PayPal. Also with browsers auto filling everything these days including credit card numbers, I haven’t found it too troublesome purchasing one-offs from stores online.
I entered my credit card on a small online store, they are legit, but got hacked and didn't even know. Months later I got three Netflix subscriptions and a few hundreds 'Uber Eats' billings on my credit card invoice. Got the money back but wasted a lot of energy.
Klarna does this quite well here in Sweden. Almost too well, it often loads an Iframe with my information filled in already on a checkout page of a random store, without any input from me.
The rule of thumb is simple: more middlemen equals lower share going to the person actually making the thing.
I had this revelation too when I started buying food from farmers direct and was surprised at the low prices. Its kinda obvious, when you think about it.
Eh,that's not entirely true. The farmer has to box up their produce in retail sized bits instead of shipping a truck sized load for someone else to do that. They also have to pay someone to man a store, handle returns, etc.
Same deal for online retail. You've gotta have a warehouse, someone to box orders, a website to take orsers, customer service, etc. This all costs money and Amazon has the scale to do it all a lot cheaper than you can.
Except for the fact that many of the large supermarket chains have the farmer put the vegetables into the boxes that are used in displays. Even more the farmers have to buy the boxes and are charged a rental fee. The world of supermarkets and how they deal with their suppliers is truly screwed up.
> The farmer has to box up their produce in retail sized bits instead of shipping a truck sized load for someone else to do that. They also have to pay someone to man a store, handle returns, etc.
We're able to get fresh milk from a local farm. It's (literally) sold ten steps from where it's milked, you can hear - and smell - the cows in the building.
It comes from a chilled stainless steel vessel with a spigot, you bring your own bottle and serve yourself, and as for payment processing ... there's an honesty box.
Never heard or seen that here. They still have their pickers (and butcher), they just don't have an intermediary come take it at prenegotiated prices which then sells it to some grocer, they just sell it direct in their own shop. Meat is frozen, the rest fresh and on shelves.
I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others.
Which raises an obvious asymmetry: Amazon makes no guarantee that it is not offering more favourable terms for bigger suppliers – and although mere speculation, I would be surprised if that didn’t go on, because I seem to remember traditional retailers doing similar things.
I’m not saying this is good or bad, just pointing out that with all retail there has been almost a phase transition once the supplier is a household name, and the dynamics change almost to the point where retailers would offer their products at cost price or even a loss just to make sure that their customers could buy the household name through them.
> I would be surprised if Amazon had the same non-negotiable-take-it-or-leave-it terms with Bose as it has with others.
I'm not sure what, but there's a story on lower end, too.
A lot of crap on Amazon is from no-name brands like MAKNO and TURBLEX which don't even exist outside of Amazon. If I sell $19.99 TURBLEX kitchen knives on Amazon and the $11.87 MAKNO version through AliExpress, then I've not violated the policy.
> I never really need anything I buy online "tomorrow".
Gifts generally have strict deadlines. Sadly, Amazon has stopped offering any shipping speed guarantees -- there is no longer even an option in the purchase flow. It will get there when it gets there.
They won't refund if they miss their own self-imposed shipping deadlines, either.
Prime customers get pretty much anything delivered in two days.
I still haven't figured out how they do it. I ordered two obscure oil filters, and they were delivered within a day. I think they had driver go into a local automotive store, and buy them?
Anyhoo, they were cheaper than the store price.
(I don't hate Amazon. I'm pretty amazed how effient they are. I never thought I would pay for Prime, but that MGM buy was brilliant. Local retailers need to up their game. I'm getting tired of being quoted a cheaper price online, just to pay more if I go in to buy. Automotive parts stores are notoriorious for this behavior.)
> Prime customers get pretty much anything delivered in two days.
So? That has nothing to do with my comment.
Amazon used to let you select a shipping speed! The benefit of Prime was that two-day shipping was free, not that it made anything any faster.
You can no longer do this. Amazon will tell you how long they plan to take to deliver the item. Do you want it faster than that? Suck it up. Did it, in fact, take longer? Suck it up.
In New Zealand it can easily take 2 months for packages to arrive from overseas, if at all. In Taiwan I could buy locally-produced electronics and had it delivered in less than a week, and I thought myself lucky - but overseas packages got lost twice (maybe 10% of the time) due to not having a Chinese address written on them.
The long shipping times, combined with moving house periodically to keep a low rent, mean my buying habits usually involve splurging on $$$ of online shopping once a year or two.
Asking girlfriend/parents to forward parcels from Taiwan/France delays it even more. I'm still waiting for my Christmas 2020 present: "Oh, I'll just put something else in!" Friends have been even worse: some belt clip cases would only ship to the US, and a friend there still hasn't sent them on (after buying them in 2014). Similar story with a magnetic iPhone cable from Korea (2016). I've basically given up on ever getting those parcels.
Also import fees are all over the place: on Amazon, a Sabrent Rocket Q 8TB SSD costs $1399 + $992 fees (USD) to ship to NZ. The price to Australia is $1399 + $216 fees. I could fly to Brisbane and back for cheaper than that!
Some products (e.g. MacBook Pro A1494 battery for A1398) can't even be shipped at all: OWC and iFixit won't send lithium-ion batteries overseas due to federal regulations. The third-party knockoffs that are available in NZ are faulty, and broke my logic board. Trying to get a new battery is an ongoing struggle for me, and has been since I noticed the swelling in September 2020. I can only dream of the convenience of 2 day shipping.
Amazon has completely abandoned most of the state of Montana as far as "Prime Two-Day Shipping" goes. I've fought with them for over 6 months now, I ended up getting a 125% refund of my Prime Subscription for the year. Still didn't solve anything, so they told me to email "jeff@amazon.com". I did, got a handful of "executives" who gave me the run around about COVID and shipping delays (which is all horse shit, I provided my order history where Amazon switched my shipping method to "UPS Ground" about 20 months ago, and it takes 5-6-7 days to arrive AFTER shipment. Used to be "UPS 2-Day".
They literally told me they wouldn't reply to my emails anymore. It's total crap, they are using the Prime subs of rural customers to pay for same-day delivery in the cities, and hoping we won't notice.
So, yes, it is regional, but I have not even seen the words "Prime Two-Day" on any Amazon checkout in well over a year.
- You complained to customer service about shipping speeds to a low population area
- Customer service refunds your Prime Subscription with a bonus ABOVE your purchase price
- You emailed jeff@amazon.com and got it escalated to Amazon higher-ups, who take the time to address your concerns (even if unsatisfactory)
After all of that you're upset at Amazon? What's the outcome you're expecting here? I can't even get the first thing you got in that list from any local retailer.
- Amazon Prime 2-Day Shipping delivered in 2-days almost 100% of the time from 2009-2019. My address didn't change in 2019, nothing, but the service got way way worse. I am simply asking for the delivery times to go back to what they were.
- Customer Service refunded 25% of my subscription one time, and then about a week later a sympathetic supervisor/manager reviewed my delivery history and agreed it was sub-par and gave me a 100% refund. I was very honest with him that I had already received 25%, he didn't care. This has been the only person at Amazon who has understood my issue, but he was powerless to fix it.
- The higher-ups did not try to address my issue. They tried to gaslight me into believing that I didn't have a problem. They kept going back to the "orders take time to process before shipment", which I had explained over and over again that was not my issue. Once my item ships, it takes easily twice as long as it used to arrive.
Lastly, they tried to blame the carrier (usually UPS). Which is also BS, I am able to purchase shoes from Zappos (an Amazon company, BTW), and they arrive THE NEXT DAY. When I pointed that out to them, that is when they told me they would no longer be responding to my emails. I completely understand it is more expensive to ship packages to rural America, but I'm not the one advertising "Prime 2-Day Shipping" to anywhere in the lower 48 states. I just want them to be honest with me and tell me straight-up that I'm not worth a Prime membership anymore.
> They won't refund if they miss their own self-imposed shipping deadlines
If they miss their shipping deadline, just select the return reason as defective, or item "not as described" or whatever, and it will let you return it for full refund.
Yeah but what's the alternative? Unfairly ding me instead of the business? Not sure I should be forced to accept that.
I need something by date X, Amazon says they will deliver by X-1, they actually deliver on X+2, so I buy from a physical store on X because I still need it on X, and now I have an extra item and it's not my fault.
I mean, if someone here is an Amazon manager and can convince their engineers to add an "shipping delayed" option to the list for free return reasons, I'm all for it, and I'll use it.
You didn't get dinged, you got the item you ordered. You should contact Amazon about shipping issues since they're responsible for it. Also they don't guarantee delivery dates, and it's reasonable that shipments will be delayed occasionally.
Returning for the wrong reason just creates more work while you end up with nothing, and creates waste as the returns usually end up in the trash while the seller loses money and reputation for something they can't control.
Amazon does have guaranteed delivery dates. Almost always in my experience (I live in a top 5 metro area in the US). Sometimes they provide an estimate and it will be listed as such. But anytime they say, "Delivery date: specific date", then that is a guarantee.
Often when something's delayed I end up buying from a physical store at the time I actually need it, and then have to return the Amazon-purchased, late-delivered duplicate.
In Australia, Amazon still offers strict shipping speed guarantees. For Prime members, next day delivery is free, including Saturday and Sunday delivery.
If you order before 3pm, same day delivery is available for $9.
> I should just be going to the bose.com store and cutting out amazon.
There is one significant negative with going direct, which is the fact that online stores are often hacked. Amazon has yet to be hacked (afaik) so leaving your data with Bose is a higher risk than with Amazon.
> I should just be going to the bose.com store and cutting out amazon
I'll do that if these websites will stop assaulting me with GDPR popups 5 seconds into the site and then newsletter popups 10 seconds into the site, require me to search 10 different coupon websites to find 49 fake "no coupon needed" coupons and 1 real coupon that actually gets me the same price as listed Amazon, and then requiring me to register an account with email (or in some cases $#$*& SMS verification before making a purchase, and then unsubscribe from the goddamn newsletter after making the purchase.
Until they can learn to not annoy me, I'll buy from Amazon, and they will pay the price.
Oh and also, pay for return shipping. Amazon does.
+1 the point of their algorithm not putting sellers in the buy box that offer their product elsewhere cheaper is the problem they should absolutely be ruled to stop that practice by a court. Nobody can make an argument for how that is possibly GOOD for competition and the consumer.
As a consumer, I've been !@#$%'ed a few times when I've bought from Amazon and didn't notice it was a 3rd party seller with their own shipping method. One time, I was !@#$% to the tune of a few hundred bucks.
I don't know why you're getting downvoted, this is my experience as well. It's to the point where if it doesn't ship from Amazon, I don't buy it.
The last thing I accidentally bought from a non-Amazon shipper arrived in a semi-destroyed box, inside a too-small bubble-wrap envelope, apparently shipped from someone's condominium (I guess they bought in bulk and repackaged?)
I know somebody who sells stuff at Amazon as a third-party seller. It’s a common strategy to do exactly that: find items that are selling for more than the local store, buy it from the local store and sell it on Amazon. There’s more to it for selecting which products to sell but this is basically how it works. There are people selling courses teaching these things.
It is not always that simple. Part of the arbitrage can be generic things from aliexpress bought in bulk and shipped from china over 8-10 weeks. The mark up on amazon is partly the fact that the long ship time has already been done.
I'm confused. You somehow clicked through the order summary and confirmation pages without noticing that the total included unexpected hundreds of dollars in shipping fees?
Sellers can avoid charging you import duties up front, instead saying to the logistics company that the import duties are COD. The logistics company them pays the import duties themselves as a “loan”, sends you the package, and a few weeks later you get a bill from the logistics company for 10x the import duties to pay back the principal of the “loan” + a “convenience fee.”
A few months back, my partner ordered some books from Taiwan. The books — including nominal “shipping” — were $20; the logistics provider’s bill for the “convenience” of handling our import duties for us, when the seller neglected to do so, was $40.
The worst thing is that there’s no way under an individual shipping recipient account to declare that you want to pay these fees in advance instead (such that there’s no “loan”) or to reject shipment at point of origin if the shipper tries to pull this on you. This is because the “recipient pays” logistical arrangement is intended for businesses, that do both shipping and receiving, and operate without much cash flow, to allow them to postpone the costs of receiving orders until they’ve sold (and profited on) the same goods to others. It’s supposed to be something that they buyer requests the seller to use, for their sake; not something the seller uses unilaterally. So you actually have to register as a shipper business-account to get access to the UX where you can declare that your company wants to pay import duties in advance.
