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Comment by annoyingnoob | Hacker News Reader

No, this is not great for the consumer. It lowers the bar for everyone. What I find mostly on Amazon in the past year or so is cheaper imported versions of decent products. The decent products are hard to find or I have to look outside of Amazon. They've pushed out the quality and replaced it with higher profit junk.

Its kind of the same thing with Home Depot. I used to be able to buy quality hardware from a local store. Now all I have is Home Depot and they sell mostly imported junk hardware. I have to go somewhere like McMaster-Carr now for quality hardware. Home Depot has not been good for me, Home Depot has only been good for itself.

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Different problems. One is the regulation of which suppliers can distribute on a platform, deceptive advertising, right-to-repair, and similar consumer protection considerations.

The other problem the article and parent comments are describing relates to the distributor/retailer creating or sourcing generic alternatives to the items sold by their existing suppliers and informing their decisions to do so based on the sales data from their own partners/suppliers.

This latter case seems ok to me, even if it sucks for suppliers, in the sense that we generally get better outcomes for customers. As long as the general regulations for consumer protection are in-place such as preventing confusion between brands and generics.

What's your evidence that we get better outcomes for consumers?

Good question. Actually I don't have any data for that. Anecdotally many "store brand" items of things that seem commodity-like, are things that I can get the same quality as a name brand at a lower price. This is better for me, and I suspect better for most consumers in a static situation. But the market is dynamic. Does this stifle innovation of new products? Does the reduced revenue of "brand" named producers, especially smaller ones hurt? Does the price competition produce a race to the bottom that ultimately doesn't benefit consumers? I don't know. But I would say that the considerations of increased regulations of "generics" vs increased regulation of "online markets" seem to me to involve different tradeoffs.

Sadly, the American grocery store is not optimized for consumers, so we can't draw many inferences from it. It's true that no-frills versions of commodity products are a good deal compared with heavily marketed products. But I don't see any reason to think letting individual stores dominate that market segment would be necessarily better for consumers.

Giving consumers the same basket of goods at a lower cost just increases their real income, purchasing power, and overall standard of living. Amazon is effectively distributing billions of dollars of charity to those who need it the most. They lose $2 billion a quarter on retail. That's $2 billion per quarter in subsidies to consumers.

...which is classic anti-competitive behavior. That isn't a free and fair market - it's one that's in the process of being captured by a few large incumbents.

Except that they'll quickly recoup that "subsidy" by raising prices after they've dumped their competition.

If they raise prices then they invite an instant flood of competition and lose their monopoly. They have no power to raise prices and restrict competition. Their only competitive advantage is pricing. Amazon's only profitable products are AWS and its stock. The benefit of losing $2 billion a quarter doing retail is debatable. Would you prefer a world without amazon's subsidies given that they have no power to exploit anyone?

Your theory is that Amazon is spending $2 billion a quarter even though it gets them no long-term advantage?

If you're right, then capitalism is hopelessly bad at optimization and we should scrap it. But what I think is more likely here is that Amazon's execs understands the economics of their business way better than a zero-karma free-market fundamentalist whose pseudonym is a genitalia joke.

They get a long-term advantage in that their stock continues to rise. The stock is the product. And AWS enjoys having a household brand attached to it. And don't be mad that someone with a genitalia username is making a point your brain is incapable of making a cogent argument against, in spite of it eliciting a strong enough emotion for you to leave a comment.

Their stock will only rise if they eventually make more money. Meaning that investors expect them to be able to make that $8 billion/year up eventually. Presumably through pricing, because selling stuff at above-cost prices is where their money comes from.

Also, I only made fun of your username and your lack of karma because you were making absurd unevidenced claims like, "They have no power to raise prices and restrict competition." If you're going to say things like that, then it's not so much making a point as doing what Frankfurt calls bullshiting. [1] That combined with your very low karma suggests you're not really worth the time of a serious reply. Note the link in my bio: http://www.penny-arcade.com/comic/2004/03/19

[1] https://en.wikipedia.org/wiki/On_Bullshit

And what do you propose in place of capitalism? You sound like a child. Why would you want to force companies to make a profit on every product? There's something called a loss leader. How about just prohibiting all forms of charity? You make zero sense.

And at least I don't resort ad hominem arguments. That's what happens when lower IQ individuals have nothing else to say and don't know how to deal with the cognitive dissonance that arises when truth clashes with their feelings. Feelings based on cartoons and TV shows that programmed you to viscerally react that way.

Fair enough, its not quite the same thing. Though Home Depot has a ton of its own products now too - they are doing the same thing inside physical retail stores rather than online only.

For pharmacy items where there is some regulation around the quality of the product, I find generics/store brands to be great. For products that are not regulated in some way quality is all over the place. If you search Amazon for "ul listed usb charger" you will mostly see results for products that are not UL listed - there are probably 5 times more unlisted products for sale there than listed products - Amazon is pushing a bunch of cheap and high-profit crap at me even when I try to avoid it.

I tried to look for a decent priced backpack on Amazon a few months ago but there are a gazillion listings for what appears to be the same backpack, only the names differ. I ended up just buying it straight from Aliexpress from where it undoubtedly has been sourced from one of the same (or single?) factories. There's basically cheap-as-chips level products, and then 'high-grade' which is still dubious at times whether the quality of materials is better or not. Middle of the pack product pricing seems to just be swallowed up in a race for the bottom or the top.

Even worse, assuming the high-grade brand is better to begin with - are you buying the real thing, or a counterfeit?

The Amazon Basics products I've purchased have been of acceptable quality - and at least I know they're not counterfeit.

I can't really argue with that.

Tip- check out Fastenal. They don't tend to have small retail packages, so you need to buy larger quantities, but it's really nice not to have to wait for shipping. They're an industrial supplier, but all the stores I've been in were perfectly happy to sell to the general public.

If I place a McMaster order by 10:30am I get it the same day, if not its tomorrow. Easier than going to the store.

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