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Comment by learc83 | Hacker News Reader

Grocery stores don't operate as a "marketplace" though. Grocery stores curate their offerings, vet vendors, deal with returns etc...

Amazon is more like shopping mall that decides to start operating their own stores and competing with their tenants.

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You have a point but I think the fact that grocery stores sell private label goods is the counter-point. Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time. We call them supermarkets, right? A grocery store is simply a more organized open market. Which is very comparable to Amazon.

I think the problem is that they present the results on good faith that "these results are the best match for you based on your search", not the most profitable for them.

I just ran a search and the default search filter was "Featured", which is so ambiguous it could mean anything, so it seems like a classic bait and switch that played out over the course of a decade of consumers getting the best search results based on reviews and sales.

> A grocery store is simply a more organized open market.

That’s not true though right? Don’t grocery stores buy the products that are on their shelves and they are reselling them? That’s fundamentally different from a marketplace.

> Don’t grocery stores buy the products that are on their shelves and they are reselling them?

No, not usually. Usually the seller pays the grocery to carry items, and the seller owns the items until sold.

For some products the seller even stocks the items on the shelves.

I think that's true for most goods, but there were definitely brands that stocked their own shelves at Publix when I worked there.

That said, what brands got that special treatment was very much decided by Publix, so they were still curating the selection, they just weren't paying up-front for the goods or responsible for keeping those shelves looking good.

Generally Publix still owns that inventory though (even if they have a buyback guarantee) My dad worked for Lance snacks when I was a kid. He stocked the shelves, but the stores paid him for the product.

Did they pay him for the product before or after it was sold? I never really knew which way it went, but assumed that since the entire thing, except checkout, was handled by the rep, Publix never really owed the product, they just sold it as if it were on consignment.

They paid him before. But really big stores would buy the whole thing on credit.

They definitely owned the product, while it was on their shelves.

Even if a vendor has a buyback guarantee for expired product, if someone were to break in and steal all the product, its the store who is liable not the vendor.

Some grocery stores, like Kroger, sell their own branded products in their stores.

Exactly. Stores like Kroger use their data, make generic versions of popular items, and sell right next to the brand at eye level. Amazon just does it at a larger scale.

>Grocery stores re-package goods like rice, beans, paper towels, etc. to compete with their vendors all the time.

That was the original point I was arguing against.

My point is that grocery store is not a good analogy because Amazon is not the same as a retail store, they are a combination store and marketplace.

I would argue that a grocery store is a combination store and marketplace in that case. Stores have plenty of in-house brands, they also have racks of goods that are stocked and sold by third parties wherein they get a cut.

To be fair, I think I would be more comfortable comparing Amazon to Sears in it's heyday.

>, they also have racks of goods that are stocked and sold by third parties wherein they get a cut

I'm sure that exists, but it's not common. Grocery stores often charge slotting fees, but that's not the same as renting shelf space--the store still owns the product (even if there is an agreement to buy it back if it doesn't sell).

Also retail stores take on more product liability than marketplaces like flea markets do.

What store / grocery store has goods stocked by third parties? (Rather than purchased from the third party by the grocery store)?

All of the ones around here do. Used DVD racks still exist. Soft drink vending machines. Seasonal items. Newspaper racks.

In the case of items actually run through the register, I'm not sure how that's dealt with from an accounting standpoint. I do know that the stores have the ability to return 100% of unsold goods in those cases.

Is it really? I don't see how this comparison works at all. Amazon gives you distribution, traffic, logistics, etc, with zero risk. They just take a fee if you sell. The only upfront cost is if you pay the premium FBA and that's still a like a 40 bucks per month fee.

I'm not trying to defend Amazon, but I don't think that comparison makes sense.

It's obviously not a perfect metaphor, but neither is a grocery store.

>Amazon gives you distribution, traffic, logistics, etc, with zero risk.

Not everyone uses the distribution, and a mall or flea market also provides traffic to tenants.