Because if I don't — and especially, if I instead try to dispute the charge — I'll be severing my relationship with [big logistics provider], and so end up on a blacklist where nobody will never ever be able to send me another package through [big logistics provider] again.
Which would be especially annoying, because 99% of the time, when ordering things online, I don't get to decide — or even know in advance — what logistics provider the shipper will use to send me something.
> and a few weeks later you get a bill from the logistics company for 10x the import duties to pay back the principal of the "loan" + a "convenience fee".
So mail the bill back with a (obviously-)form letter to the effect of "I did not agree to pay this, whoever told you I would has defrauded you, feel free to send me a letter at this address if you want me to testify against them in court."?
> the "recipient pays" logistical arrangement is intended for businesses,
> It's supposed to be something that they buyer requests the seller to use, for their sake; not something the seller uses unilaterally. So you actually have to register as a shipper business-account to get access to the UX where you can declare that your company wants to pay import duties in advance.
Sounds like evidence/precedent that they're using this mechanism intentionally fraudulently, rather than out of a mistaken belief that you'd actually want that.
Oh definitely they’re using it fraudulently; but whether or not the seller defrauded the logistics provider, it’s the logistics provider that put up the import duty bond.
Legally speaking, you owe the logistics provider money separately from any contract between the logistics provider and the seller. And so the logistics provider will attempt to collect on it, up to the point of impacting your credit score.
Its similar to if you had a valet park your car, and they parked it in a pay parking lot they don’t have authorization for, and your car got ticketed/towed. The fact that the valet is in trouble, and the fact that you owe money, are independent facts.
> Legally speaking, you owe the logistics provider money separately from any contract between the logistics provider and the seller.
No you don't. A transaction occurred That was separate from your quoted price, purchase price, shipping cost, and after a period of time passed since the delivery of the product. The purchaser is not responsible for the costs incurred by other parties.
> It's similar to if you had a valet park your car, and they parked it in a pay parking lot they don’t have authorization for, and your car got ticketed/towed.
No, you're responsible for the costs. The valet is responsible for the damages. Separate things happening at separate times, resolved by separate parties.
The valet committed a tort — but you need to actually to sue them to get the money you're owed for that tort. Torts aren't criminal in the sense of the state resolving them in your favor without you doing any of the work. If you do nothing, you end up on the hook for the ticket/tow, and the valet gets away scot-free.
Even if you pursue the tort, you'll likely have to pay the towing company before you recover the damages — because those are two separate things. The judge isn't telling the towing company who to charge. The towing company gets to charge you either way; they have a contract with the lot owner saying they can bill whoever owns a car that gets towed.
When you sue for the tort, and the judge finds in your favor, the judge is just extracting the money from the other guy, to give to you, in compensation for the money you already had to pay the towing company. Because you did have to pay.
I'm my view, the argument isn't that stuff bought on Amazon shouldn't be allowed to be shipped by Amazon. It's that Amazon shouldn't be able to force sellers to set a certain price when they sell on Walmart.com .
I don't see any consumer benefit from Amazon forcing sellers to change their Walmart.com prices.
You could argue that it's good for the customer, in that the customer won't see offers that are less convenient than what is available elsewhere. In practice sellers will just update prices on the other markets.
I own a consumer goods business and sell via Amazon and traditional retailers. Amazon's 30% to 40% fee is much less than traditional retail, which starts at 50%. Amazon is where I get my best margins.
It's great that we can use this as reference for what it used to be. Presumably, this is what competition should bring in: "traditional retail sucked, so amazon comes in and takes over it by offering something better."
The same thing would still apply now too: "if sellers are able to offer their goods elsewhere for cheaper, they should be able to", instead of being forced to raise prices everywhere.
It fits with my understanding of traditional retail as pretty brutal for new entrants, taking more of a cut and putting up a much higher barrier to entry than Amazon.
Ebay may have lower fees, but Amazon is where many people go for convenience.
> Amazon is charging anywhere between 30-45% in fees to the sellers
Back in the 80s, I used to sell Datalight C and Zortech C++ through mail order distributors. I was shocked to discover they paid us about half, or even less, of what they sold it for.
But they were all like that. It's what the manufacturer has to pay for distribution.
Just try running a store, or a mail order house, without doubling what you pay for the merchandise. You'll go bust if you don't.
If a customer called us direct to buy, it was priced at about the same as what the resellers sold it for. But, of course, then we had to pay the expenses of fulfillment staff, space, etc.
Many people are outraged by this doubling of price from manufacturer to retailer, and start a business believing they can undercut the other retailers and cash in. They get a rude awakening with how much it costs to run a retailing operation. They confuse "margin" with "profit".
> Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers.
WalMart does offer lower seller fees and (at least sometimes) lower prices than Amazon. The problem for me is that those lower prices are usually on things I don't want. I've bought a few times from WalMart's online store, but more often I look for what I want there, can't find it, go to Amazon, find it quickly, and buy it there. Many other comments in this thread indicate that my experience is not atypical.
Breaking up a monopoly is not a good thing if it results in worse outcomes for us as customers. If we end up finding what we want less often, or having to pay more for it, how is that a win?
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped
The type of contract you are describing is common in many industries. They’re known as “full content agreements” in the airline industry for example, and they’re a continual source of tension between the distribution networks and travel agencies (who want these rules) and the airlines (who would like to be able to sell cheaper on their own direct channels). The same thing exists for hotels etc
I guess the question boils down to whether Amazon can be considered to have a monopoly position in the indirect distribution of the specific type of goods being considered. I imagine that might be possible for books, not sure about other goods
For online shopping for most goods under $100, and many over $100, they really do. I've seen a few balance sheets, and Amazon is usually over 80% of online sales.
Booking.com's "best price agreement", which prohibited hotels from offering lower prices on their own website, was just declared illegal by the highest German court because it's anti competitive.
Well that's good, but I sort of see it as solving the problem from the wrong end. As a consumer what I want to see is a booking site that does have the lowest price but can't charge the hotel more than a tiny fee.
All the hotel chains in the US have been offering cheaper prices conditional upon signing up for the rewards program for many years now, and it’s free and a simple check mark to become a rewards program member.
Monopoly can also be achieved by colluding (even just implicitly without formal agreement) with other similar scale companies in the same trench. It's difficult to prove.
Correct. A lot of people assume that if something doesn't seem "fair", then it must be illegal. And they assume that if a company uses it's market power in some way to benefit itself at the expense of others in the market, then this must also be illegal. This goes to the idea of viewing the world as a type of HR department where you can always appeal unfairness to some authority that will punish appropriately. Many people go through life endlessly looking for an authority figure, or manager-in-the-sky to file complaints with and make things right.
But that's not how it works, you have to actually violate some law on the books, and I'm not sure what laws against monopsony we have -- for example, Apple is ruthless in driving down prices (for itself) due to its market power, and if it forces vendors to agree to never charge Apple more than what they charge another customer, this would not be illegal, even though the end result might be vendors raising prices for everyone except Apple, and thus seeming "unfair" to everyone else forced to compete with Apple. Demanding the best possible deal is not unfair competition.
It works whatever way public sentiment wants it to work.
Most of us live in a democracy, laws aren’t black and white and can be changed on a whim with little more than a single election cycle, or interpreted by courts in any arbitrary fashion. Sure, a large company can push unfair practices to a point, and can throw lawyers at it to a point but I think some large companies fatally underestimate the danger of flouting their position; the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about. So it is absolutely in their self-interest to make sure their practices are “fair”.
Well, we don't live in a democracy, we live in a republic with various roadblocks and safeguards that make it much harder to pass laws than taking public opinion polls. There is the dreaded senate, for example, that can block laws.
So as is often the case, the legal system is quite conservative whereas people wildly claim that whatever they don't like at the moment -- whatever seems "unfair" should be illegal, and fortunately there are usually enough roadblocks to prevent that from happening.
> the US government or a pissed off Judge could shut down Amazon’s entire operation in a day if there was the political will or some scandal came about.
Nope.
Even if there are pissed off or crusading judges -- of which there are plenty -- those decisions will get appealed and overturned via the appeals process and it definately will not take one day, these cases can take a decade as they wind their way to the supreme court where they are finally turned into nothingburgers most of the time, to the constant fury of those who insist that their ever-changing moods should be encoded in law, or that a pissed off judge should be able to carve apart a company. There is a reason this has never happened in the history of the U.S. Sometimes monopolies are broken up, but you can usually count on one hand how many times that will happen in your lifetime -- I think ATT was the last time that happened, before most of the people on this site were born. And it hasn't happened since. The judicial system just doesn't have this power and laws are very slow to change, requiring much more than just a shift in public opinion.
>This goes to the idea of viewing the world as a type of HR department where you can always appeal unfairness to some authority that will punish appropriately
Pretty much in agreement with everything else, but had to note that people viewing the world that way would not have much experience with real HR departments. Maybe there is another reason for the misconception.
It is probably illegal if they have a monopoly market share. But they don't, so it probably isn't. They have a large market share, but are very very far from monopolizing the entire retail market.
It's a messy market. If they weren't paying such high fees to Amazon, they would be paying those fees to Google (Pay per click) or other marketplaces that came and went over the years (those old school price shopping websites - pricegrabber and such)
Walmart does offer a 3rd party seller market and its largely junk in comparison - however, I don't know their fees.
0% is an imaginary fee btw... It costs money to staff/warehouse/sell/distribute/ship/package - i'm willing to bet the 30-45% fee includes amazon warehouse sellers who use prime shipping...
per the post below, a company like bose knows they only make 50% if even that much selling to any retailer, if they can make 55-65% selling direct on amazon and reach the market of people who just default to amazon then they're ahead of other sellers... Prime now for a speaker company is a godesend considering UPS shipping rates and last mile for heavy items are why they depended so much on brick and mortar retail traditionally.
I don't think the system is perfect by anymeans, but Amazon is just playing in a market that was previoulsly dominated by others and a market where fixed 30-45% is much cheaper, than everyone doing payperclick and hopoing for coneversions (googles market)
> That seems like legitimately monopolistic behavior and something that is illegal and should be stopped.
IIRC they do something like it with books through Kindle Direct Publishing: you have to sell on Amazon at the lowest price available anywhere, or else they take a much bigger cut.
It will probably be argued that Amazon isn’t actually a monopoly in these areas, therefore it’s not an abuse of monopoly. I’m only half joking.
I've seen local restaurants and takeaways with (presumably) similar contracts with the food-ordering aggregators (Just Eat etc).
Some have a clear statement on the website like "10% discount for ordering by phone", others will apply a similar discount when ordering in person, or will put a 10% off coupon (must order by phone / their own website) in with every delivery.
Please explain, I thought B&M was just a discount store that purchased surplus inventory and knocked it out cheap? why would they be charging their suppliers
Hang on, there’s a B&M retail chain in the UK? I know of B&Q and H&M and M&S but not B&M. edit: never mind, yes, there’s also a B&M. UK store names, sigh.
Many of us are reading this comment and not understanding why we’re being condescended to. We read TFA and not seeing the problem and the fact that you restate the fees for Marketplace aren’t selling it any more than the article. Explain why the mere act of charging 30-45% rent is a monopoly?
By preventing sellers from offering lower prices elsewhere, they’re using their monopoly power to directly stifle competition, and also to directly raise consumer prices.
The size of the fee they charge on top of this doesn’t matter.
I thought those fees are for FBA. I don't think that service exists else where. Charging more than your competitors is not monopolistic. In fact this sentiment doesn't make any sense: how can they have competitors if they are a monopoly. If amazon made its prices lower than its competitors I'm pretty certain they'd be accused of the same thing.
The trick is to have “Amazon-exclusive” SKUs, or vice-versa: “NotAmazon-exclusive” SKUs that are ever-so-slightly different to justify a different price.
On the other hand AWS basically saved the world from economically collapsing by WFH made possible through the innovation of turn key massive distributed compute capabilities to anyone with a credit card. AWS offered GPU's in 2015, it took both Google and Microsoft 4 years to make a comparable offer.
If this is a team effort and capitalism is benefiting us as a society as intended, then the majority of people should feel better off that we had amazon here to help us through a time of need, and amazon should feel appropriately rewarded for its technological foresight.
If instead this is a war between corporations and society, then we would expect to see a huge number of people feel like amazon exploited them in a time of weakness, furthered an already bad state of wealth inequality and classism, and accrued an order of magnitude more power over everyone than they had before.
