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Comment by epistasis | Hacker News Reader

> Amazon sees what products are successful and profitable, then makes knock-offs which they promote over the originals. And now, reading into this, Google is manipulating their ad markets using inside knowledge.

This is nothing new, as brick and mortar retailers have store brands for popular products as well.

While I'm glad that the move to the internet lets us reevaluate some of the social relations, I have a reeeeaaaaal hard time finding any way that this sort of thing harms consumers.

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This is a tired argument.

Amazon doesn’t work like a supermarket: a closer analogy would be a shopping mall also providing cash registers to the stores. Amazon doesn’t buy from the producers nor act as a distributor on most transactions. The risk is all externalized, and they face minimal penalty (no loss of shell space, no stocking risk) by having their product alongside the original one.

It's a difficult argument, but perhaps one on quality could be made (IANAL and maybe talking out my ASS). By having Amazon promote their lesser-quality-but-supposed-same-product the consumer is being hurt. I argue this as I have spent too much on Amazon Basics. One specific case, USB cables, I had to go buy am alternate brand of the same product soon thereafter.

Agreed that this will happen, but I also think this is exactly the same thing that's expected of store brands: cheaper, but could be of lower quality.

The Amazon brands I see as the ONE product they should (in theory) never allow co-mingling on and thus the safe one to buy for a known quality.

Maybe it was never right that those stores were also doing that.

There's also a matter of the level of dominance that the platform has. Something like half of e-commerce takes place on Amazon; most online ads are via Google; and Apple literally invented the name "App Store".

As for consumer harm, when the market is manipulated to remove competition, we are all harmed. Not today, not directly, but every day after that.

I think the solution is two fold: 1) strong anti-monopoly law, and 2) holding brick and mortar retailers to the same standard that we apply to online retailers.

I think that you'll find that most grocery retailers have nearly as large a monopoly inside their geographic area as Amazon does in the retail space.

"This is nothing new, as brick and mortar retailers have store brands for popular products as well".

The analogy seems spurious to me. Do brick and mortar retailers charge other brands for being a market-place ? Don't they actually buy products of other brands ?

Some super markets carry your favorite brand of frozen chicken nuggets, others do not. Makes me think there are agreements between producers and retailers and that those agreements are all about money.

I bet there are clauses in those agreements that state that the retailer should "make my brand of ketchup the first brand that customers see" and that they cater to that clause "for a small fee".

In the UK, the big supermarket Tesco were criticised heavily for how they charged their suppliers for various things: https://www.theguardian.com/business/2015/mar/30/tesco-reduc...

Surprisingly no (or at least not always). Think for example of the displays of idk, stacks of holiday branded coke near the entrance of Walmart. Coca cola pays Walmart for that space and a coke employee likely puts the product there.

Joe's corner store and Walmart work differently, only one negotiates brand deals.

Yes, this is the crucial difference

Brick and mortar stores are dealers, Amazon is a broker. Dealers have inventories - they purchase items from the suppliers and resell them - if they misjudge demand, they're left off with useless goods. Brokers simply facilitate a transaction between two parties - there's no risk involved. The fact that brokers get to charge a higher mark-up than dealers is just bizarre

> Dealers have inventories - they purchase items from the suppliers and resell them - if they misjudge demand, they're left off with useless goods.

Everything is negotiable. If a retailer has more power than a supplier, then the retailer can demand a guaranteed sale clause in the contract, requiring the supplier to take back unsold goods and refund them.

https://www.comcapfactoring.com/blog/walmart-vendor-financin...

https://factor-this.com/walmart-supplier-financing/

The major brick and mortar stores are not solely dealers, they often have various deals where they sell items on consignment and do not pay for inventory until after they're sold, require payment for "shelf space", etc. That's transparent from a customer perspective, but from a supplier viewpoint they're often quite close to brokers in practice.

The consignment model and paying for shelf space are the exception in retail though, not the rule.

They tend to exist only where there is a huge asymmetry in power between retailer (usually large chains) and suppliers.

Isn't most of retail done by large chains with a huge asymmetry in power?

Depends on (1) what country/region you live in and (2) what brand you're talking about. For example: Yes, Safeway may be huge, but so is Procter and Gamble. Is there an asymmetry there? I'm not sure.

Anyways, large chains don't deal exclusively in consignment either.

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