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Comment by hammock | Hacker News Reader

It's literally what every mass retailer does. CVS, Walmart, etc will use their power to decide your shelfspace/merchandising, combined with private label products and a pipeline of new branded products in your category (e.g. ever wonder why so many new jerky brands pop up and disappear overnight?), to put downward price pressure on you until your margins are razor-thin. This isn't that different. Anyone who has worked in/adjacent to retail understands how cutthroat the industry can be.

Retailers also force suppliers to buy advertising in their owned media channels (e.g. in-store and online) as another way to squeeze them. Amazon is doing/will do the same.

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> ...put downward price pressure on you until your margins are razor-thin

And consumers benefit. This is the power and peril of the free market. Everyone loves competition as a consumer and hates it as a seller.

I include folks that sell labor aka employees.

I don't feel like I benefit from a new brand of jerky brand with razor thin profit margins every week. It makes me wonder about what kind of crap is in the jerky, in fact.

Consumers might benefit if mass retailer accumulates liability when it does this but the mass retailer shoves it right on to the party with the razor thin margins.

Competition in commodities is great for consumers. The huge problems appear when the "commodity" isn't -- when some offering is inferior in some usually hidden way (including externalities).

Keeping prices high doesn't protect against that - a counterfeiter will happily sell at a high price, and a traditional supplier might cut quality in theory supply chain to increase profit.

The only solution is to have vendor and supply chain transparency (buying local, and supply chain offering video monitoring of their operations, maybe some Blockchain for tracking shipments end-to-end?), and to be willing to pay for the monitoring and for the quality you ask for. But at the end of the day must consumers talk a good game and then would buy whatever is cheapest or slickest marketed regardlesss of inherent quality or externalities, so it's more efficient to skip the charade.

> But at the end of the day must consumers talk a good game and then would buy whatever is cheapest or slickest marketed

Totally agree. Talk to your local CSA farmer if you want to hear about the difference between what people say they want and what they actually spend money on.

There are plenty of retailers that go out of their way to fight against the race to the bottom, charging a bit more and taking a bit more care to ensure they only stock good stuff. Amazon even owns one such store, Whole Foods.

If other people would prefer to buy dirt-cheap jerky from whoever can offer the lowest price this week, I don't see why it's bad to have stores catering to them too.

> Amazon even owns one such store, Whole Foods.

The quality at Whole Foods has gone down fast since Amazon took over.

Whole Foods sold itself to Amazon because they were starting to see a market that prefers alternatives. Prices had to come down for it to survive, and you can't lower prices on expensive product.

And that's assuming product quality is really lower. The only evidence of that I've seen is anecdata.

The stores look nicer at least. Great lighting!

>I don't feel like I benefit from a new brand of jerky brand with razor thin profit margins every week.

Then find a brand or local business that makes what you want. You'll pay out the nose online probably, but I've found a modestly priced local place that makes great jerky because as you said the store stuff is...not great, and questionable.

Retailers buy from vendors and assume the costs of their own business (warehousing, sales, etc.). They assume certain responsibilities regarding the products they sell in their stores. In this case, Amazon is pushing all the costs back on to the vendor, for whom they only provide some distribution service.

It's common practice for retailers to push many of those costs (as many as they can) back on the suppliers.

For example, Walgreens expects ITS VENDORS to stock the shelves, cycle expired product, and install and replace in-store advertising. Walgreens doesn't do it themselves.

And as for sales, often a supplier is required to buy back stock that goes unsold after a period of time. It's crazy, but that's how much power retailers have.

Oh sure, I work in publishing and that sort of thing goes on. In the old days of mass-market distribution, the guy on the truck would be the one putting books in the racks, and taking back the returns (or the ripped covers). Returns have been a thing for decades. A system of coop payments decides who gets good placement in the store. But in the end, the retailer is paying the vendor for goods sold.

Precisely this, Amazon is not the same as retailers. Amazon may have warehouses but it doesn't purchase and hold inventory the same way CVS or WalMart does.

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