Which outcome do you think is a better reflection of reality?
The crux of the article was that you lose winning the buy offer if you sell elsewhere cheaper. Okay - so who wins the buy box? Someone who is actually offering a cheaper price, one that’s more enticing for me as the shopper?
How is that hurtful for the consumer? You’re calling that “punishment”, but in fact as a shopper I just want to see the lowest price with the fastest shipping.
The seller fee bit part isn’t relevant. Wal Mart and Target or any other site could well offer lower seller fees - in fact, they’d HAVE to undercut Amazon in order to catch up with Amazon. But that doesn’t mean Amazon has to bring their prices down. I don’t buy that.
One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service.
There is quite a bit to this article that’s disingenuous, for example -
> How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price.
If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too. But this isn’t quite true. Using hyperbole like “money laundering” also doesn’t help the case.
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy.
Again, hyperbole. The author merely brushes off the fact that these sellers don’t HAVE to sell on Amazon in the first place. Presumably, Amazon is growing because more and more sellers flock to their website. If it’s a bad deal for sellers, they can sell on other websites. The article makes a one line claim - representing it as a ground truth - that a new business HAS to sell on Amazon. So this is clearly stating that no business can survive if they only have their own store presence or sell on Amazons competitors. I don’t believe this is true (based on a very successful family business). Yes my data point is anecdotal, but if we’re saying no business can survive without the ability to sell on Amazon, then the entire article is moot - the simple reason for breaking up Amazon is that no small business can survive without Amazon.
Again, I don’t think that’s true, and the author knows that - hence, the long wordy article to come at the issue from other angles while sprinkling in hyperbole.
The person who wins the lowest price box is not the lowest price. It is the lowest price who agreed not to sell on other sites for a lower price than one Amazon.
You as the customer are being tricked.
I sell for 15 on Amazon, 10 on my own site and someone else sells the same product for 20 everywhere. Guess what price goes in the buy box. 20.00
"One other thing - as a shopper, no other shopping website comes close to Amazon’s customer service"
Where is the chat button? Where can I ask a question? Where can I let Amazon know something was wrong with the refund they sent?
>The person who wins the lowest price box is not the lowest price. It is the lowest price who agreed not to sell on other sites for a lower price than one Amazon. You as the customer are being tricked.
There's no dark pattern involved here. When the buy box doesn't show you the lowest price, you usually see something like "Available for a lower price from these sellers" or some wording like that. In my 15+ years as a Prime customer, I've seen this quite a bit where I can find a competing offer for a lower price, often though with a longer delivery time.
>Where is the chat button? Where can I ask a question? Where can I let Amazon know something was wrong with the refund they sent?
I'm going to assume you're not writing this in bad faith and that this isn't a rhetorical question. From Amazon.com, I see "Customer service" is the second link from the left just below the search box. From that page, I see a big box in the center titled "Returns and Refunds".
If you click that it asks you what product. If you select a product that was returned you can't do anything further.
I had a refund where the seller shorted me on the shipping and the refund ended up costing me money. I had no way to contact Amazon.. I would hope for the best customer service they could provide a chat button where I could address an issue like this.
Others sites have a floating chatbox ready to assist you on your purchase. The best customer service should include something similiar, I am right?
> If you click that it asks you what product. If you select a product that was returned you can't do anything further.
The chatbot has always given me an option along the lines of "I still have a question about this", which then connects me to a human. If that option weren't there, I'd simply choose another order so I could reach a human, and then explain the situation to the human.
Amazon, not putting chat button against orders is a very good example of it not being customer focused. Amazon should not be taken seriously when it claims that it's the most customer focused company on the planet.
I don't understand how losing the buy box for offering your products cheaper elsewhere can be anything but punishment. You say yourself that picking the cheapest price plus shipping is what consumers want, so how a companies pricing elsewhere relevant to a consumer buying on Amazon?
You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart.
This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up.
If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers.
> If pricing on Amazon is too high, consumers won’t buy those products at Amazon and get rid of their Prime memberships too.
How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store?
> If it’s a bad deal for sellers, they can sell on other websites.
Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL.
>You're also making the assumption that the buy box always offers the lowest price, which isn't true if Amazon are factoring non-price variables like is the manufacture undercutting Amazon on their own site. So as a seller you could be offering the lowest price with the fastest shipping, but still lose the buy box because you had the audacity to offer a better price on your own site or at Walmart.
I'm on Amazon page right now. It tells me that I can get a product the fastest with the buy box offer, or I can get a cheaper price from other "offers". And when I click that link, it shows me higher and lower prices, but the lower prices have a delivery date (actually a range, between X and Y) more than a week out.
Let me start just by saying that the offer is still shown. It's not immediately in the buy box, but as a shopper, I have access to the lower prices and can buy from a different seller. This information is not obfuscated from me or hidden through some dark pattern.
>This in turn creates a very strong incentive to sell your products everywhere for the same price, regardless of your actual costs. So your prices at Walmart and your own site go up.
>If pricing at other stores wasn't a factor in the buy box algorithm, then consumers could find lower prices else where if they wanted to. Thus allowing competitors to slowly loosen Amazon strangle hold on online retail, and reduce prices for consumers.
The incentive goes away if you don't sell on Amazon, right? Any Amazon "strangle" (your word, not mine) only exists because people choose to sell on Amazon, right?
>How can this ever happen if selling cheaper elsewhere loses you the buy box on the biggest online store?
See my previous point. Don't sell on Amazon.
>Again you're completely ignoring the size of Amazon market share here. Who is voluntarily going to give up 50%-60% of all online sales? It's a bit like US ISPs, if Comcast screws with fees stupid prices on your cable contract you can just go to a competitor right, we'll just ignore the fact the competitor is selling 2mb DSL.
I don't agree with this. Companies like Comcast are deemed monopolies because their customers don't have a choice. Just as you stated, Comcast gives me high speed broadband. But my choice is limited to Comcast, and the only competitor (if there even is one in my neighborhood) will offer 2MB DSL.
This is NOT the case with online shopping.
I can purchase an iPad from Apple, Amazon, Best Buy, and a bunch of other websites.
I can purchase my razor blades online from Target, Amazon, Gillette, etc. including several of the grocery stores in my city (who will ship them.
Yes people shop at Amazon, but it's because they choose to. I have the option of not shopping with Amazon. As a matter of fact, I bought 10 "5 Star" brand notebooks on Amazon. I saw later that Wal-Mart had them for $3 instead of $7/notebook. I sent them back to Amazon and got them from Wal-Mart instead.
With internet service, many people don't have a choice but to go with Comcast, Cox, or whichever single provider offers the service in their neighborhood.
>The incentive goes away if you don't sell on Amazon, right? Any Amazon "strangle" (your word, not mine) only exists because people choose to sell on Amazon, right?
And you can exit any monopoly of some industry by exiting the industry altogether, then know that anti-trust regulations exist despite of this.
Not selling on Amazon doesn’t mean you exit the industry. If this was the case, every retailer would have an Amazon presence, which isn’t true either. You’re merely repeating what was stated earlier.
> I don't agree with this. Companies like Comcast are deemed monopolies because their customers don't have a choice. Just as you stated, Comcast gives me high speed broadband. But my choice is limited to Comcast, and the only competitor (if there even is one in my neighborhood) will offer 2MB DSL.
> This is NOT the case with online shopping.
Does this mean that Google doesn't have monopolies, with its 90% market share in search, 70% market share in video sharing (Youtube), and 60% market share in web browsing (Chrome), just because there are alternatives available?
Google is often the default search engine across many operating systems and phones. There’s no apples to apples comparison with Amazon, and before you force this false analogy, let me clarify that you’re arguing a strawman.
Many other comments here in addition to yours fail to grasp that one doesn't have to have a literal 100% monopoly to show monopolistic behavior that leaves the customers as a whole worse off.
Like this article says, prices are increased across the board because of how Amazon acts.
Don't paint amazon subscribers as victims here. I am entirely satisfied of the time saved and the cost of Amazon products I buy.
The yelling comes from the Amazon sellers side, not from the customers.
There is plenty of competition for me to shop around, and if there are none, I'd rather buy from Amazon as I trust that they reduce the costs , fees and taxes effectively.
I would argue that the government should do less and not more. If they really want competition to grow, they could stop charging capital gains on every item a seller flip.
For example, when I was selling on Ebay, after the platform fees, the shipping fees, and the government taxes, it's just not worth it to enter the sector as a small guy.
You're kinda proving the point here. If it weren't for Amazon's behavior, you could have gotten a better/cheaper service. But you can't, as the prices are raised across the board. And the true cost is hidden from you.
The point of the lawsuit and detailed in the analysis is that ALL online purchases end up being influenced (controlled?) as a result. This creates prices that are 30-45% higher across all retailers for a given item.
That would include Amazon Prime subscribers and random internet guy buying the same thing from a different site.
If Amazon controls their own storefronts, that's one thing. When they can exert control over competitors' storefronts - or worse, all competitors' storefronts - that's a different matter.
I was a eRetailer and I often lowered my prices accordingly to be more competitive than what was proposed by Amazon.
I ended making the sale because someone did not buy at Amazon.
Nobody forced me to raise prices at all. Amazon had no control at all on my prices. The market price is what is offered and what the customer is willing to pay.
If it's too expensive, nobody buys there.
I think we both get the point, except we think in different terms about the solution. I'd rather let the market works, have a transition towards competition which will eventually come down the line (5 to 10 years) than have big government try to solve the problem by making everything worse off.
There is a subtle tipping point of negotiating leverage where an agent has the ability to influence or dictate prices for the entire ecosystem. The formal term is "market power" [0].
Say you're a vendor producing widgets for $10 each, costing $9 each to produce. 80% of your buyers prefer the buying and service experience of Amazon, for all the reasons you describe. They have no brand loyalty to you: they go to Amazon, type "widget" in the search box, and buy the first result with 4+ stars costing roughly $10.
Amazon decides out of the blue that they want $1 per sale, and what's more, they will drop you from their platform if you offer a different price on Amazon and other storefronts (be it another giant like Walmart, or your own low-traffic e-commerce website). Because this $1 is the entirety of your profit margin, your only way to stay in business is to raise the price to $11, and because your widget competitors have been given the same deal, all widgets now cost $11, and when consumers are price-shopping, they're now conditioned to see $11 as the normal price for a widget. You could opt out of Amazon entirely, but that would limit you to 20% of revenue, which is also a dealbreaker. (You theoretically get a higher cut from that 20% at the new price-point, but you also suffer the deadweight loss from buyers who can't/won't transact at that price point.)
The standard libertarian retort would be that the seller consented to their contract with Amazon, while no citizen or market actor ever signed some imaginary "social contract" with state regulators, and it's a legitimate point. But saying that a vendor whose livelihood is dependent on a presence on Amazon.com (whose revenue rivals the GDP of many nations [1]) "chose" that relationship is like saying that each citizen "chooses" the laws of the nation-state they live in, because they could have moved elsewhere. Yes, technically there is an exit clause; but in both cases the table is tilted such that exiting is deeply against the interests of each actor, thus each actor is incentivized to perpetuate the asymmetry in negotiating power.
Market competition is a great thing when it works, and many times it does. But oft it's forgot that the whole point of a competition is to win. And whether we're talking political power or economic power, concentrations of power tend to snowball and entrench.
I clearly see a path forward where competition will work.
I truly see an horrible path if government starts to put its big fingers everywhere and start causing all kinds of secondary market effects. When you look in hitory, it ALWAYS ends up being worse.
Nobody speaks about Walmart only sellers, that don't want to work with Amazon (as they are crazy with sellers).
Nobody speaks about Ebay sellers, nobody speaks about shopify only sellers. Nobody speaks about LOCAL sellers.
Those are all competitors than Amazon has no control over it.
Yes Amazon has a large distribution network, and competitor are starting to catch up from what I can see.
But anyway, what can I do other than expressing my disagreement ? I very well know we are going towards a gov intervention. I can only laugh in my corner, alone...
> I truly see an horrible path if government starts to put its big fingers everywhere and start causing all kinds of secondary market effects. When you look in hitory, it ALWAYS ends up being worse.
Source? It worked out well for the browser wars. It worked when it blocked (several) telco merger(s). And many more.
And that's just anticompetitive protections. What about the FDA and OSHA putting its fingers into the food industry so there aren't literal fingers in my food?
