The govt is not looking for a breakup
In letâs make things weird, amazon has responded on their blog. This is the same blog that encouraged sellers to contact their representatives to support a bill to harm sellers help amazon I believe.
AWS is simple; itâs a separate business now anyway. Marketplace can be a platform company that hosts the retail site, sells advertising, etc. Logistics/FBA can collect Prime fees and run two day shipping and warehouses; there are plenty of third party warehouses already that function in a similar manner. Amazon Retail can be a retailer that pays all the same fees that 3P sellers pay and has no great advantage with regard to search positions, advertising, logistics, etc. It would force them to sell are normal markup or close and the other segments are the sources of revenue anyway, so they would all likely be very profitable businesses that could compete independently in their respective markets.
Regrettably, we donât have the ability to comment on that response.
Well, Amazon is pointing out the parts of the argument that theyâre correct about. They absolutely have the right to not promote a listing they feel is uncompetitive, the problem is the fact that they intimidate sellers into thinking they may get suspended or something if they have lower prices off Amazon.
This is the problem right here, they directly threaten to suspend sellers for having lower prices off Amazon.
And having Amazon.com offers competing with 3P sellers on the same listing is again, a great thing (versus the mess that is ebay where thereâs 100 listings for identical products), the problem is Amazon.com offers using inside 3P seller data to compete against them. Amazon routinely demands invoices from sellers, and while they state you can redact pricing data, I would say most people donât out of fear of getting a forged document suspension for modifying the invoice (and even if you redact prices it still gives away supplier information). You canât tell me out of the millions of invoices they collect that none of them have ever been used by Amazon.com Retail to compete against a 3P seller.
âIf we see pricing practices that harms consumer trustâ does not mean lower prices.
We have hundreds of cases over the years and have never had any such belief, nor have we ever had issues redacting pricing.
Why would they need them. If they are competing they simply reverse engineer their buying price.
Lots of speculation and jumping to conclusions without any evidence whatsoever. I agree Amazon is a sociopathic greed machine, but I prefer to make assertions based on evidence. Many slippery slopes in your assertions.
I assert Amazon has enough market data, they can get the same outcome without invoice information.
What does AWS have to do with the core issue in your assertion? We donât make as much money on our real estate ventures, therefore I should create new companies for them, losing our tax advantages? Makes no sense. McDonalds is in the real estate business through franchising, should they be broken up and be a franchise sellers separate from their profitable real holdings? I think not. We operate a net loss on our recycling operations, but it provides a service to the community and is good for marketing to our dealers, should we be punished and split up for subsidizing that venture? No.
We use segments of our profit to try new things like packaging, marketing, and other avenues to try and increase market share. I donât see how AWS profitability is unfair to a seller, subsidized or not.
What I am reading in your assertion is Amazon is unfair because of economies of scale, not the actual specific un-competitive actions like the buy box algorithm leaning toward FBA, or the intentional ignorance of seller support, arbitration requirements, etc.
I applaud the efforts, but donât want this to become a Brexit deal for 3p sellers, as I feel that will be the end result.
Amazon can simply force anyone who wants to sell on the platform to consign inventory as a vendor and be done with the whole problem by becoming just another retailer.
Itâs not the existence of AWS thatâs the problem. Itâs that it provides rocket fuel for the $50B they lose each year in pursuit of retail â â â â â â â â â â . Itâs one of the great enablers of their predatory pricing model.
Well, this time the FTC seems to be relying on actual Sellers for consultation, translation, and recommendations.
Thank you for being a voice for all âthe Davidsâ (versus Goliath).
Also true, but many naysayers donât understand this, and Amazon is happy to capitalize on that misinformation.
I make the same assertion for any other business that can break down their P&L.
What is to say they will not subsidize the same activity somewhere else??? Other companies do it all the time entering markets. Does the name âWal Martâ ring any bells. Their nationwide/global expansion was fueled by their profitability, yet no one considered breaking up their tire department from their watermelons, despite the millions of small town businessâ destroyed.
Make the actions illegal not profitability.
Itâs not Amazon retailâs low prices that the FTC is complaining about. Those are GOOD for consumers. The problem is all the crap they do to 3P sellers which makes 3P sellers push prices UP. And in some cases, Amazon favoring Amazon retail offers/products over better 3P seller offers/products.
The biggest issue thatâs a very valid one is the fact the glut of sponsored ads is pushing away organic search results in favor of showing more expensive or lower quality sponsored listings.
Oh brother, their general counsel is trying to litigate public opinion and laying it on thick.
1. having to feature higher prices
Oooooh noooo (/s) Iâm happy to pay a higher price for legit product not from OA/RA and not counterfeit.
Next!
2. offer slower or less reliable Prime shipping
Um, Prime is a voluntary option. People can accept its shipping, not subscribe, pay extra if they donât like it, or simply pay shipping per order.
Next
3. make Prime more expensive and less convenient
Awww, is Amazon all worried about their grifting cash cow? (Full disclosure, Iâm a (pissed-off) Prime member who isnât renewing because Amazonânot because FTC.)
