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To me the real problem isn't the size of Amazon's business, but rather the nature of it.

Amazon is both the owner of the most successful and widely used marketplace, as well as a competitor of the merchants in that marketplace.

Having access to all of the transactional and user data, Amazon has an unarguable advantage over the rest of the merchants in it's market. They can beat anyone on price, placement, or delivery speed.

Barrier to entry into running a competitor market is effectively controlled by network effect. Simply running a competent customer service system and keeping prices within a certain range close to lowest provides an effective license to eternal profit.

Adding competing products when successful volumes are proven by their merchants gives them a very effective way to widen that profit on demand at the expense of their merchants and ultimately to the detriment of their customers who wind up paying more with less available selection.

How is that different that other big retailers ? I mean, any chain here (Carrefour, Auchan, Lidl, Aldi, ...) have their own products brand too from foods to clothes to electronics, to whatever, and they have the same advantage for them as amazon have for theirs.

This has nothing special to do with amazon.

Same with WalMart, Target, Trader Joe’s (which iirc is Aldi owned), Costco, and probably many I’m forgetting. Everyone who has a marketplace uses the opportunity to offer competing products.

The control brand is not necessarily a retailer-owned brand. It is a control variable to determine the value delta that consumers ascribe to branded goods in the absence of quality difference.

Every decade has its unstoppable juggernaut of a business, with endless articles pontificating that the government should step in and dismember them, and then some new business emerges that takes them apart, and the argument repeats itself.

> They can beat anyone on price, placement, or delivery speed.

Well.. except for OEMs.

Honestly, small knowledgeable shops owned by enthusiasts for the merch are the ones with the least to worry about from Amazon. It's the Walmarts and the Best Buys where the staff is basically untrained in their products that Amazon beats.

I go to Amazon when I know what I want. I go to a store when I need staff to tell me what I want.

One day Amazon will finally learn to curate their products in some vaguely coherent sense of order instead of an infinite pile of semi-differentiated search results and then Best Buy is really screwed.

I used to be a mid level manager at a small regional somewhat-niche retail chain. The last few years they have started to heavily focus on employee knowledge. Hiring full time staff whose only job are to be product experts to help customers, introducing huge amounts of product knowledge courses. They know they can't beat the big boys on price so they are trying to become THE local place you go to talk to someone about this specific niche. It has been working out very well for them.

The niche doesn't even really matter here. It could be car stereos, music, books, alcohol, grocery, whatever. I definitely think the path to survival for small retail shops going forward is going to be expert level knowledge and customer service. The days of people patronizing your store just because its physically nearby are numbered.

edit: Also, and this is totally anecdotal, but I personally shop at several places that aren't quite the cheapest (though none are TOO relatively high priced) but I continue to shop because the staff are far more knowledgeable than I and their assistance is well worth the extra ~10% in price.

Notable that yesterday one of the top stories was that Amazon's major book competitor, Barnes and Noble, just fired most of those exact "expert" staff. That they claim they cannot afford to loss lead books like Amazon does, so they must instead discard their highly paid, skilled workers in favor of minimum wage.

This is the general trend in most of America. Many now fall into one of three categories. Highly rewarded entrepreneur / chief officer, educated and well paid but fiercely worked salary, or minimum wage serf. The bands are also becoming more defined and logarithmically separated. ~$16000 (2^14) [serf], ~$90000 (2^16.5) [educated salary], $500000+(2^19) [wealthy / gentry]

Further, the middle section is mostly bleeding downward due to factors like the above mentioned layoffs (Sam's Club did similar), the increasing relative cost of education / health care / other barriers to entry, and the inflation adjusted erosion of buying power.

Its an argument to say the path is towards expert service, yet with the range of social review / recommendation pages / boards available now (much of which Amazon itself cultivates), even newcomers can quickly become informed if they are so inclined. No wonder many now prefer to use automated isles rather than human checkouts. The staff provide little and often just push annoying suggestive sells.

This actually sounds really great and I would actually go to such a store for certain things.

Yep, recently I've been buying Chess sets and Amazon sucks absolute balls at that, I can't filter the over priced shite from the decent stuff and figuring out who is supplying what is hard.

In the end I just bought from a uk chess specific supplier and all my questions where answered on the page.

Now that's a niche I acknowledge that but still with all their data and product ranges a small online retailer beat them.

Exactly. Amazon's SRPs are an utterly miserable browsing experience because it's so hard to separate the wheat from the chaff. So many no-name Chinese garbage importers, out-of-stock-except-for-gougers, redundant listings for the same product, etc. Stuff you'd never have to deal with on a meatspace store shelf.

> I go to Amazon when I know what I want.

This part is probably going to be Amazon's undoing if they don't change their ways. If I'm buying a charger and know what I want, I really cannot safely buy from Amazon. It is much safer to buy from a Best Buy in that situation.