If you're happy, all power to you, not everyone else is. Amazon is essentially doing the same thing credit card companies did in the past. To hide their cost they are increasing everyone else's cost. Their approach primarily hurts people that DO NOT want to shop at Amazon.
They are a monopoly and are being accused of being so because their mandatory policies forbid the merchants from selling that product anywhere else cheaper than Amazon.
This means that if I buy the product from say Walmart or Target, then I am paying 25 to 35% more for it. This is because the merchant cannot list it anywhere else cheaper than they list it on Amazon.
That is a clear violation of monopoly laws and I applaud that AG for his efforts to abolish these "most favored nation" status agreements.
A putting a clause into a contract they enter into with B that B may not sell to C (competitor to A) is obviously anti-competitive. Think of the whole Intel "you can't buy AMD" clauses with OEMs.
Ive def noticed Amazon becoming more and more of rip off. I cant even find things for less than $10 anymore. There are numerous items I’ve looked into buying from them, but it’s priced at $12 on Amazon, where i could walk into a target or Wally World and get it for $5...
I haven’t found any sites where I can get cheaper small items anymore. I’m up for suggestions for other online retailers.
I wonder how long the momentum will run on this working. There’s still a lot of earned assumption that Amazon is a competitive price.
I’ll usually let a slight increase in price slide for the convenience, but I’m always looking for a reason not to use Amazon if I can - and a rip off price is a good trigger for me to be patient and get the product next week with a smaller shop.
I think this is Amazon's goal, where you're expending energy not to buy from them. You need a reason not to and then it only lasts for a short time period.
They're banking on being people's default retailer which lets them get away with this behavior.
Yes, I've also noticed that the cost of small items has gone up significantly. Amazon passing shipping costs and fees onto sellers explains this finally.
I guess it is relevant to the "Amazon is an evil and monopolistic organisation" theme.
Maybe not relevant for the lawsuit specified in the report, they are certainly entitled to sue for any reason. But the classic theme still show its nose.
On an other note, if amazon has 128 million prime subscribers and they like the service, it is something politicians need to be aware if they still want to be elected.
Not defending Amazon's behavior but the standard for government intervention in antitrust cases has for decades been how the anticompetitive behavior affects consumers, NOT other businesses/sellers.
And it's pretty clear that Amazon has led to much lower prices and a consumer surplus compared to alternatives in the market.
And for all the shit AMZN gets on HN and over social media, broadly it is still one of the most widely respected and popular companies in the US across a broad spectrum of consumers.
You can argue whether that's overall good or bad, but I'm talking about the law as it is and has been enforced vs. what people WISH the law said.
Your point might be true in small sub-markets - for example for AliBaba imports, especially those where tens of sellers all import exactly the same items at broadly similar prices.
As a general point, it's not even close to being true.
Yeah I don't think current antitrust law really covers it. I think in the next decade we'll get new versions of what a monopoly, oliogopoly, and antitrust cover as umbrella descriptors. Amazon may get even worse since Bezos is leaving soon.
For whatever reason HN seems to have a rather unhealthy obsession with Amazon that is evident in somewhat regular articles about Amazon’s dominance in the online retail space. Frankly it gets a little tiring after sometime , specially when walmart.com exists and these posts smells like some underhanded SEO type activities. Anyway hopefully HN moderators will take care of this before it becomes a tool in the hand of SEO agencies paid for by other companies.
the existence of a competitor is poor reasoning about whether or not monopolistic intention exists.
When a single entity in the market can control and set the prices for the entire market it indicates an uneven shift in market power. Amazon has such market power at the moment, and this puts them at risk of committing monopolistic behaviors.
I know how some can see it as shady or misleading, but I still prefer it. That is, I prefer having the price baked in, right in front of me...no surprises. Versus some indy site I'll think 'oh only six bucks? sure I'll try it' only to be shown it's actually closer to 20 after shipping and tax. That just wastes both our time.
Further, even if it's a hair more expensive, I'll still pay it for the no hassle returns. I recently purchased a knife I saw on Amazon, but decided to go through the seller's official site to save a couple dollars. It was not worth it, and not something I'll do again.
The number of times I’ve gone through the dance of adding to cart, inputting all my information, and then bailing when I see $57 2-day shipping ($97 for next day) and $40 for 5-7 days— it’s ridiculous.
Amazon simplifies my life. To be blunt, I don’t care about the “cost” (fiscal or otherwise).
I know you probably didn’t mean it but I still want to state it. Your personal simplification of life or the amount you personally care or not doesn’t define monopolistic behavior. The entire population may not care about something but it could be disallowed.
Modern US antitrust law is based solely on benefit to the consumer [1]. If the entire population doesn't care about something (by which I assume you mean they are not harmed by it or even benefit from it), then it's not prohibited.
The lawsuit fails to allege that Amazon is resulting in higher prices to consumers. It simply alleges that Amazon is essentially coercing all retailers to list prices with shipping included/amortized, and offer free shipping.
That is something that might be substantially harder to successfully sue under US antitrust law.
Consumers aren't paying any more. Consumers are just seeing a number with shipping prices built in.
Yeah, and I think this is fundamentally what's wrong with our anti-trust law. Trying to decide what harms the consumer is far too narrow in scope, and instead we should have some broader goals related to the promotion of markets and competition, rather than just focusing on consumers. e.g.
- competition is good in and of itself, so new entrants should not be harmed and competition should be promoted and monopoly restricted purely on the basis of promoting competition as a policy goal.
- creation of new markets should be viewed as a policy goal in and of itself. Thus if a firm impedes a burgeoning secondary market or new derived market, that impediment should be viewed as a violation of anti-trust law.
- consumer harm is also a factor, but only one of three factors.
IMO, our maniacal focus on consumption while abandoning promotion of production and healthy market competition is behind many of our economic policy blunders.
Yeah, I agree, we may have bigger fish to fry with an entire party actively trying to redefine what voting is in America. It seems like if they didn't win that there certainly must be voter fraud and more minorities voters should be disenfranchised (or enough votes thrown out by 1 party lege committees so that they win) and if they do win then clearly voter fraud was no where to be found.
Also, clearly that person makes a lot of money to not care about costs, they can afford convenience. Not everyone can, which is what makes the "I got mine, so what about everyone else?" attitude dangerous in any circumstance.
You only let Amazon simplify your life in that manner because you don't care about potential savings elsewhere.
Many of us , myself included, after filling up a prime-enabled cart then go to walmart.com or some other such e-commerce retailer and then do exactly the same process you described still to check the price against Amazon.
Many times I go with the other retailer due to cost savings.
If Amazon prices things and incorporates shipping costs in such ways that people know they must double check them against other e-commerce vendors, where does the convenience and time savings come in?
What i'm saying : You're taking for granted that your convenience comes at a cost, in most cases.
If you can go to another site, fill up the same cart and end up spending less money, doesn’t that sort of disprove the point the article is trying to make?
They put shipping quotes four screens in -- after requiring an email address -- in hopes of getting you committed and having chances to harass you to buy stuff after.
I once bought $99.80 worth of stuff on this website after seeing an advertisement for free shipping on orders $99+. It was only after getting to the final screen that I found out it was only $99.99+ so I needed to add another useless item to my cart to avoid the $10 shipping. It's not a huge deal but what's the recourse to false advertising like that? I still needed the bulk of that order so I wasn't about to cancel the order but it also wasn't nice spending more than I wanted. Is there a simple place to report violations like this?
A similar situation I've run into is an online store I buy regularly from that has free shipping over $X amount.
The item I buy normally costs over that but every once in a while they'll send a coupon that offers 15% off that literally drops the price to like $1 under that free shipping price.
So the "coupon" ends up making it more expensive in total because the free-shipping is based off the post-discount price.
I think this is the case. Otherwise, you could just input your zip and see quotes. Also, if this were hurting prices overall, then I should be able to routinely just click on `Other Sellers` and find price+shipping to be less than prime.
Usually, if it is cheaper at all, it's for a week plus delivery and only a few percent cheaper in total. Most of the time though, it's actually still more expensive.
I've also bought from sellers off of Amazon as they offered coupon codes and paypal purchases. It's not ideal, but it seems possible to get around this. I think it's easier for manufactures that sell direct than resellers though.
Many well-run ecommerce sites do let you enter a zip code and see shipping quotes. Some don't until later in the checkout process, and I'm more likely to abandon the checkout on those sites. I won't hesitate to bail at the last moment either if I don't like the final price on the deal.
We're talking about a difference of seconds in the checkout experience. It adds to the perception of convenience, but but I don't see the miniscule time savings of the Amazon experience as being worth a higher price on the same item I could get for less elsewhere.
I've wasted far more time with Amazon trying to decide if an item is legitimate, and dealing with returns of broken, counterfeit, or misrepresented goods, than I have saved in their checkout experience.
> Even more frequent is that reviews for several different products are all bundled together.
I can't stand that. This doesn't matter if the product comes in various colors or something that would not change the product at all from one to the next, but then you also have things with computers with different options like video cards, memory configurations, cpu type, etc. That makes it VERY hard to find a review for the specific machine you ordered because it shows the reviews for all possible configurations.
It should show reviews only for the specific configuration chosen.
I stopped paying any attention to reviews on Amazon when I noticed that the item being described in some reviews had nothing at all to do with the one currently in the listing (something more like trash can vs curtain rod, not different sizes, configurations, or colors). Once I noticed this, it seemed really common, which means only a review which explicitly describes the item entirely could possibly be relevant, and then I have to worry if the seller laundered the item to enter "verified purchase" reviews... so reviews on Amazon are now a worthless waste of space.
I've started adding to my reviews "I purchased the N-pack of color frobbing widget with feature ..." for exactly this reason. It's gotten really bad. Recently saw one which was a water filter assembly that was formerly a totally different kind of plumbing fitting (single part, nothing to screw up).
> It should show reviews only for the specific configuration chosen.
Here is how to do that.
First, make sure you've selected the product variation you want. Then:
1. Click the "nnn ratings" link at the top of the product page to go to the "Customer reviews" section.
2. On the left is a list of the percentages of each star number. Click any of them.
3. Now you have a page with a row of drop-down lists at the top. One of them will be something like "All formats". Change it to "Show only reviews for Style:" listing the product variation you selected at the beginning. You can also change the "n star only" back to "All stars", or "All positive" or "All critical".
They could make this easier to find! But once you know how to get there it's pretty useful.
Amazon is no longer trustworthy. You can't buy something and feel confident you'll get what you ordered. Sure, MOST of the time you will, but it only takes 1-2 fakes to really shake the trust.
Just looking for an item and finding 15 of the same one at wildly different price with different description really makes you scratch your head. What's the difference, is there one?
Then the killer for me is how they mix inventory from sellers. It doesn't matter how much I trust a certain vendor, what I buy may not be their inventory anyway, so a single bad apple can mess it up for everyone.
Ultra small anecdote, but funny to see how stupid it can go.
Bought some windex, didn't pay much attention to price, 10$, because it was amazon, I assumed the price was for a concentrated solution. Turns out it was the normal kind (3$) but the seller put this price and it landed in the search results quite high.
The benefits of lower prices online can also mean you spending more time checking things.
I think it has become easier to buy bottom barrel stuff on Amazon for sure, but with a little price comparison with known good brands, fake spotter, and common sense, I'm pleased with about 95% of my purchases there and if not it goes right back and I get my money back.
I noticed that smaller cheaper items tend to have more inflated prices. It actually makes sense, from a business perspective.
A lot of things I used to buy on Amazon are much cheaper at local discount stores (Bi-mart, dollar store, etc.)
The shipping timelines from Amazon have become increasingly unreliable and non transparent. If it’s going to take a little longer that’s fine if I know about it ahead of time, but about 10% of my orders get unanticipa mid ship time delays now.
I’ve only used Amazon Basics for keyboards, wired mice, batteries, and hdmi cables. The keyboard/mouse are basically best-in-class for budget items imho.
I’m honestly not sure about the batteries or hdmi cables. But my appreciation for the brand makes me wonder about your own experience.
AmazonBasics is very hit and miss. Some of it is cheap crap. Some of it is made by best-in-class manufacturers and just labelled as “AmazonBasics” and sold more cheaply.
Kirkland Signature is reliably great, especially in comparison with other store brands. I’m a bit of a Costco fanboy though, in full transparency.
My partner and I used to argue over who gets to make the monthly Costco run but now we just make it into a big family outing (Friday evenings are an amazing time to shop there).
