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[StreetsofBeige]

Looks like Lina Khan is back trying to grill Amazon. She was the head staffer in the middle of the MS/Activision merger which eventually had the FTC bailing.

Article too big to cut paste. Feel free to read yourself.

FTC files antitrust suit against Amazon, alleges retail site is illegal monopoly

The FTC and 17 state attorneys general filed an antitrust suit against Amazon on Tuesday, alleging the company operates an illegal monopoly.

finance.yahoo.com

 

[DeepEnigma]

The irony that most of those states shut down all small business retail minus Amazon and big box stores during the pandemic, further enriching their monopolistic wealth grab push. and growth

 

[Cyberpunkd]

Stock down almost 4%.

 

[K2D]

The irony that most of those states shut down all small business retail minus Amazon and big box stores during the pandemic, further enriching their monopolistic wealth grab push. and growth

Agree that total shut down might not have been the best course, but didn't businesses in US get recompense?

 

[DeepEnigma]

Agree that total shut down might not have been the best course, but didn't businesses in US get recompense?

No. A lot of them closed their doors for good.

 

[ChuckeRearmed]

Doctor Lee is charging his gun

 

[mitch1971]

I suppose if Amazon lose they will get fined a comparative pittance of what they earn in a year.

 

[Mistake]

Agree that total shut down might not have been the best course, but didn't businesses in US get recompense?

There were ppp loans, but that doesn't matter because it isn't how people work. If your business is closed for X amount of time, those people then have to go somewhere else, and once they do, you're probably not getting those people back. Also, a lot of businesses didn't even know if help was coming, or if they would get enough, so small shops were forced to choose between going into debt or closing

 

[Jinzo Prime]

The FTC's claims seem overblown. I think this is going to end like the Activision lawsuit. Khan sucks.

 

[simpatico]

Just a shakedown. If they contributed to the right campaigns this wouldn't be happening. Can't take the US gov seriously.

 

[FullMetalx117]

I think she has a point but don't know how they they'd win.

I think it makes sense that the Amazon 3rd Party Fulfillment centers/FBA program should be made its own company. Right now the current trajectory is Amazon winning internet retail and then also controlling all small sellers/3rd party with the FBA program as well. If made a separate company, I think it opens up internet retail/competition. I know AWS is the popular one to split out, but in terms of retail spend, I don't think its relevant and not a problem to society remaining a part of the greater Amazon.

 

[StreetsofBeige]

The irony that most of those states shut down all small business retail minus Amazon and big box stores during the pandemic, further enriching their monopolistic wealth grab push. and growth

No doubt.

And not just big box stores. Also big box fast food joints. Every city was different, but during covid lockdown in Ontario somehow all the KFC's and McDonalds of the world were still open. But the small eateries were basically all shut down. So something happened where the giant restaurant chains were allowed to be open.

Variety stores (places that have a lot of people with germs popping in and out) seemed opened to the public too. But then something important like opticians, rehab and physio clinics were all closed even though they are health related and not the types of businesses that are jammed packed with contagious people.

And the biggest counter-intuitive thing was when things were still on lock down or semi-lockdown and suddenly the city is like.... good news, we are opening up Skydome for Blue Jays games. Even at half capacity you still can get 20,000 people and 1,000 workers all together. I know because some buddies I went to a game ad we were shoulder to shoulder in the crappier mid tier sections. That should be germ mania, but that was allowed??? They didn't eve spread out seats and ticket sales to space people out. All they did was sell tickets to the better half sections and blocked off sales to the level 500 cheap seats. So everyone is jammed in the lower bowl.

And at the time I'm pretty sure mask mandates were still going on. Whether it was by the city or the dome's own rules I dont know but the rules were get this...... you must wear a mask when you enter the stadium and walk around the snack bar tunnels. But the seated sections (everyone sits like sardines), masks can be taken off as you cheer, yell, eat and drink rubbing shoulders left and right. How is that logical?

A lot of bags on money waved in the face of politicians since it made no sense what was approved open and closed.

 

[Cohetedor]

Amazon simply benefited from everyone staying at home, makes sense since a lot of us were laid off for months. Pretty much anything without a drive through window shut down.

Hell, in my state you weren't even allowed to go fishing if you had a motor on your boat.

 

[StreetsofBeige]

Here's my take on this as I skimmed the article some more. Granted this comes from my company being large where we got a team of dedicated ecom account managers, analysts and marketing managers. So compared to a small business, we got resources, scale and money to do stuff.