At a mall you pay a fixed cost in terms of rent, regardless of sales. Amazon doesn’t charge you to simply list your product, right? If vendors were being charged a fee just for the listing itself without any sales, your argument would be more valid.

If amazon does charge a fee for simply listing a product, tell us. They don’t as far as I know.

Some leases do require you to pay a percentage of sells...

https://www.nolo.com/legal-encyclopedia/clb-percentage-rent....

No analogy is perfect. Amazon obviously isn't a mall, but it's not a grocery store either.

A grocery store owns the goods in their possession even if they have agreements for sellers to buy some unsold product back. Amazon does not own the 3rd party goods in their possession.

You’re dismissing the mall call by saying no analogy is perfect since it doesn’t work for your argument but then you’re comparing against grocery stores, which is a pretty gross simplification.

Amazon isn’t a grocery store. The majority of their catalog isn’t even available at most grocery stores, maybe excluding WalMart.

My family owned several convenience stores growing up. Some products were bought and it was your problem to move them off shelves. Some were displayed on shelves and you only paid for what was actually sold. This was common with one of the distributors who gave us Frito Lay products. Other products had strict terms - for instance, Pepsi and Coke distributors wouldn’t give you competitive pricing unless you agreed to purchase Y in X quantity, place their mini coolers next to the refrigerator, place signage within x feet, clearly visible from the front entrance, etc. suddenly, you’re the only store in town who sells 16 oz soda for $1.59 just to break even while everyone else is selling the same soda for $1.09 or just 99 cents.

It’s a different model than Amazon and you’re taking liberties to simplify it

> You’re dismissing the mall call by saying no analogy is perfect since it doesn’t work for your argument but then you’re comparing against grocery stores, which is a pretty gross simplification.

No I'm saying it has very important distinctions that make the grocery store analogy inappropriate and that the mall or flea market analogy is closer in some respects, but not all.

>Amazon isn’t a grocery store. The majority of their catalog isn’t even available at most grocery stores, maybe excluding WalMart.

Of course it's not. That's a big part of my original point.

> Some were displayed on shelves and you only paid for what was actually sold.

My dad worked for Lance (and frito lay for a while). I could be wrong and you could have had a very unusual distributor. But my guess is you misunderstood what was happening.

Companies do sometimes offer buyback guarantees and you might even be able to buy items on credit, so that it appears you're only paying for what sells, but that's not actually how it works. Those items are the property of the store while they are on the shelf.

Really curious. How are the other guys selling for $0.99, if they didn’t get the competitive pricing? (Presumably because they didn’t go through the sign within X feet antics)

They did get competitive pricing, but they have a lot more wiggle room because they’re a giant company with far more revenue, marketing, and branding than a couple ma and pa stores. These distributors may or may not have the exact same terms, but at the end of the day, these other corporate stores had enough foot traffic that provided them ammo to help define their own terms. You just didn’t have that leverage as a smaller shop.

Doesn't a grocery store give their product manufacturers those things as well? Distribution, traffic, logistics, marketing.

Perhaps, but with minimal control, larger risks and upfront costs. Especially if you're a small company selling under consignment.

Facile argument. Grocery stores actually rent shelf space in many cases and do not take on product liability. It’s a different business entirely.

Amazon is totally within their right imo, those sellers can go back to eBay if they dislike amazon.

Retail stores absolutely take on more product liability than marketplaces do.

Malls curate the stores that they lease space to. That's why some malls are very high end and others are not.

>Amazon is more like shopping mall that decides to start operating their own stores and competing with their tenants.

more like a big box store that allows other stores to operate in them so long as they get a cut.

On the other hand, it's somewhat unlike a regular marketplace since Amazon requires vendors to match or exceed their own return policy.

>Grocery stores curate their offerings, vet vendors, deal with returns

Amazon does all of these things. They have unlimited shelf space, which reduces constraints.

But vendors can have amazon handle returns, they can be kicked off the platform, and amazon decided how to present vendors.

I don't really see how important that distinction is.

Amazon does that with A-Z guarantee and helping resolve disputes and presenting listings and having Amazon Basics and Amazon’s Choice.

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