I don't really have complaints about store brands in general, I think the quality I see is par for the course for non-high-end brand-name items, especially for non-food items (where some are better than brand name or white labels of popular brands, but the average quality seems lower).
I have had good experiences with Amazon Basics and Amazon's clothing brands.
Around here (Ontario, Canada), Loblaws "President's Choice" and Metro "Irresistibles" are good. Both chains have a lower tier of branding, "No Name" for the former and "Selection" for the latter. Agreed that Costco's "Kirkland Signature" is reliably OK.
This isn't so much a "all print on demand suffers from quality issues" but rather "the quality of the print on demand services is often an exercise in cost cutting."
I am certain that there are POD material that are as good as the traditional book print (and there are certainly non POD that employ similar cost cutting), but rather that in general, there is more investment in quality on the larger runs of a paperback book.
I remember reading several years ago about a major independent bookstore that got one of those high quality POD systems, and also installed computers for customers to use to go on Amazon to search for books and to read reviews.
The customer could find the book they wanted on Amazon, purchase it for the same price or less via the bookstore's POD service, go have a snack and drink at the bookstore's cafe, and their book would be ready when they are done with that.
The bookstore essentially turned Amazon into a free book research services for the bookstore's customers.
> We can print millions of titles (including Google Books) that are in the public domain, as well as thousand of publisher-permission titles right to order!
The selection isn't quite the "anything that Amazon has."
> Public domain Google Books are the scanned collections of a number of libraries, including the Harvard University Library, and they may contain notations, other marks, and scanning errors. Harvard Book Store makes no representation or warranty as to the content of Google Books, and Google Books are non-returnable.
They're also not edited to fit the page well, nor with much care for typography or anything else. "Rivers" all over the place, weird page breaks, various formatting errors commonly creeping in. Page numbers in e.g. an index may not match the page numbers in the book. All kinds of problems, at least with public-domain print-on-demand, which books are surely purchased more often by accident (i.e. not realizing you're buying POD junk) than on purpose, since they're usually not meaningfully cheaper than Dover or Modern Library or whatever, and even Dover puts out a much better product. They exist to trick unwary shoppers and gift-buyers. They're basically scams, in that they're relying on buyers' mistakes to make money.
> They're also not edited to fit the page well, nor with much care for typography or anything else.
What does any of this have to do with printing? Those are formatting and typesetting issues. For the same final PDF it shouldn't matter how it's printed.
I think posters are talking (posting?) past one another here. There's the technology of print-on-demand, which can be fine, but then there's the reality of the quality level of a typical print-on-demand book on Amazon, which is not fine and is largely used to enable scammy overpriced selling of unedited Project Gutenberg texts to unwary shoppers, low-effort piracy, and letting self-publishing authors have a printed-copy option that's not really been formatted well for print (this is aside from any copy-editing issues, which crop up regardless of the format). IOW it's usually, at best, a bad product, and at worst an actual guy-selling-fake-and-stolen-Rolexes-on-the-street-corner hustle.
I only bought one (by mistake, not knowing), which had pretty bad print quality compared to a proper four-color offset or high-end digital print. Also bad paper quality. This seems to be common.
For me, Amazon used to be a bit like going to a mid-tier department store. Items were curated and higher-quality than, say, dollar store or clearance items and there was a certain level of trust with them as a retailer. I would buy something from a known brand and enjoy it, and rarely do a return. Customer service reps were a phone call away and I could google the model number and see other people's experiences with it as well.
Now I'm seeing so many sponsored results to brands I've never heard of and seemingly only exist for drop-shipping or rebranding some OEM product. Worse, the non-sponsored results would also be no name brands, where I'd gravitate towards the ones with high reviews. Then I buy the product and see a little gift card I could monetize if I was to review the product with 5 stars, so seemingly most of those reviews are fraudulent. Worse again, the quality on this product is below, sometimes even way below, a normal brand I could get retail locally but priced about the same. I must return 1/4 of the products I buy because of poor QC or later breakage from normal, if not, light use. Support or customer service for these brands is almost non-existent too and this brand will disappear in a year anyway, so why bother trying to build any sort of reputation. Amazon is always happy to do a return so it solves that problem, but its a still a big hassle and I'm sure the carbon footprint of all these returns is scary. Then I'm playing random OEM roulette again with a similar product that will also have fraud reviews and 5 star review coupons inside of it.
I also dislike the dark pattern format of the site, which shows sponosered results in very small text and puts it in between related items. I'm not sure what Amazon's Choice really is, but its almost never a product or brand that I would consider trustworthy and I imagine is just a product that is giving Amazon good margins. In a curated department store model, recommended items would be actually recommended by staff and taste-makers at the cost or benefit of the reputation of the store. If Macy's is recommending a Braun coffeemaker, then its probably going to be a good coffeemaker as Macy's wants to please me as a Macy's customer. If Amazon recommends one, its just going to be some in-house rebrand or random OEM brand with lots of suspicious reviews (tons of 5 stars but also tons of 1 stars, with not much in the middle) and with positive reviews being either "amazing i love it!!!" or referring to an entirely different product (bots?) and negative reviews being in competent English and verbose and detailed about all the things wrong with this product.
I think like with any capitalist endeavor, without proper oversight and regulation, it naturally falls into a race to the bottom and "low road" capitalist outcomes. Amazon has been left more or less alone by legislators and its, of course, gone as bad as it can and I imagine will only get worse over time. Amazon moving from the department store model to the random street bazaar model is good for the bottom line but every year it gets harder to shop there as no-name brands with no support and fake reviews dominate its marketplace.
The problem is the marketplace. Amazon was great when they were an online retailer. The marketplace has brought in vast amounts of garbage, and now ads for that garbage.
The regulation you mention will probably only make it much worse. It is being advocated for by the third party sellers that are making in a bad experience in the first place. I don't want to see them at all, much less give them more prominence.
The vast majority of no-name brands on Amazon I've purchased from (with good reviews) also turned out to be great.
I'm absolutely in love with a A$70 pair of wireless bluetooth headphones, that are more comfortable, have longer battery life, and sound just as good as my A$300 Bose QCs.
Those who don’t like what Amazon is doing have many other choices. The correct “oversight and regulation” is customers migrating to those who offer better, not financially disinterested third parties compelling financial consequences without consent.
I would direct you to the article which makes the case that not selling on Amazon is not really an option due to their customer base and the fact that they use their monopoly position to penalize you for selling on a marketplace with lower fees, causing all prices to go up, even on other marketplaces. Simply reminding everyone that people can vote with their wallets/feet is an exercise in substituting the complexities of the real world with the ideals of free market proponents. The public cannot be expected to make short term aggregate decisions against their own personal benefit for the collective long-term benefit. That's pretty much the entire point of regulation.
Also "go shop elsewhere" doesn't really work when all my favorite small shops are forever shutdown because they can't compete with Amazon. Amazon's real competition is other mega-websites like it, with very similar problems, like walmart.com or target.com. Anti-regulation types simply dont realize how much of the problem the are, which I find a bit depressing.
Also have to factor that Amazon's customer service is fantastic.
That's the hidden cost in using something else: How is their customer service? How much hassle are they going to give me to return an item? How much does it cost me to return an item?
> Also have to factor that Amazon's customer service is fantastic.
I only need their great customer service because of the poor quality products they are shipping. With other retailers, I don't know how good their customer service is because I almost never need to utilize them.
I ordered a monitor from Newegg that I needed for work, so time was important:
- Delivery time was like a week longer than they claimed.
- When it arrived it had a dead (red) pixel.
- Their customer support told me that dead pixels below a ridiculous amount (8 or so) do not qualify for a refund/replacement and told me to reach out to the manufacturer (overseas) for warranty replacement on a brand new item.
- Eventually I was able to return it under the regular "I no longer want this item" policy, but I had to pay a substantial restocking/returns fee (~20% of the price).
A quick search confirmed that this was very common with monitors and other items like GPUs have even more dissatisfaction/delayed shipping/shady practices.
Sure, I've had a couple of issues with late deliveries or broken products with Prime, but they've always corrected their error eventually. Returns and product issues are highly asymmetrical, where mostly you don't need it but when you do it's really important.
For expensive items, Amazon is 100% worth the peace of mind in case something goes wrong. For anything cheaper, I'm assuming I won't get help and I'll just have to eat the cost (which is ok, but of course not ideal). Not saying this could never happen with Amazon, but the risk seems a lot lower to me.
My counter is that I've been ordering from Newegg for almost 20 years. I've had a few defective items, and never had trouble returning them (no restocking fees either). They've often shipped me replacements even prior to my returning the item.
(I buy only from Newegg, not 3rd party folks selling on the Newegg platform).
My counter is that their dead pixels monitors policy is explicit and seems clearly and universally applied, so if you buy a monitor from Amazon and you get some dead pixels, you are SOL.
Newegg screwed me over on a monitor too. I think they're one of those brands that used to be good but has started trading that goodwill for increased profit.
I think for the typical consumer, most time spent on Amazon support are shipping mistakes. I didn't get it, the quantity is wrong, or in some cases, I got too many. Their support is fantastic on all accounts... they've never even hinted or accused me of being dishonest. If I get something later that was already refunded...they just tell you to keep it. That small gesture goes a long way, to me.
If you get junk from Amazon, just send it back. No support needed.
That's fair to say it's standard, but then I'd say the standard is fantastic.
Not long ago I ordered 4 pair of sunglasses from a small outfit online. Only 2 arrived. Support took a few days to get back to me, then asking for pics of what I got, the box, etc. I don't think that was unfair of them to ask and I provided all that, but it's a stark contrast to 'yeah here's your money back' in 5 minutes, no questions asked.
I once had a seller (site was ran on BigCommerce or something) accuse me of lying about a defective item, and threatening to publish my name and full address on the website as a 'fraudster' unless I took down the 1 star review that I left on Trustpilot.
The matter was resolved with a refund when I forwarded the email threat they sent me to a couple relevant blogs/reviewers.
No, even more modern stores, especially as it relates to online, are just starting to be better at it.
I've still seen where I have to pay shipping to send it back... which you know I can understand the cost of things... but also Amazon doesn't do this, and it's really nice. You don't have to even think about it.
We've had groceries accidentally shipped to the wrong address (our shipping address is different from where we live b/c the building contracts a 3rd party to deal with packages).
They either refund the order or send out a new delivery (mind you the other products are already delivered elsewhere and will eventually even make it to us... just with dead cold items), no questions asked.
It's things like this that make it much more comfortable to buy from Amazon than other places, as much as I would like to buy direct or from a smaller shop, etc.
This is true. I don't trust Amazon's products to be the best, but their return policy & customer service is miles ahead of any competition. I've tried buying from non-Amazon places recently, but their shipping (and even returns process) is so bad I prefer buying from Amazon.
Amazon delivers stuff to my place for "free" and very fast. They also make returning things as painless as possible since I don't even need to re-package my item when dropping off at UPS. It's easy to underestimate the hassle (from other merchants) of re-packaging your items and possibly paying for return shipping.
The customer service of my credit card company accepting a charge back is better than Amazon's. If the customer service of <no name vendor> is terrible the remedy is simple.
monopoly? walmart costco canadian tyre london drugs ikea are all huge retailers with billions that are trying to provide online platforms like and none of them come close. bestbuy and wayfair are the only comparable one imho and they still kinda suck compared to amazon
I still don't get Walmart. So much fiscal might, so much capability to expand into full, well thought out, competitive online experience, yet they're barely competitive.
It's almost like the Walmart family thinks this online thing is a fad, and growth/sales spiraling downward will turn around any day now, just you wait and see!
I don't want to say too much specifically...but I think whoever is responsible managing their entire 'online thing' is doing a poor job. No offense meant to anyone who works there.
I spoke a while informally to someone who worked there. Sounded like a really smart person, and they were describing in detail how their team was writing this 'thing' from scratch, where thing is something numerous rock solid, fast, open source alternatives exist. Didn't seem like a good use of resources -at all- considering the sorry state of their web experience.
Their whole online / app experience is a bit baffling, given the amount of revenue flowing through it. Search is terrible, inventory management is worse. Several times I've scanned a barcode of a pallet of things for a price check, only to get "No inventory in stock." Can't even get a hypothetical in-stock or online price. Other janky stuff I forget.
Lowes' website is a trainwreck, just Inspect Page it... for starters there's "todo" comments.
Home depot's experience is fantastic.