Regardless, here's my take from what I've seen from dealing with Amazon:

- In our pecking order of which retailers are costly to serve and which are dirt cheap, Amazon is somewhere in the middle
- The price Amazon charges is based on account manager reco's which will work and satisfy Amazon as long as the margins are good
- Amazon will scrape other retailer sites and price match for consumers the lowest price it finds. This goes for products they believe are worth matching
- Amazon will not counter charge a supplier for reducing the price to match another place. They will eat it. But they will notice their avg margin sinking if they are price matching all the time and come back for concessions
- Overall, Amazon works for companies that sell well. The better your shit sells, the higher the product ranking. In order to get their ordering system ordering, you got to get sales. Then their algorithm of re-orders kicks in. That's why to get the algorithm going the ecom dept will order product! If a product doesn't sell, it'll eventually get delisted as nobody buys it and no orders kick in

The commission argues that although Amazon’s comparatively competitive prices benefit consumers, writ large, its seller policies harm small business owners by favoring businesses that hire Amazon's in-house services including advertising and sellers fees. In turn, the FTC’s theory goes, that harms consumers by forcing them to pay higher prices.

No shit FTC. Has anyone in gov ever worked at retailers/suppliers? Guess not. Any time a supplier uses a retailer's in house marketing programs, pts programs, credit card bonus pt programs, website banner ads, giant quarter page spotlights in a paper flyer etc.... of course the retailer favours you. You paid some money for a service and got the perk. In fact, I'd say prices go down for consumers because at worst the product is shown as regular price. But often it's promoted at a sale price. It doesn't matter if it's a big company or small company. Pay for the service and get a perk. If you dont pay, you get nothing.

Just flip through some online or paper weekly flyers. Anytime there's some splashy full page ad with cool graphics and layout for a smattering of products, it'll likely be a special fee initiative. Youve seen it. Coke or Pepsi will do it. P&G will. Nestle will. Half the time the products are probably on sale. That type of stuff is usually reserved for the big companies with money to spend with large product lines. That stuff isn't meant for Cathy's Cupcakes a local supplier with no money and doesn't even have manufacturing capacity to stock 1000 stores even if the retailer gave Cathy a full page ad for free. Large corporations have the factory capacity. But if Cathy thinks she can pull it off, that's fine. Buyers at retailer HQ are always looking for money. Just got to fork over a $100,000 fee, send them some fancy photoshop logo and banner assets so their team can make it look nice and commit to supply all stores.

 

[StreetsofBeige]

Another good pt about Amazon from a supplier's end.

As long as the supplier can handle filling out the required templates getting acceptance to be listed, Amazon is not a traditional brick and mortar store where account managers, directors, VPs have to do the dog and pony show meeting, doing dinners, trade shows and any of that crap. Ive never seen it. In fact, the Amazon head office people are very hands off. Makes life selling much easier and less costly. No cross country travel to wheel and deal in person and any of that "that's just the cost of doing business" like charity golf tournament fees.

Amazon is like social media. Anyone can do it. So it becomes a free for all of big sellers, small sellers, overseas sellers etc.... Some succeed, some fail.

 

[Haint]

The FTC claims that Amazon uses anti-discounting measures that hurt sellers and keep other online retailers from offering prices lower than Amazon's.

This isn't just an Amazon thing. MAP (minimum advertised priced) and "authorized dealer" price control needs to be outlawed full stop.

 

[StreetsofBeige]

This isn't just an Amazon thing. MAP (minimum advertised priced) and "authorized dealer" price control needs to be outlawed full stop.

That sentence you quoted, doesn't even make sense. Any retailer can sell for a lower price. At least in the stuff we sell. And they do all the time. Then again, my industry doesn't have MAP.

Theres stuff we sell for high prices to Amazon and the going retail price on their site is the highest I've ever seen. They are highest price. We make money, Amazon makes shit loads of money and the product is selling decent so that customer base values free home delivered product in exchange for buying it cheaper from another store.

It's just that sometimes Amazon will auto-price match a lower price from a competing store. Which is really no different than any store that offers a price matching guarantee, except Amazon does it automatically while other stores needs the customer to proactively get a cashier or online CSR to match a lower price they saw somewhere.

 

[El Pistolero]

Regulatory bodies wait until monopolies are in place, before "revolting".

 

[StreetsofBeige]

Regulatory bodies wait until monopolies are in place, before "revolting".

