God, I hate the 'no evidence this is bad for the customer' arguements. And maybe it's because I'm not a lawyer, I also think in this case it holds no water. In part because third party sellers are...
God, I hate the 'no evidence this is bad for the customer' arguements. And maybe it's because I'm not a lawyer, I also think in this case it holds no water.
In part because third party sellers are also Amazon's customers. In fact, it's argueable that they are the primary customers, and not the people purchasing the products at the end of the day.
I could also make a poorly-worded and long-winded arguement for how the end consumers are harmed by this, resulting in a worse experience and fewer choice of purchasing alternatives, even if it keeps costs lower. Not to mention the perpetual race down the quality pit that undercutting below sustainable market rates in perpetuity causes.
Part of the problem is also AWS. Having a seperate business which gives ample cash flow for market manipulation in unrelated sectors causes all sorts of problems...it's why I feel companies need to be kept on a tight leash for both horizontal and vertical integration.
Uber and Lyft being another great example of their cheaper costs to customers being a detriment to everyone in the long term, because they undermined most of the health, safety, and pay regulations that accompanied taxi fares. Notice how prices of an Uber/Lyft are now often within the ballpark of a cab once they have to start complying with these things, and they're still burning money. Uber was profitable for the first time in 2023.
If you called Amazon’s vendors “customers,” everyone would be confused. How do we even talk about the situation without using the usual words for things? Usually you can distinguish between...
If you called Amazon’s vendors “customers,” everyone would be confused. How do we even talk about the situation without using the usual words for things?
Usually you can distinguish between customers and vendors by looking at which way the money flows. Customers are paying Amazon for stuff and vendors are getting paid for providing it. But there are some exceptions like bank customers and insurance customers, where the money flows are more complicated.
Yes. They're selling marketplace listings, charge either $1 per sale OR a $40/mo subscription fee. Then they sell fulfillment services, which charge fees per cuft in storage ( about $1 off-season...
Exemplary
Does Amazon sell services to the third-party sellers?
Yes. They're selling marketplace listings, charge either $1 per sale OR a $40/mo subscription fee. Then they sell fulfillment services, which charge fees per cuft in storage ( about $1 off-season and $3 around Oct-Jan) plus a fulfillment fee per-item. Not using Amazon fulfillment means not being prime eligible, and seriously harms chances of purchase.
Plus referal fees and closing fees, which basically are just more junk fees on top of what's listed.
Then it sells ads to bump your listing over your competitors. Not doing this means getting buried to the 3rd or 4th pages of results.
The vendors are best known as B2B customers, but that doesn't mean they're not customers. It can get confusing, half the point of lawyering is to make sure the court has clear terminology for procedings. The important bit is that in the context of Amazon anti-trust, vendors are customers too, not just the consumers.
And that doesn't even get into how Amazon will detect hot-selling items from all this data and then compete directly with its own third-party sellers. That's how Amazon Basics came to be, and you'll notice it expanding over time, slowly eating into what margins are left for the third party sellers as Amazon uses them for heuristic data to determine what other markets to enter, and force the third party sellers to buy ads to compete against their first-party offerings which don't need to pay for their ad slot.
Frankly I think Amazon needs split up into huge number of companies to re-introduce proper competitiveness in all of them. Off the top of my head:
Book selling and publishing company (the OG, Barnes and Noble main competitor)
Device maker (Almost every electronics company)
Video production/streaming company (Netflix)
Online marketplace handling payment processing and listings (Ebay/Paypal competitor)
Shipping and logistics services (Fedex/USPS/UPS and B2B warehousing companies)
Cloud services provider (The usual tech giants, plus innumerable smaller players)
The idea that it's considered acceptable for one company to do all these things is absurd. And the tight integrations between them, paired with the profitability of one being able to undermine the competitors of the other, is frankly obscene.
Way back in the 90's, the talk was splitting Microsoft into 3. I listed 6 from Amazon without even trying. Heck, a fair number of Amazon's individual cloud offerings have direct competitors, and it wouldn't be completely unfair to break AWS itself into smaller chunks.
Meta thought: Wow this post is way more substantitive than the first one. Dear any anti-trust folks reading: Please consider my thoughts in your arguements, specifically listing off every single seperate company that speciallizes in a sector that Amazon uses its size to unfairly compete.
Does this mean that sellers on Ebay are just vendors too? Can you really have a vendor if you didn't ask for them, didn't vet them, haven't heard of them, and don't know what customers want from...
Customers are paying Amazon for stuff and vendors are getting paid for providing it.
Does this mean that sellers on Ebay are just vendors too?
Can you really have a vendor if you didn't ask for them, didn't vet them, haven't heard of them, and don't know what customers want from them?
In fact, IIRC before postage stamps existed, the receiver of the mail used to have to pay to receive their letter. Does that mean that all letter-mailers were vendors?