But if you wanna see the reigning champ of "online thing," www.mcmaster.com
No jest at all. Depot and McMaster I'm quite happy with. Pardon the pun, McMaster-Carr is a masterclass in UX. I've always been amazed at how well their search works, how responsive and un-glitchy the site is. How you can have a cart while not logged in, then log in without a redirect or even a refresh or rerender. Exact same state, you're just now in a logged-in state. I don't know of many ecommerce sites that do that as seamlessly.
It's also been this way for years. They were ahead of the game even back then.
Amazon is definitely the dominant online retailer, but there's serious competition from Walmart, some competition from ebay, offline competition, and niche competition. It's not even close to Google search market share.
The main reason Amazon has kicked the crap out of their competitors is that they built a multi-billion dollar fulfillment platform that is better than anything out there.
Whatever degree of effect that building shipping costs into pricing has given them is negligible in comparison. And it is dead simple for even small retailers to do this with most e-Commerce tools including Shopify.
That's great, for you. The suit isn't alleging that raising the price to pay for free shipping is illegal. The suit is about controlling the market and hiking up the price to pay for your free shipping across the market.
Ie, it's fine that a retailer charges $15 + free shipping, instead of $10 + $5 shipping. It's not fine to them force the price on all other retailers to sell at a minimum of $15. Especially not since they probably have to charge shipping.
The argument that this violates anti trust is because it raises the prices for everyone, not just the people who are fine with hasslefree free shipping
I can rank items by price plus shipping (and filter out stuff I need to wait to arrive from China) for all eBay's inventory, not just some subset of it which they do the fulfilment for.
You have proposed a strawman. What does this have to with Amazon forcing sellers to use Amazon's warehousing and logistics service and ensuring that sellers can’t sell through a different store or even through their own site with a lower price.
There were a lot of basically scams for a while where because people trust amazon so much, they buy amazon. So sellers would take something that sells for $99, and sell it on amazon for $199 or sometimes for even more ($299 etc).
In the short run amazon makes more money (commission on the sale) but in the long run this hurts Amazon's brand.
I manage an amazon business account where this is a particularly bad issue because buyers are not spending their own money. They will literally spend $500 on something that is $50, because they like Amazon's reliability around delivery, the purchasing is very smooth, returns are smooth etc. I feel like they cracked down on this maybe 4-5 years ago? But still stuff slips through.
So yes, I very much like that they don't allow sellers to mark up crazily on Amazon's site.
Yes, the whole drop-shipping scam that get-rich-quick types were pushing on instagram had to do with buying merchandise at market price then marking it up for sale on Amazon. Amazon seems to be using many more third-part merchants and pricing, which was originally a great deal on AMZN, has become more of a buyer-beware thing. Amazon is no longer necessarily the best price for merchandise.
Yeah, I think that's the thing that's missing from the narrative in this article - if certain goods on Amazon are really heavily marked up compared to other sites, it's better for Amazon's long-term reputation if people don't don't automatically buy from Amazon and maybe get them from other sites because of the reputational damage when those people realize they got screwed, and so Amazon have an incentive not to add a default buy box button under those circumstances. (Usually this seems to happen with in-demand items that are out of stock from Amazon themselves, and the sellers that aren't allowed in the buy box are third party ones. So basically, it mainly screws over canny middlemen who hope to resell things bought at retail elsewhere at a big markup, maybe even literally getting them shipped direct from places like Walmart to the purchaser.)
> They will literally spend $500 on something that is $50, because they like Amazon's reliability around delivery, the purchasing is very smooth, returns are smooth etc.
I tried to avoid Amazon a couple times, to give other stores a change and all. Wasn't that great, and it was more expensive.
Bought something on Best Buy, thought about returning it. On the product page and invoice, didn't say the date I could return. It only said the return periods where on a FAQ. FAQ didn't have a specific category for that product. I thought it was something (with 30 day), but when tried to return it, got a 'no' because it was 14 days. Why not add how many days in the product page? Why not show me the exact date on my order details?
Also tried the same with books, buying on Indigo. Bought an extra book to get free shipping. The price of the books where already a dollar or 2 higher than Amazon. 10 days delivery, and one of the books has some marks like someone put a paper over the book and scribbled on it. Never had a problem with Amazon, and it's cheaper and delivery is like 2 days.
I certainly didn't intend to do that. It's hard to write a comment addressing an entire article, but perhaps I should have quoted the tagline specifically. I was only rambling on about the 'trick of free shipping', not so much the bad practices mentioned.
As far as using AMZ logistics, that makes complete sense. I've come to expect a high standard from items I buy from them regarding when I'll get the item. If that starts varying wildly...well what's the point of Prime? Fast delivery is AMZ's entire schtick.
The price fixing I can't defend or make an argument about.
I agree. When I buy through Amazon Prime, I can safely buy with one click because I can see the exact price I will be charged and, usually, the exact day it will arrive. For next day delivery, I can't recall they have ever missed the date.
It's logical that they add the cost of shipping to the item price, but their cost must be much lower than alternative sellers, as it is hardly noticeable on low-cost items, and comparable to prices charged by Walmart, etc. who charge extra for shipping.
> For next day delivery, I can't recall they have ever missed the date.
This depends a lot on where you are (or at least, it did). I canceled Prime a couple of years ago, because among other things, I hardly ever got things on time, whether it was next day or two day.
I don't really use Amazon much anymore. I go out of my way to find other retailers whenever I can.
Amazon stopped having the best pricing long ago, but their real advantage is convenience. Everything is fast, easy, and straightforward - and that's worth the premium (if any).
Wondering what the overlap is between people who share this opinion that having shipping price included is convenient, but do not want sales tax included in the price.
Indeed. And with “normal” shipping fees, customers have an incentive to make one big order rather than many small ones, which is more economical and more ecological, I’d think.
I don't know why we're even comparing to other sites though, this issue is about Amazon without Prime vs with Prime.
The same item, if you look at it logged out, will show 15$ + 8$ shipping, but when logged in will show 23$ free shipping with a nice big Prime logo next to it. That's the issue at play, not what some other sites do. This is plain misleading and deceptive.
Can you post proof of that? It doesn't make sense, because they do free shipping over x dollars, I think 25. So you're claiming it would be cheaper to buy 2 if you weren't a prime member, which isn't the case.
Editing to add: I didn't intend this to say your comment isn't true. Perhaps I'm looking at something else or understanding wrong, so asking in earnest.
Hmm, I can't seem to find these anymore, but I definitely remember seeing these. So I'm either losing my mind, or Amazon recently (in the past year) changed this. You are right though that it would be strange for purchasing more than 1.
Thinking about it more, maybe it was duty fees (since I'm in Canada and some items from from the US). That would make more sense as those would scale with the items maybe? I specifically recall though seeing X + Y$ on non-Prime and then Z$ on Prime.
Prices on Amazon are adjusted REALLY fast. I always add a few things to my cart so I can see if the price drops, and there's always some change in at least a few items.
Also, as you mention, if some items are sent from the US, they might not be sold by Amazon, so they'll show you the cheapest option, but as it becomes available or not in different sellers, the price will differ.
You can try to open a product at the same time on a logged/not logged account and see if there's a difference. But you need to do that at the same time.
"Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main claim from Racine comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon."
This was the missing piece for me. Would like to see more specifics about how Amazon does this.
I came here to say the same thing. That seems to be the key point of their argument and it's glossed over in two sentences. Unless Amazon is punitively punishing sellers who sell off site cheaper, it doesn't seem like there's much there.
They mentioned the "algorithm" which seems to imply this isn't an agreement entered into by the seller. Is Amazon crawling other market places to check seller prices against their site? Couldn't sellers circumvent this by using a different name?
This allegation is put forth without any supporting evidence and, considering the amount of crummy things sellers do on Amazon already, it seems trivial to circumvent.
> Is Amazon crawling other market places to check seller prices against their site?
I didn't sell directly on Amazon for long enough to find out, but from talking to other merchants, I understand that they were/are doing this.
IMO, even if the merchants enter into those terms willingly, it's still anticompetitive. Amazon is effectively creating a protectionist trade zone like the British used to enact in the 1760s and 1770s. The merchants enter into it because the alternative is "don't trade with a huge portion of the market" and also maybe face predatory attacks from Amazon-friendly merchants.
The reason Amazon can charge so much for its fulfillment services is that it often delivers the product next day.
I run a print-on-demand company, dropshipping for merchants. For me to deliver a product next day (or even two-day) costs many tens of dollars. The fact that I can buy a $7.95 item on Amazon and have it profitably delivered in a day or two is absolutely incredible. It should be lauded, not punished.
I see an Amazon delivery van most days in my area, making several deliveries. The marginal cost of delivering an additional order to my neighborhood should be very low.
Same for the other stages of delivery. They've already got something set up to move large amounts of goods between their warehouses to where the delivery vans are loaded. The marginal cost of one more item should be low.
When they have that kind of distribution/delivery infrastructure set up and essentially providing an almost continuous delivery pipeline, I'm not sure it makes a lot of sense to ask whether or not an individual item was profitable.
They definitely don't make any money on it, but I'm not sure I'd call it a loss leader, but more of a 'loss at the expense of keeping customers on Amazon.'
That is, if Amazon didn't offer it, I may check out Walmart or Overstock or somewhere else, and find other things at good prices.
I was debating that. I always considered a loss leader as something to get you into a store to buy more expensive things. This is similar I guess...but I don't think it's identical because it isn't about getting you to buy more things(at that moment). More about getting you to not check out competitors. Perhaps it still applies.
They'll deliver something, but I'm not so sure it'll be worth $7.95.
I don't even trust Amazon for buying books any more. Of the last batch I bought, about 30% have blotchy, blurry font, making me suspect they're knock-offs printed from imaging the original. Often it's the same imprint but one book has crisp clean lettering and the next has varying fuzzy blur around every letter.
> The reason Amazon can charge so much for its fulfillment services is that it often delivers the product next day.
Except I never asked for everything to cost more in exchange for getting it next day.
Imagine if everything cost $20 more but all came with next-hour shipping. That's a miracle of logistics but it's a terrible consumer experience. And forcing that price onto people should definitely be punished.
I haven't had the ability get next day shipping for a while. Anymore my order won't even ship for a few days. A little over a year ago next day or 2 day was the norm.
My friend broke his phone on the way to office, ordered a new one from Amazon when he arrived at office (8am), and left with a new phone at 5pm. Can't beat Amazon shipping.
Hard to imagine they (bureaucrats drawing up the regs) didn't see that coming. I'm guessing they did, but saying they enacted legislation to protect small sellers was their real goal.
>Amazon founder Jeff Bezos knew that the number one pain point for online buyers is shipping
I disagree. I can't speak for everyone, but for me I want to know the full price of something as soon as possible. Most online/mail order retailers used "shipping" as an opportunity to milk customers for a few more dollars as the amount charged really didn't reflect how much it cost to ship an item.
Customers are well aware today that "free shipping" just means "shipping included". I think this is one thing Amazon has pioneered that is actually GREAT for customers. I would rather see a law passed that makes it illegal to add more fees than the first price you see (after choosing a non-specific shipping location). It'd still be legal to subtract from that to combine on shipping of multiple items, but never add.
You're effectively asking for the government to legislate screwing over customers.
Yes, shipping can be used as an opportunity to milk customers for a few extra dollars. Let's flip it and build it into the price of the item. You buy two of these items. The seller ships them together; there's a few cents in cost due to extra weight, but otherwise, they're pocketing that extra $X the 2nd item had set aside for shipping.
Upfront priced shipping literally only and exclusively benefits the consumer when you buy one thing (or, if the seller is an idiot and ships one item per box, which never happens). And even then, it doesn't benefit the customer more than backside-calculated shipping, its just slightly more convenient.
My Etsy shop makes hundreds of dollars just on this oddity in consumer behavior; that they're more likely to buy something if it has free shipping, so we'll just tack on $4 to the price of each item. A consumer comes along and buys three things; they just paid $12 for "shipping". We put them all in one box, pay USPS $3.50, and pocket the remaining ~$8.
I also think stores should have to add in sales tax, and all other fees, into the price you see. I know some entities are exempt from sales tax, but they are the exception and it can be subtracted off for them. But there's no reason not to have tax included in the original price in a retail store, it's actually extra work to not include it.
No, because they are incentivized not to. The point is customers are willing to pay for hidden fees otherwise online stores wouldn’t separate things out.
It’s the same reason airlines added all those fees, people prefer to minimize sticker shock rather than minimize actual costs.
Customers don't want that, they don't have a choice in the matter.