Not sure I even want to read beyond this disinformation opening salvo. Yikes.
Iâm curious as to what the FTC is demanding they do that would result in those 3 things happening.
The only thing I see having a valid argument (a very thin one at that) is theyâre trying to say the âfair pricing policyâ results in lower prices on Amazon because people are lowering their Amazon offer to match other offers on the internet. I believe the FTCâs saying their fair pricing policy is unfair and wants it gone.
I donât see the FTC demanding they stop offering overnight or same day shipping, or demanding that they charge prime subscribers additional fees.
I considered it but my wife wants to watch more Reacher with that Alan Ritchson guy. I have not checked her browser history, but I am sure she has searched for Onlyfans/AlanRitchson.
While a lot of people dislike walmart, they did a lot of good in bringing down prices for consumers.
If I lived in a small town, I would choose having a walmart versus a bunch of mom and pop stores.
Big companies excel at selling commodity products, because they have economies of scale and can sell them a lot cheaper.
Small businesses are better at selling products that require service/support, or products that are unique, because minimum wage workers arenât helpful if you have any questions beyond âwhereâs the produce section.â
Well yes, if I was on the wrong side of the equation I would have a different opinion.
For almost any case where someone gains, someone else loses. Whether or not companies should pay people âliving wagesâ is a hotly contested topic for this reason. People might initially say yes, but then think about it and realize they need to pay more for their products and some will change their minds.
Think about this.. how many sellers would choose to pay higher FBA fees to give FC employees better working conditions?
Nope. There are many ways most people can benefit. It all depends on how one gains. I can get more to eat without having to steal or murder.
Does not have to be. See above statement for the same reason. Greed is the reason shareholders come first then employees. Why, because we as consumers let companies do it so we can save $0.30 on our deodorant. But I digress, that conversation is for a different venue.
Why does nobody ever ask how much their heathcare would cost or how much health care could be provided for a little less for David S Wichmann at ~$19M a year. Clearly he does not generate 20M offsetting dollars or value in healthcare. We allow it as consumers and voters told all other options are bad because of one -ism or another.
Like congress voting on their own raises.
A little more of this, will put us back on track as a society.
Well, I donât want to get too far off topic on this, but you have to remember a companyâs duty is to their shareholders, not employees. The shareholders are the OWNERS of the company.
âESGâ investing (which is where funds invest in companies that âdo the right thingâ) have historically performed poorly. If you want high returns you want companies to prioritize profits over anything else.
Same goes for Amazon, they have a duty to shareholders, they do not have a duty to 3rd party sellers. As far as Amazon is concerned, 3rd party sellers exist for the sole purpose of lining their pockets, hence the ever increasing fees. At some point (and this point is now for many sellers), most Amazon sellers will be paying almost all their profits in PPC fees just to have a chance at competing. They have the power to do this because sellers are willing to deal with their crap to sell on Amazon. Iâm guilty of this, as is everyone else here. If all sellers walked from Amazon their business would collapse overnight as Amazon retail doesnât make any money and canât support their fulfillment network and everything else.
Also, defined by the company not the shareholders. You may want to let Costco (and their shareholders) know they have been doing it wrong making customers first and employees second.
Large companies, not medium or small ones which make up the majority of the economy.
I donât like to quote the same thing multiple times but here it is again cause its relevant.
âCapitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work together for the benefit of all.â
Then the sellers made their bed, why complain about how bad it is after waking up next to the devil.
No, only those who cannot innovate and make something new. We donât need 10,000 more spatula sellers who source from Homegoods on Thursdays when the bin rolls out.
Not every seller sells other peopleâs stuff. Some of us make new things and Amazon is just another market place.
If all sellers left Amazon would still be in business making a profit with vendors. Amazon chooses vendors, Sellers choose Amazon with zero qualifications. I would be willing to bet 70+% of Amazon sellers are just hocking the same stuff. Do you really think we need 17 different kinds of Chinese made Huggy Wuggy plushies? How about the 32nd version of the same lawnmower tire from the same factory?
2 million 3p sellers making 60% does not mean they all contribute. It does not even mean most. How about all the useless drop shippers from Turkey and Thailand, what about all the stolen goods merchants. All of those are counted too, despite being a detriment to the marketplace.
Amazon should take out the trash. Make competent sellers vendors and clean house of the amateur clown show and greed disguised as âbusinessâ.
The idea that Amazon would collapse if they ended 3P sellers is absurd IMO because there are many large sellers who would simply become vendors (again in our case).
Does Amazon need to be reigned in and regulated? Yes. Does Amazon have blatant abuse of sellers? Yes. Does Amazon have a flood of amateur clowns who have no respect for consumers, the marketplace or industry? Absolutely. Does Amazon enable PRC direct to consumers ending many American businessâ because of questionable quality/labor/hazmat/etc because they pay lobbyists to make people look the other way? Absolutely!
But no. AWS profitability is the issueâŚ