This is why I go to Ace over big box. I can walk in with 2 parts and say I need to connect these. They'll page the right person and a minute later they will be finding the right parts and get me set in a few minutes. This would take nearly an hour at Lowe's or Home Depot unless you lucked into the right employee. It would be a total time waste to try to do the same on Amazon. I don't care about paying 10% more for the convenience. Ace is also a retail co-op.

Ace is fantastic. Every Ace comes with an ambiguously old guy who knows everything about whatever project you're doing and can advise you about the tools you'll need, potential pitfalls,etc.

I always go to Ace first because of that guy. It's one trip to Ace vs the two+ trips to Lowe's when I'm doing something new.

Amazon can sell the parts cheaper, but the knowhow they can't provide is invaluable.

If you take something like a RC Car store that sells drones, batteries, kits etc. as an example, I think you are right, though those stores still need to keep their prices in check. I have no problem paying more for something local that I can walk out with immediately, but if their price ends up too much higher, I just can't justify it.

>I go to Amazon when I know what I want. I go to a store when I need staff to tell me what I want.

Bring your smartphone with you when you go to the store. That way after the staff tells you what you want, you can order it from amazon without leaving the store.

That's called showrooming and is a serious dick move to do to a small business.

Yeah it is, my parents owned a small business and they got owned by this tactic.

Don't rely on altruism for change. Expect the worst out of people.

> I go to a store when I need staff to tell me what I want.

Or eventually, you and everyone will skip the store trip by asking Alexa on the Amazon Echo in your smart home.

>They make logistics for us a 1000 times easier. In 3 clicks I can get items ordered that we need and not have to worry about it. (Need a new storage rack? BAM! Be here on Tuesday? We need a new printer ribbon? Phone camera + Amazon app = I have the exact one I need to replace.)

There's a balance between convenience and being subservient l or redundant to them long term.

People have found that the convenient (no pun intended) store that sold everything at nice prices also ended up killing local businesses, and eventually their own livelihood, even if not related to retail.

Not to mention the power the private interests behind those stores get in the country's politics or even globally.

Their monopoly is more abstract: they have a monopoly on convenience. They ensured their product selection covers a wide variety of common objects that most people end up buying and streamlined their checkout process (they had the patent for 1 click checkout for 20 years) to reduce as much friction as possible to ensure that carts would not be abandoned.

If the complaint is they had an unfair advantage because of software patents, then it's easy -- end software patents.

I'm frustrated that is patentable

this points to the other side of a comment i just made yesterday (about uber):

"yes, that's how capitalism is designed to work. the window in which you can make outsized profits is meant to be temporary so companies can't just rest on their laurels.

it's beautiful when it works."

walmart has been smart enough over decades to never rest on its laurels, so it's competing fiercely (and successfully) with amazon.

barnes and noble and k-mart on the other hand are dying a slow painful death because all the pointy-haireds rushed in for their personal payday and didn't build a competitive business. both are probably hoping a white knight private equity deal will raise them from their ashes, as happened with target (don't think the brand equity is there, but who knows).

walmart and amazon have been setting the pace for competitors in retail. you can't use a low price strategy against those large players, but you can take a differentiation strategy (e.g., better, more knowledgeable service, as others have pointed to).

another area of pressure on large companies is on the labor side of the equation. walmart and amazon have squeezed labor to the bone and governments have done little to level that playing field (skills-based programs preferred there).

> That's not Amazon's fault; that's the business' fault. This is no different than the Walmart's, Barnes and Nobles (remember when there were small bookstores?), etc. of the world.

One way in which Amazon is different is that they were able to loose boatloads of investor money to get to where they are today. That is not true for your father (who I empathize with) or even with Walmart or Barnes and Noble who have traditional investors who were not willing to allow the type of pie in the sky losses that Amazon got their investors to go along with. For one thing Amazon was a new (internet) business and those others were existing businesses. So this is not a case of simply 'work smarter and harder' or even close. Amazon is a special case. And despite what anyone thinks it was not assured in any way that they would get to the dominant position they are today. Honestly it defied many of the traditional rules of business. And only worked because Bezos (like Musk, Jobs) was able to be both a celebrity, visionary and have the type of control that they had. Not the same as what your Dad can do no matter how smart and driven he might be. [1]

[1] Back in the day there was a tv show about a blind man that made it through medical school. I believe it was based on a real situation (man became a psychiatrist). In any case an outlier like that does not prove 'it's possible' at least on any repeat basis.

I think this can be said about any franchise or marketplace vs small business.

For example:

If you started your own car rental company, at a glance it might be tough to compete with the 10 or so large companies that exist today. There's no way you're going to compete with them when it comes to advertising. They have an army and seemingly infinite funds for raising their brand awareness and you don't have that.

Let all of those 10 popular rental services race to the bottom on price and deal with razor thin margins (which works for them because their volume is a lot higher). You can't compete there.

You need to win on things like customer experience, support and maybe even go after a different target audience. Niche down, create a really good service and crush just that segment of the industry.

Justify your higher prices with your own uniqueness and value.