The reason fees, taxes, shipping, handling, and everything else are hidden is because that's how retailers compete with each other on price.
They hide the true cost from the customer and make them jump through hoops to determine the actual price. By the time you've provided all of your information to determine the final price, it's easier to complete the sale than go elsewhere.
If customers had all of that information up front they could compare prices between retailers easily.
When has anyone ever said "gee I'm sure glad Comcast hid those $25 in equipment rental fees and regulatory fees from me so I could avoid sticker shock"
Whether a concessions stand includes the tax in the listed price depends very heavily on the particular stand in question. Very few do. The overwhelming majority don't. For example, the concessions stands at my local movie theaters (representing 3 of the 4 major chains), and the 9 local professionals sports teams, do not include sales tax in the listed price. Sales tax is levied separately.
In many cases, that is because local law requires the sales tax to be listed separately on the receipt. (For example, in GST and GET jurisdictions, the tax charge must be broken out separately to be passed on to the customer.)
However, if the price you see is the price you pay and it's a round number, that concessions stand probably isn't bothering to collect sales tax at all. A lot of times that's because they sell items that are not subject to sales tax alongside items that are, and don't bother to keep track of the separate buckets.
For an example of why they wouldn't: cold prepared foods can be taxed differently from hot prepared foods; packaged items are taxed differently from prepared foods; foods prepared on-site can be taxed differently from freshly-prepared foods prepared at another location; a food that includes a particular ingredient may be subject to sales tax but that same food without the ingredient may not be, etc. A large concessions stand, like the kind you would find at a baseball stadium, has the resources to figure this out. The mom-and-pop stand does not.
Having worked on systems that vendors use to ship products, there's a reason it's called "shipping and handling." The shipping cost is usually calculated immediately via an API from the shipping company. The handling cost is whatever you want to tack on after shipping is calculated.
You know, in Santiago, near where I lived there was a kiosk owner making, no joke, a million USD a year, in Chile of all places, just because he had a killer location. I knew the guy, I think his name was CG or similar, I never saw the name in print, and he was a pretty solid guy but he knew exactly how much to charge for the convenience. Now it is pretty convenient, but finally someone put up a shop close by, explicitly to compete with CG, and he undercuts him a lot.
I feel like college economics classes teach you a version of perfect competition (like kiosks in Santiago) that is what I would call "hyper-lubricated." Profits lead to competitors instantly, without any friction or delay. You can't raise your prices long enough to profit. And that's not real, many businesspersons can raise prices and profit from it for a period of several years thanks to this friction. But eventually people figure out you're giving them a bad deal in a way they can't forgive.
That happened to me with Amazon. They sold me some fake shit, not much fake shit, not expensive, but that was it, after all that bluster about how I'd never do business with a company that did x or y, I found out x and y consist specifically of selling counterfeits.
It's amazing how writing with a certain tone can totally change how people would react to basic facts. Not that Stoller doesn't manipulate basic facts anyway. The A brief word on numbers is hilarious given his preceding paragraph.
I do agree that Amazon shouldn't be allowed to force sellers to price match on Amazon, though.
When I search for cheap carabiner's on Amazon I notice that my former purchase no longer shows up on amazon search, even though it is prime, and offers great price+product characteristics: https://www.amazon.com/gp/product/B016CMFESW
This pattern seems to be showing up more and more. Maybe it's just that the FBA marketplace is flooded with too many choices, but my "best" often seems to be not searchable any more.
In the carabiner example I present, there are plenty of tiny carabiners or those with weird shapes, or expensive ones. Just not low cost, non-tiny, normal shaped carabiners
Amazon founder Jeff Bezos knew that the number one pain point for online buyers is shipping - one third of shoppers abandon their carts when they see shipping charges.
I'll wager this is due to sites that won't let shoppers see shipping charges until they get to the end of checkout.
Withholding shipping info after payment is processed? That would be illegal. All Shopify sites will show it to you after entering your address and before payment. It’s hardly a reason to not shop at small business.
> sites will show it to you after entering your address and before payment. It’s hardly a reason to not shop at small business.
This is more complicated than you suggest. It's done to create consent for marketing emails. You can't see shipping costs without signing up for marketing email.
I think you're extending too much credit to many of these sites, who purposefully sequence a shipping estimate after four screens (to boost perceived sunk costs and committment) and after requiring your email address (so they can spam you in the future).
I've definitively not bought something from sites that didn't offer me the "complexity" of that user experience, and insisted I enjoy the "simpler" user experience of entering an email address, shipping address etc. pp. before getting told what this would cost me.
The sunk-cost focus of just getting people to pay for a membership to something and then they care about getting the most out of their membership… that would be an issue on its own, though not massively distorting.
The rest of the behind-the-scenes stuff is appalling.
I fear that doing anything about this relies mainly on bad experiences. The harder it is to find a good product or the more commonly a low-quality knock-off makes people unhappy, the more they will actually listen to these other complaints about all the problems with Amazon. If Amazon can figure out how to keep customers having mostly positive experiences of finding things they want and being happy with them, it will be very difficult to get the public support needed to push back on all the problems.
Lousy bread and boring circuses make it much easier to build movements for change. Artisan bread and excellent circuses really are probably enough to keep people from wanting to rock the boat (sorry for the mixed metaphor).
Sellers compete for the "buy box", inflating prices through Amazon requirements. That seems fair enough, but why then are the "other sellers" never cheaper, at least in my experience? While the buy box might have the costs of shipping and FBA baked in, the other options don't yet they're universally a worse deal all in. More often than not they're the "gimmicky" types of deals where the base price is "less", but the shipping is absurd.
Conditions like "don't sell cheaper elsewhere" are gross across the board, but the fundamental point doesn't seem valid.
> Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main claim from Racine comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
>Amazon has between a half and three quarters of all customers online, so not being able to sell on Amazon is a nonstarter for brands and merchants. As a result, to keep selling on Amazon, merchants are forced to inflate their prices everywhere, with the 35-45% commission baked into the consumer price regardless of whether they are selling through Amazon.
[...]
> Amazon also uses its bazooka of cash from Prime members paying high consumer prices, laundered through third party sellers, to distort industries across the economy. Amazon spent some of it to build out a Hollywood studio, offering its original content ‘free’ to Prime members, who are of course indirectly paying for it with higher consumer prices. Prime also offers free video games and millions of songs. But none of this is actually free, it’s paid for by Prime members in ways that Amazon disguises with its coercive arrangements.
Screams monopoly. I think if the regulators and courts are just they'll sunder Amazon's "flywheel" and force them to deal honestly.
Only mentioned a few times here, but I think Amazon's "moat" is actually their customer service.
It's the only reason I'm still strongly with them.
I'd pay higher prices elsewhere for "local" or "indie" or whatever ... but have been stung so many times that I return to Amazon.
I'm p!ssed off about that, as I recognise Amazon as the monopoly, but don't take kindly either to get ripped off elsewhere.
Personally, yes, a monopoly is in the house. But the rest of retail has to up their game.
If Amazon get broken up, which causes their prices to rise, which helps competition. That competition will still need to "customer serve" as well as Amazon for me to consider them.
Good lawsuit, but stupid article. It’s good practice that Amazon is incorporating the shipping price into the listed price of the product instead of charging it separately. On the other hand the practice of policing the prices that sellers charge for products outside the Amazon platform is certainly anti-competitive and should be slapped down by the courts.
> Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
How exactly does Amazon achieve this? How can they tell that CheapGoods4u on Amazon is the same seller as BargainStuff4Less over on Walmart?
If they can't tell the sellers are the same company, they can't punish one for selling cheaper on another platform.
This sort of reads to me like Amazon have mastered the last mile that people really care about and are charging a premium for sellers to leverage their last mile solution. I just don’t see how this constitutes a monopoly when you have tons of other options out there. Walmart, Target, Wayfair, Shopify all are competing.
I did read the article and I don’t see it. Just because the author says it, doesn’t mean it’s true. The fact that he calls this money laundering is totally suspect.
Creating a market by attracting customers with something they want and charging rent in the market is no more a monopoly in the digital world than it is in the real world. It’s like saying the mall can’t put free rollercoaster rides inside because then the stores that rent retail space would have to pay more and then pass that cost onto the customer and that inflates the price of goods. Would those stores spread the costs of that operation into the rest of their business, absolutely. Is there something wrong with that, nope.
The original idea with prime (for the consumer) was that they would get free two day shipping. Amazon already had free shipping for Amazon sold items starting at like $25 total (is it 35 now?) but back then it could take 3-7 days to arrive.
I can't claim to know the average amount of orders but it is not that hard to meet the hurdle for free 'standard' shipping and (pre-covid) most deliveries now are already in a two to three day window.
Think it will be difficult to prove that the existence of Prime actually inflates the price of goods, net net, absent Prime.
No, it was free two-day shipping with cheap one-day, but that has morphed a bit over time, as sometimes stuff is eligible for free one-day shipping or is eligible for same-day delivery, if you buy at least $35. Also sometimes it takes longer than two days.
Their normal ship time was up to 7 days in the past, and even using their non-prime shipping today that is still true.
> sometimes stuff is eligible for free one-day shipping or is eligible for same-day delivery, if you buy at least $35
Even cheap items alone on an order are often available same/next in many markets -- it has to do with where the inventory is and how they're going to get it to your home.
They have to pass a law preventing marketplaces from mandating prices on other marketplaces - this is straight out consumer hurting uncompetitive behaviour 101% when coupled with large market makers - governments are supposed to deal with this shit in the interest of consumers.
Unfortunately, the Supreme Court recently ruled in favour of American Express, saying businesses are not allowed to pass higher charges of accepting AmEx to consumers with a surcharge. (AmEx's agreement forbids merchants from charging a surcharge).
While not directly analogous, the Supreme Court believes that agreements by duo/tri-poly players mandating businesses charging specific prices (or the lack thereof), don't cause consumer harm.
I have some products on Amazon and hate paying the "Amazon tax". So, I often use Amazon as a way to look for a company that sells a product I want and then try to buy direct from that company. Most of the companies are thankful for me doing it.
I like that approach but I'm concerned: Doesn't this also increase the chances of being scammed? With Amazon, you atleast have a decent customer service if the product you got was damaged or something.
Amazon’s scale makes it unlikely that we will ever see a true competitor in this space and that sucks. Imagine how quickly the site would iterate on both quality of listings and overall UI/UX with a decent competitor. Or am I mistaken and there’s one or two other everything-stores out there that has an international presence? (Amazon.de for folks in Germany for example).
Lots of people from Czechia use alza.cz for purchasing electronics and computer stuff. Surprisingly it also ships to many Europe countries and have English site at https://www.alzashop.com/ . It doesn't list as huge variety of items but offers quite nice filtering, categorization, reviews, etc. I personally use it more often than Amazon. What forces people to use Amazon? Laziness? There are also price comparison websites which people can use to compare sellers... I never really understood why so many people buy through Amazon.
Important considerations. Also regarding the power of scale, I think people are happy to go straight to Amazon instead of shopping around because they're confident the price they get is going to be at least as good as anyone else.
So consider my proposal to add to the lexicon of common market regulations: Same Price for All. You can't charge one customer any different unit price than another. (You can add a flat transaction/processing cost and maybe price-proportional fraud-insurance fee.) Volume, customer non grata, negotiated deals...nothing changes the advertised price.
Believe me, I'm one of the most laissez-faire people you're going to meet. But I think this ends up being healthy for all for the same reasons that other anti-monopoly laws do.
You can see this play out in India where most large brick and mortar retailers offer to match the online prices that amazon charges (for most products).
Amazon has the same bully-ish behavior in India through its own sellers. I dealt with one of these - cloudtail - to list our products online. (There are at least two such "preferred" entities). As a pre-requisite for listing, they force you into selling your products to cloudtail at a much deeper discount than any of our other offline sellers get. And if you are "caught" selling the product cheaper than amazon anywhere they will ship all unsold inventory back and charge you a penalty. We eventually chose not to sell on amazon and set up our own online storefront, fulfilled by our existing offline sellers.
Have been an Amazon customer since 1996. Have signed up for Prime dozens of times -- for the free trials. I have never paid for it. I would never pay for it. Seems like a ripoff. In the early days they would warn you: if you end the trial you will never be allowed back into Prime. Heh. Then they would send you emails begging you to try it out again. So I would. Used it for "free" shipping. Over the years they added lots of other stuff like the movies/tv shows but the picture quality was lousy and they rarely if ever offered multichannel 5.1 audio. Another reason I have never paid for it.