I think this is a bad heuristic, it doesn't account for platform operators and marketplaces.
They’re generally called “sellers” on Ebay, but when you buy something from one of them, aren’t they acting as a vendor as far as you’re concerned, as their customer? You’re right, though, that...
They’re generally called “sellers” on Ebay, but when you buy something from one of them, aren’t they acting as a vendor as far as you’re concerned, as their customer?
You’re right, though, that their relationship with Ebay is different. I guess Amazon is blurring the lines. Vendors can buy things, including advertising, shipping, and other services, so they would be customers in that relationship, even if they’re a vendor in a different relationship.
God, I hate the 'no evidence this is bad for the customer' arguements. And maybe it's because I'm not a lawyer, I also think in this case it holds no water.
In part because third party sellers are also Amazon's customers. In fact, it's argueable that they are the primary customers, and not the people purchasing the products at the end of the day.
I could also make a poorly-worded and long-winded arguement for how the end consumers are harmed by this, resulting in a worse experience and fewer choice of purchasing alternatives, even if it keeps costs lower. Not to mention the perpetual race down the quality pit that undercutting below sustainable market rates in perpetuity causes.
Part of the problem is also AWS. Having a seperate business which gives ample cash flow for market manipulation in unrelated sectors causes all sorts of problems...it's why I feel companies need to be kept on a tight leash for both horizontal and vertical integration.
Uber and Lyft being another great example of their cheaper costs to customers being a detriment to everyone in the long term, because they undermined most of the health, safety, and pay regulations that accompanied taxi fares. Notice how prices of an Uber/Lyft are now often within the ballpark of a cab once they have to start complying with these things, and they're still burning money. Uber was profitable for the first time in 2023.
If you called Amazon’s vendors “customers,” everyone would be confused. How do we even talk about the situation without using the usual words for things?
Usually you can distinguish between customers and vendors by looking at which way the money flows. Customers are paying Amazon for stuff and vendors are getting paid for providing it. But there are some exceptions like bank customers and insurance customers, where the money flows are more complicated.
Yes. They're selling marketplace listings, charge either $1 per sale OR a $40/mo subscription fee. Then they sell fulfillment services, which charge fees per cuft in storage ( about $1 off-season and $3 around Oct-Jan) plus a fulfillment fee per-item. Not using Amazon fulfillment means not being prime eligible, and seriously harms chances of purchase.
Plus referal fees and closing fees, which basically are just more junk fees on top of what's listed.
Then it sells ads to bump your listing over your competitors. Not doing this means getting buried to the 3rd or 4th pages of results.
The vendors are best known as B2B customers, but that doesn't mean they're not customers. It can get confusing, half the point of lawyering is to make sure the court has clear terminology for procedings. The important bit is that in the context of Amazon anti-trust, vendors are customers too, not just the consumers.
Amazon essentially gets to exploit both sets of customers against each other, fiddling with the knobs using analytics to reward whichever side is at-risk for shrinking at the moment.
And that doesn't even get into how Amazon will detect hot-selling items from all this data and then compete directly with its own third-party sellers. That's how Amazon Basics came to be, and you'll notice it expanding over time, slowly eating into what margins are left for the third party sellers as Amazon uses them for heuristic data to determine what other markets to enter, and force the third party sellers to buy ads to compete against their first-party offerings which don't need to pay for their ad slot.
Frankly I think Amazon needs split up into huge number of companies to re-introduce proper competitiveness in all of them. Off the top of my head:
The idea that it's considered acceptable for one company to do all these things is absurd. And the tight integrations between them, paired with the profitability of one being able to undermine the competitors of the other, is frankly obscene.
Way back in the 90's, the talk was splitting Microsoft into 3. I listed 6 from Amazon without even trying. Heck, a fair number of Amazon's individual cloud offerings have direct competitors, and it wouldn't be completely unfair to break AWS itself into smaller chunks.
Meta thought: Wow this post is way more substantitive than the first one. Dear any anti-trust folks reading: Please consider my thoughts in your arguements, specifically listing off every single seperate company that speciallizes in a sector that Amazon uses its size to unfairly compete.
Does this mean that sellers on Ebay are just vendors too?
Can you really have a vendor if you didn't ask for them, didn't vet them, haven't heard of them, and don't know what customers want from them?
In fact, IIRC before postage stamps existed, the receiver of the mail used to have to pay to receive their letter. Does that mean that all letter-mailers were vendors?
I think this is a bad heuristic, it doesn't account for platform operators and marketplaces.
They’re generally called “sellers” on Ebay, but when you buy something from one of them, aren’t they acting as a vendor as far as you’re concerned, as their customer?
You’re right, though, that their relationship with Ebay is different. I guess Amazon is blurring the lines. Vendors can buy things, including advertising, shipping, and other services, so they would be customers in that relationship, even if they’re a vendor in a different relationship.