How is this different from Kroger getting to set the prices of both Lay’s and their store brand chips?
- Kroger isn't 50% of all grocery stores on earth
- Kroger paid money up front for your potato chips
- Kroger isn't charging you for storing your potato chips
1) But most supermarkets do this in similar ways. Not quite the same as a single entity, but close enough (more like a cartel?) that I'm not sure I see much of a difference.
2) This is the major difference in my mind, but other vendors can still sell for less, so I'm not sure how much competition is stiffled.
3) Well, they actually are. It's called slotting fees. They can simply be for warehouse storage and a place in the store, or at higher levels can be paid to have products placed in specific locations, e.g., eye-level on shelves. This seems similar to signing up for the program in the OP to have your product highlighted as an Amazon-sponsored product.
I don't like many of Amazon's practices, but I'm not convinced this particular one rises to anti-trust.
Well, slotting fees seem pretty close to that:
https://qz.com/807723/inside-the-secret-backroom-deals-big-b...
I agree, the Kroger Purchase Order is currently in bulk infrequently (e.g. 100units once a week), but the Amazon Purchase Order is currently not-bulk frequently (e.g. 1 unit 100 times a week).
Meanwhile, "Kroger makes no representation regarding the maintenance of any specific retail price for Products purchased for resale."[0]. As I understand it, that means it can change the price at any time. If in week 2, Kroger prefers a lower price, it can tell the seller "Last week was $22, but now I'll only buy the potato chips for $20 and no more. Do you still want to keep selling to Kroger?".
I don't see how this is materially different from the case about Amazon. Because the reality is no merchant cares about 1 bulk order, they only care about continuous re-orders.
[0] https://www.thekrogerco.com/wp-content/uploads/2017/09/kro_s...
That's not completely correct.
Kroger will charge you if you want an End Cap display of your chips, and Kroger will charge you if you want additional shelf space for your chips.
I believe it's more limited to things like Chips, Soda, Snacks, etc, but, it does happen in the grocery industry.
Not always. Products can be sold as "pay per scan," where the manufacturer maintains ownership up until the moment the barcode is scanned at checkout. The retail store then instantly purchases the product for an agreed-upon price and turns around to sell it to the consumer.