I noticed that years ago (2009-2011) you used to be able to buy used textbooks for dirt cheap on Amazon. Like, if new the book fetched $120 or so, there'd be a handful of used copies for $15-25. But nowadays, the best case scenario is to find a used copy for $65-80.
I mean, I can imagine this situation is driven by Amazon's largest resellers more than anything -- if they spot a cheap copy of, say, Stewart's calculus, they just buy it and resell for triple the cost.
It's a bummer though -- Amazon used to be excellent for finding deals like that. Now I have to scour several different sites to find them.
After thinking about my own behavior I wanted to install an extension that would give me alternatives to amazon when buying something there. I didn't find anything that seemed to be popular/available in Germany.
The bit afterwards about high-priced hearing aids that doesn’t mention Costco kind of undermined my trust in this author to explain the state of retail business.
Costco sells hearing aids significantly cheaper than most audiologists. You can see some prices here: [1].
You do lose some things. There are store-brand hearing aids that are equivalent to some popular brands but missing a few features, and you don’t get a 30-day trial period.
I tried buying through them but went with Kaiser since service is better and I had insurance that would pay the extra cost.
Let's believe Amazon is able to find seller's selling their products elsewhere and ensure they're not selling it any cheaper thus forcing them to raise prices everywhere. Ignore the PR nightmare for a second as a result of people finding this out. I'd like to argue it may not be as bad as it looks at first glance.
The scale at which Amazon operates at improves many aspects of the online shopping as a whole for every consumer even if not on Amazon. For example the shipping efficiencies resulted from FBA have distribution centers close to consumers, moving products much more efficiency across the country than if there were many small e-commerce stores each doing it their own way causing massive friction. The true cost wouldn't be apparent in the later case since the added friction would seem just normal and part of life as there wouldn't be anything as efficient as Amazon to compare it to.
There are other inefficiencies that would result in having competing online stores on various platforms making it harder to find a product at a reasonable price without spending more time searching various stores and truly understanding the offered price after all the fakeries of promotions, cash-backs, pay later but with insane interest that we won't disclose to you at the times of purchase, hidden subscriptions fees instead of a one time payment and other scams used to be employed by numerous online stores before the days of Amazon.
The cost of products sold to run a successful operation like amazon must be very close to the real cost that those products should be sold at when taking into account the shipping costs, supply logistics, cost of warehouse operations, etc. any devision from that by increasing prices and people see you as a monopolistic evil and your days are numbered, any lower than that and you wouldn't be able to scale as fast as economically possible.
People always complain about Amazon but I started using them when I could not find anything I needed at the local stores. The shopping landscape changed before I started buying on Amazon. When Amazon started two day shipping in my town it sure made it easier to change my habits. CVS drug store is a great example of a store that used to be great hat went to crap. But not because of Amazon because of short term profits and mergers. The electronic store is gone not because of Amazon but because people don't buy hobby stuff like they used to and the owner died. The mom and pop stores that are still around from way back are here because of good business practices and people like them. I don't want to go to CVS and wait in line for 30 minutes, have to enter my phone number to get the discount and then get 6 feet of receipt full of stupid coupons I won't use. Yes you need to do your research before buying on Amazon but in the store you need to check the prices too.
For whoever considers using Amazon for convenience I say open your eyes. The lower prices and free shipping will disappear as soon as competition is driven out of business.
Also working for Amazon seems to be a dystopian adventure [0] and [ ..]..
There is no free shipping, or handling, or warehouse space, or tax compliance, or network backhaul, or HVAC. But I expect a retailer to amortize all that stuff and give me a single number they're willing to stand behind.
The issue isn’t exactly inflating prices, it’s aggressively punishing sellers for lowering their prices elsewhere where shipping is not included
> Those sellers are effectively saying that Amazon dictates what happens on shopping sites all over the internet, and in doing so makes products more expensive for all of us.
I would have liked more detail on how this process works. Amazon can't very well punish Store A for the actions of undetectably-identically-owned Store B. Yet somehow the "Buy Box" has some magic way of detecting that? Maybe Amazon just has really good investigators, and they've made it clear that when they catch you, you're dead, and they'll deny the retribution by blaming opaque "Buy Box" algorithms.
I cancelled my prime last year mainly bc their "Guaranteed Free 2 Day Shipping" actually meant "2-6 Day Shipping with a Guaranteed Apology Email if Late". Not to mention their prices not being better than many other places online.
I feel like amazon has gotten much less user friendly in the past few years. Although I can filter by "prime" that doesn't seem to actually tell me anything in particular about the delivery date. And I can't narrow it any further. They clearly have the data on what things are one day, two day etc but presumably it's not profitable to let people filter on it. You also can't search for exact terms anymore, the way literally every basic search engine lets you. So you have to read through a bunch of vaguely related items even if you know exactly what you want
I have been a Prime member for many years. I've noticed that while I used to get everything in 2 days or less, now, even after the virus thing is waning, a lot of stuff is taking 4-5 days, though it still says it is Amazon Prime shipping.
I think this is also due to cementing their monopoly power. Now that everyone is addicted to Amazon, myself included, they can use lower-cost shipping whenever they want and don't have to ship everything in 2 days, thus increase their margins.
I have up reading the article when the author compared fees for selling on eBay to FBA. It's a ridiculous comparison. A close family member sells using FBA and I nearly followed them into this as a side hustle. The fees are are high because you get to leverage Amazon's warehouse storage and delivery infrastructure. It's really astonishing what that gives you if you have a good product idea. It's worked out great for my family member.
I tend to analyze memes on Reddit and see what effect it have on real life (prior to the boys, HBO show). One frequently recurrent is the one where Drake refuse a item for 10 dollars plus 2 dollars shipping and accepts a 12 dollars product with free shipping. Seems most people prefer it this way. It's only logical for Amazon to do that (they probably have a deeper data analysis that confirms the meme).
The $12 dollar item is better though because if you do a return you get the item price back.
Also you the problem with the meme is that consumers have been trained to mentally adjust prices higher than $2 for shipping. The cheapest non-envelope mail is like $6.99.
Racine is the U.S. Attorney for Washington, D.C. As a U.S. Attorney, he has the authority to enforce Federal law. His is a unique position. All other U.S. Attorneys are appointed by the President via the Attorney General. He's an elected official.
(This comes from the unique status of Washington, D.C. as a creature of Congress, and the law that gives D.C. some self-governing power. D.C. was run directly by Congress until the 1970s, and residents could not vote for anything. Racine considered prosecuting Trump after the Jan. 6 riots. He could have done that and Trump could not have fired him.)
I always take this into account given that they are more often than not not the cheapest online -- of course the extra expense is for shipping. shipping costs money. especially if you want it on your doorstep tomorrow. do other people not see this?
Let’s see. If Amazon is forced to do as proposed - separate Amazon Prime from free shipping by third party sellers, what’s to stop Amazon from just bringing more products in house as “shipped and sold by Amazon” and making third party seller products even less attractive? How does that help third party retailers?
I already filter product lists based on whether they are eligible for Prime.
The second question is when did poor little Walmart need help competing against Amazon? Walmart failed because of execution not because of a “monopoly” and definitely not because they don’t have the money to go against Amazon.
Walmart hasn't died yet. They'll be hanging around, presumably along with Alibaba and other Chinese firms, for whenever Amazon screws up badly enough to get broken up/subjected to consent decrees/etc.
That’s exactly the point. It’s not evil Amazon that had some magical power to crush Walmart - a company that has been around forever. It’s the incompetence of Walmart, Target, etc.
It's not about free shipping. It's about the ability to ship a large product (e.g. a washing machine) often, and at no cost, to a very large number of people. The cost for this is still low, but it's growing fast.
The cost is high though. Amazon is already much lower quality than they were 10 years ago.
it's called marketing 101, offer something as free but include it in the price this making the customer feel like they're getting something for nothing...
But this doesn’t make sense. Sure in some vague sense I’m paying for the shipping but in my area the total price, everything included, on Amazon is cheaper then other online retailers before shipping and about 10-20% cheaper then brick-and-mortar stores.
I’ve stopped buying anything other than food at my local grocery store because it’s cheaper to have Amazon ship it to my door then to pick it up off the shelf.
The impact of Amazon's market distorting power is somewhat overstated here, as the 30-45% includes FBA. Walmart has a comparable service, WFS, which looks competitive, but it's not always cheaper and can cost more than FBA (https://www.helium10.com/blog/walmart-wfs-fees-vs-amazon-fba)
Of course that doesn't mean Amazon won't inflate FBA rates and squeeze sellers further, but it seems like currently the issue is about higher (non-FBA) seller fees forcing higher prices on competing services with lower seller fees because of Amazon's most favored nation clause. Unfortunately, Stoller doesn't break this down with enough detail to get a good understanding of its impact. In fact, this is pretty misleading:
"Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers."
Sellers will always have shipping and fulfillment costs, whether or not they use the in house service, so the real consequence seems to be over the fee portion Stoller quotes as 5-10%, and it's unclear how much more this is relative to Amazon's competitors. Amazon's behavior is still anticompetitive, but MFNs aren't rare or illegal, and they're typically enforced by a business with more market power over its competitors (how else could you get someone to agree!).
TLDR; It seems clear that Amazon is inflating market prices, but not to the degree Stoller suggests, and I suspect it will be a much more difficult case to make for the same reason. IANAL.
(I have to admit I was maybe a little too annoyed at Stoller's devotion to repeating essentially: "DID YOU KNOW THAT FREE SHIPPING ISN'T REALLY FREE GUYS??? But maybe everyone else didn't find it as patronizing.)
For you youngins out there, here's a phrase you may have never heard: "Please allow 6-8 weeks for delivery". Keep in mind that Amazon singlehandedly made that a cliche of the past. They're still that good, even if they disappoint in some ways.
Every time I've called up the hotel directly and ask for a discount they say no, and tell me to use booking.com if it has a better price. After a few tries I've stopped doing it and just go with whatever booking shows online.
Only complete, utter idiots believe in free anything that is not coming from the dollars they spend on the item, or their premium membership fees.
The complete, utter idiot is a strawman model of the common person. (Quite literally, since a shirt stuffed with straw is a complete idiot.)
E.g. the last time I entered into a mortgage, I was supposed to get free lawyer fees as a gift from the bank. Oops, that little offer was pulled right off the table when I informed the bank I'm going for a cheaper variable-rate mortgage.
That's a really nasty example of "free": you pay tens of thousands of dollars more in interest over the lifetime of the mortgage because you didn't have to pay a $600-something out-of-pocket expense at the outset.
That said, though the shipping may not actually be free, it seems fair to say that Amazon is competitive in that area.
> To most consumers, Prime looks like a lovely convenience offering free shipping, and it’s hard to find better prices elsewhere. But the reason you can’t find better prices isn’t because Amazon sells stuff cheap, but because it forces everyone else to sell stuff at higher prices.
How does Amazon force "everyone else" to sell stuff at higher prices? If Amazon offers some $50 item with no-additional-charge shipping, how does that raise the price elsewhere? If someone wants to match Amazon, they have to also sell that item for $50, which may appear to raise the price. But they also have to provide no-additional-charge shipping, the same as Amazon. If it's $50 with $15 shipping, the business goes to Amazon.
If we accept the premise that Amazon is a leader in cheap and fast shipping, it follows that Amazon exerts pressure on everyone else to cheapen and speed up their shipping.
The author's premise seems to be that shipping is actually cost-free with other online venues, and so they just jack up their prices to the Amazon level, and then put the shipping portion of that straight into their pockets that Amazon would have applied toward the costs of shipping. How ever does Amazon complete with all these other venues that just teleport items to your door using pennies' worth of energy?
That seems like legitimately monopolistic behavior and something that is illegal and should be stopped. The post is still misleading in that it doesn't mean Amazon is raising prices across the board by 30-45%. But they are raising prices across the board by whatever the delta is between their fees and WalMart's fees, or some other marketplace that charges even less, minus the difference in shipping.
Normally, market forces would solve this problem without any need for legal intervention, because some other marketplace like WalMart can just offer lower seller fees and attract all the sellers. But that doesn't happen precisely because Amazon's massive subscribed user base represents so much of the market that no can afford not to sell there, which is seemingly the definition of a monopoly and why legal intervention is called for. Lower-cost marketplaces can only compete if Amazon is not allowed to blackball sellers from access to the only customer base that matters.