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Comment by evrydayhustling | Hacker News Reader

You're getting hammered about the market competition being good for consumers. But even on the labor side, these two aren't the same: Walmart minimum wage is $12 / hour, Amazon just went up to $18.

Conversely, the "that's a market" folks should deep read the article's last bit on how hard it is to be an "Anti Amazon Alliance" e-tailer. Amazon is piling up previously uncorrelated strategic advantages, so that you have to be an expert in way too many things for a small company to compete.

- demand sourcing

- warehousing

- last mile logistics

- defect management

- now, freight forwarding

I think their innovation in these areas is amazing and will some day benefit everyone, but it will eventually take a new type of antitrust (which recognizes cross-leveraging monopolies for efficiency) to keep Amazon from retaining all of the value generated.

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> Amazon just went up to $18

Except isn't there a gigantic loophole related to, uhhh, lots of "Amazon" workers actually being employed by subcontractors rather than by Amazon.com Inc., to whom this minimum does not apply?

You mean small mom and pop businesses?

The kinds of businesses they're subcontracting to aren't "mom & pop" in the sense that's generally used to mean. They're remora: they exist to feed off of the scraps Amazon drops.

There are certainly loopholes for them, Walmart, and every other retailer. However, the $18 applies to over 100k jobs [1], so it's not meaningless.

I'm not saying that the labor market is cartel-free, but Amazon is legit a step up from Walmart (at 65+ P/E they can afford to be).

[1] https://www.cbsnews.com/news/amazon-18-dollars-hour-starting...

The drivers are contractors, but the warehouse employees aren't

Amazon has almost 1.5 million employees, most of them are warehouse and transportation staff.

Some means of firewalling the retail and the fulfillment parts whether by a breakup or not is probably going to be an antitrust policy I'd support, yeah.

Similar (albeit only somewhat) to British Telecom being forced to firewall its telecoms infrastructure from its directly-sold telecoms services a long time back, which was a huge improvement for (among other things) competition in the UK DSL market.

You need to believe that retailers are complete potatoes if they can't do that. If you can't do such basics, you will sink as a businessman long before Amazon, or anything.

This however may well be the case.

I will take that American business is very pampered, living off very protected business environment, and world's richest consumers. It's hard to not to make money here.

Retailers of all sizes can do those things. But go ahead, start an e-commerce business, and implement those things without Amazon or Shopify. Have a couple of good quarters, dish out for some marketing to speed up your growth. Then, watch the look-alike product appear on Amazon at a price 15% below your unit costs, because they do everything on the list more efficiently, didn't have to ramp up processes or prove their market, and are still on the part of the growth curve where Amazon supplies them at cost. Survive until the holidays and bulk up your inventory for black friday spending, then get swamped in chargebacks because your Amazon-platformed competition undercut your prices with a bundle deal including stuff you don't sell. Cheer up though -- if your product is really great, you'll get to see that competitor displaced by an Amazon Basics brand a few weeks later. America's rich customers and friendly government were not for you.

You've painted an accurate picture.

At the end of that process, you have a situation where:

* Amazon wins

* The consumer wins (they get the product they wanted all along, at the best possible price, with the best possible shipping)

* The original Amazon retailer semi-wins (they got a "free" burst of profit for 6 ~ 24 months before they had to switch categories when Amazon stole their category)

* The original non-Amazon retailer loses (they got outcompeted by a giant of scale, possibly overall losing money)

Does the consumer even really win? Once Amazon/whoever has a monopoly, they get to decide when and how to innovate, and the prices. Is the product now as good and as cheap as it could have been with more competition? Their PR and lawyers will say “yes” and who can prove otherwise?

Agree with these outcomes in the short term. Amazon is at a point in its trajectory where it is still genuinely innovating in order to build dominance, and that is creating a surplus that can be shared with consumers and platform participants. It has stayed at that point -- which Bezos calls "day 0" -- for an amazingly long time!

On the inevitable "day 1", Amazon will start coasting on its structural dominance and being net-extractive from consumers and platform participants. At that point they will be ripe for disruption themselves... but if their dominance has eroded previously healthy markets (for demand acquisition, warehousing, last mile logistics, etc.), they might spend longer in senescence than they did improving things. That's why I think antitrust is a good tool, that should eventually be applied to catalyze fresh growth.

> Amazon is at a point in its trajectory where it is still genuinely innovating in order to build dominance,

There is really nothing innovative about Amazon, really nothing. It's a web hosting company, and a huge internet shop. That's all to it.

If we measure "innovation" by solving hard CS problems, sure.

But one definition of innovation is:

> make changes in something established, especially by introducing new methods, ideas, or products.

Focussing on the eComm side:

Amazon made and continues to make changes in how people find stuff, pay for stuff, and get stuff. Even something as seemingly simple as Amazon Prime for free+fast shipping. Or keeping a credit card on file and jumping straight to "checkout complete" first, and letting the user modify shipping/billing details for a while after the order is "complete".

None of it was invented at Amazon and all of it is trivial to implement on a small or perhaps medium scale.

Amazon's innovation is implementing Amazon.

I don't you understand you at all.

Amazon's own markups are huge. Half the times, Amazon's stuff costs more than at upmarket conventional retailers. I fail to understand how people don't see it.

Well the Chinese knock offs usually appear way before the Amazon basics one (I agree the gap here is shrinking).

So assume Amazon gets ‘taken care’ of magically - what’s the solution for the bigger problem here?

Unless we go back to a world of strong nationalistic sentiment where customers are willing to put their money towards’Made in USA’ - I don’t know how this gets solved. Bezos famously said ‘nobody wants to pay more for a thing’ (paraphrase).

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