Makes sense to me, since when was the last time a city filled in cracks and potholes at the early stages? It's like they do the roadwork only when car tires are smacking deep in a hole. The good ol wait till the last minute strategy.

On the other hand, my dentist has given me 3 tiny preventative fillings. I've never had a real deep cavity filling despite eating junk and drinking pop all my life, nor have I ever had a toothache. Her attitude is "Let's fix it now before it becomes a problem". Sounds like good advice to me. What she could do is BS me, have my teeth rot away and charge my company's insurance company bigger fees for major dental work. But she's got ethics.

 

[Haint]

That sentence you quoted, doesn't even make sense. Any retailer can sell for a lower price. At least in the stuff we sell. And they do all the time. Then again, my industry doesn't have MAP.

Theres stuff we sell for high prices to Amazon and the going retail price on their site is the highest I've ever seen. They are highest price. We make money, Amazon makes shit loads of money and the product is selling decent so that customer base values free home delivered product in exchange for buying it cheaper from another store.

It's just that sometimes Amazon will auto-price match a lower price from a competing store. Which is really no different than any store that offers a price matching guarantee, except Amazon does it automatically while other stores needs the customer to proactively get a cashier or online CSR to match a lower price they saw somewhere.

The FTC's implication is that they have price control rackets set up with certain manufacturers, who will presumably refuse to sell product to smaller retailers that undercut MAP or Amazon.com. Obviously that can't and won't apply to ALL products, just certain ones. All the major big box stores love MAP and act as a collusive oligopoly in that regard.

 

[StreetsofBeige]

The FTC's implication is that they have price control rackets set up with certain manufacturers, who will presumably refuse product to sell to smaller retailers that undercut MAP or Amazon.com. Obviously that can't and won't apply to ALL products, just certain ones. All the major big box stores love MAP and act as a collusive oligopoly in that regard.

Interesting. I wonder what products those are.

If that’s the FTCs theory then they should be shutting down Costco asap. If Costco sees their customized giant pack product you sell them is being sold elsewhere irregardless if its priced more or less they’ll just delist your product.

And if Costco sees your similar branded products elsewhere for actually cheaper then their bulky pack if they do the price per gram or milliliter they might just bill you the difference doing a calculation on what they sold x by the price per measure difference.

 

[HoodWinked]

their argumentation is wrong but the correct one is hard to nail as a violation.

They are saying Amazon's controls prevents other from selling at a lower price when Amazon's price competitiveness isn't based on product margins, it's about selling Prime memberships. Because of that they will sell products at cost or a loss, but what are you going to do amortize the price of the Prime membership over all products sold within a subscription period?

You could nail Costco for this then, they sell memberships and that allows them to sell products at lower margins as well. But also memberships leads to near zero shrinkage because the customer base is a higher tier.

Considering the sheer retardedness going on lately they probably have a better chance at arguing that memberships are exclusionary and racist.

 

[StreetsofBeige]

their argumentation is wrong but the correct one is hard to nail as a violation.

They are saying Amazon's controls prevents other from selling at a lower price when Amazon's price competitiveness isn't based on product margins, it's about selling Prime memberships. Because of that they will sell products at cost or a loss, but what are you going to do amortize the price of the Prime membership over all products sold within a subscription period?

You could nail Costco for this then, they sell memberships and that allows them to sell products at lower margins as well. But also memberships leads to near zero shrinkage because the customer base is a higher tier.

Considering the sheer retardedness going on lately they probably have a better chance at arguing that memberships are exclusionary and racist.

When it comes to a lot of these high profile cases (which mostly the FTC gets rejected) they’d probably be more successful if their staff had private sector experience.

It’s like when government complains about budgets and cost overruns on projects. Well, maybe if the government procurement department actually negotiated like everyone else cycling from supplier to supplier over and over again to get what you want at a low price they’d save billions every year. Of course every supplier will pitch you a shit price on the first attempt.

Instead they do a bid system where suppliers just submit a jacked up price knowing the gov will pick one. That’s why every company likes a government contract but not everyone likes Walmarts shrewd buyers.

At my old company we supplied provincial hospitals with product. They by far didn’t order the most product but they had the best margins at the company because they bought everything at our company’s regular list price! No negotiation or anything. A big giant corporation selling product to the gov at zero discounts. Lol

Here I am analyzing cost structures when I was a new hire and suddenly I see all these provincial accounts and each brand has fucking zero discount costs. I thought it was an error or the system wasn’t tracking costs right. But nope. It was confirmed a 0% cost structure. Awesome.