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Comment by Apofis | Hacker News Reader

They've been driving prices to rock-bottom for so long, it's pretty ironic that they get sued for trying to raise prices. Such is life.

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Depends who’s prices. When Amazon corners a market with their own service they drive prices up (in the article the seller has to use Amazon Logistics). When Amazon sells your book, it’s your price, then Amazon demands that you sell through them at your lowest price, in their TOS you aren’t allowed to sell your book anywhere else for less.

Of course there is almost no resistance to their dominance because we live in a time where legislators favor large businesses (because Citizens United). Examples of a broken regulatory environment... FCC turns a blind eye to deceptive practices like Amazon’s false advertising (BuyNow button for ebooks that you don’t really buy). The patent office gives patents for trivial improvements like the OneClick purchase button, which obviously helps large businesses with big legal expense accounts. And the grand daddy of anti-competition is the ability of technology giants to spy on other businesses, Amazon, Google, Apple etc snoop via their platforms and analytics services to choke out competitive threats. How do they choke them out? They control the search engines and browsing platforms as biased referees, so they decide what we see via recommendation tweaking (which is also why the Advanced Search features in these platforms, appstores, market places, search engines, are quietly disappearing, they make it harder to skew the playing field).

Not really ironic, selling products at a loss to drive others out of business then raising prices on consumers after you have driven your competitors out of business is the definition of anti-competitive behavior.

That's retail in a nutshell though.

Not in this case. It's FBA fees that are out of line with other 3PL providers - and Amazon's punishment for sellers that do not use FBA coupled together, that make for more expensive products as sellers have to increase price to stay profitable.

That unfairly harms the consumer, which is the basis for this Anti-Trust argument.

Effectively, Amazon has built the world's largest Marketplace by losing billions and billions for years and years, turned said Marketplace into an almost necessity to sell on, decided it will also sell on said Marketplace often at unfair prices below manufacturing cost of the goods, and now has made their own Logistics Network an effective requirement for selling on the very same Marketplace.

Yeah, the FBA fees are ridiculous for small items, especially considering that Prime is supposed to be paying for the two-day shipping.

I used to sell FBA. I calculated that if the price is below about $8.50, then I will make no money - it'll all be eaten up by Amazon fees (some fees are fixed - not a percentage). If I sell at $10, I get about $1.25. Above that it's somewhat linear (e.g. sell at $20 and you pocket about $10, etc).

In my case, this wasn't a problem. I chose to get into the market specifically to sell FBA. As such, I knew cheap items were not viable for FBA, so I didn't sell cheap items on it.

Also explains why it's impossible to find virtually anything with Prime under $9ish. I order almost entirely off Aliexpress these days because I'm rarely in a hurry for anything and it's typically less than half the Amazon price for the same junk.

FYI Amazon has a program called small and light that is designed for this < $10 items if they are small.

The minimum commission fee of $1 still takes a large byte out of that though. (Commission fees being in addition to FBA fees)

That minimum commission fee is the reason you don't see anything on Amazon for below $6 (unless there's some weird accounting going on for the seller). Above $6, the fee turns into a percentage and is easier to manage.

That fee is also the reason you'll often see packs of 3 or some item when you only want 1... it's just not profitable to sell the 1 at a reasonable price anymore.

As an aside, the SNL program doesn't get all the same benefits as FBA. In some cases you don't get the Prime badge, and in other cases you're an "Add-on Item" to get free shipping for the buyer.

$.80-$1.00 per order, plus $.75 per unit, plus $.11 per ounce. You can end up paying two dollars just to put one tiny item in a box. And that's separate from the commission, as mentioned by Alupis.

Predatory pricing is a myth.

I disagree. It's been my experience that Amazon very rarely has the lowest price. They prefer to charge higher fees for listing than places like Ebay and hope people choose Amazon just due to brand recognition.

Yeah I’ve consistently found amazon to be more expensive than other online stores and even brick & mortar sometimes, at least here in Australia. They USED to be cheaper for everything, but not for a while now.

Amazon is good for the occasional sales, stuff that’s hard to find locally, or stuff I need quickly. That’s about it.

> They USED to be cheaper for everything, but not for a while now.

Yeah, and their website isn't even that good to boot (search sucks, for instance). I think they're coasting based on customer inertia and market dominance.

I think they spent many years investing in creating that image for themselves, and did so successfully enough that people have taken it as fact and no longer question it. But it's been gradually becoming less true for years. They're no longer subsidizing purchases the way they used to.

The reason they were so aggressive about forcing Prime onto people was to engineer the behavior into people of buying from Amazon by default. Rather than ask questions about where's the best place to buy.

For something I can get at Best Buy, for example, I wouldn't buy online and wait for shipping, I use their price match (if I need to) and get it same day. And often when I look up the same item at different online retailers, the price is the same or one site undercuts the other by a penny. Not a coincidence, they all have to stay competitive.

> driving prices to rock-bottom

No. They've been driving cost to rock-bottom - not price. It's margin they're after.

Their 'dynamic pricing' is the biggest issue. It's completely opaque to everyone except Amazon's algorithms that want to maximize margins/profit.

E.g. frequently items will be at some discount level one moment, but then based on some trigger (e.g. increased views) it leaps up. I've have many cases where I found an item on sale - sent the link a friend and by the time they go look (sometimes just minutes later) the price has jumped.

Look at camelcamelcamel and see the wild price graphs - and then understand that Amazon doesn't even share many of the intraday price changes with 3rd party services.

FWIW, Amazon does not do dynamic pricing for offers from 3rd party sellers.

I can't even remember the last time Amazon had the lower prices than other online retailers. The cost of "free shipping" and Amazon's fees are very much baked into the price of each item on their site.

As I read it, they are using their dominance to force sellers to use their logistics service while increasing the price sellers pay for that logistics service with threat of being de-ranked if they don't use it.

All they will say is that buyers prefer amazon logistics and will pull out some user surveys and delivery rate statistics to prove it.

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