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Comment by mabbo | Hacker News Reader

I keep trying to explain to people: they aren't "ads" they are "pay for customers to ever see your product". It's an extortion ring, basically.

Just like nobody ever opens page 2 of Google search, people rarely scroll down very far on Amazon's product search page. These "ads" just put the highest bidders' products at the top-K spots (and K keeps increasing) so that customers aren't see the most relevant products, just the ones who paid the most money.

Amazon spent 20+ years building customer trust. Now it's reaping its reward by selling it off wholesale.

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The sentiment of it being an extortion ring is correct. However, it's not as simple as placing the highest bidders' product at the top-K spots, because it's not a true auction system; not anywhere close. Amazon runs an ML algo that attempts to determine the actual cost benefit of serving an ad, and does everything in its power to maximize the value of the underlying ecosystem. It applies weights to warehousing fees, shipping fees, CVR, CTR, referral fees, customer retention & satisfaction, LCV, LSV, loan interest, etc. It's not that relevance isn't a focus, but the considerations are complex and somewhat reliant on sellers' data inputs.

You could bid $100 on your own brand KWs and get charged $0.37/click while a competitor in the adjacent slot will get charged $25. You could bid $100 on a competitor's brand KW and never get an impression because the algo has determined your product is a complete waste of that virtual shelf space.

Strikes me as a well informed take.

I would think it’s like an auction for the things that don’t matter. For the most valuable brand KWs do you think the winner is randomly allowed to be determined by “the market”? Why not bring the brand to the table directly, and outside of the auction determine what they’ll have to pay.

To me, it seems like no company could keep their hands out of the cookie jar that is running an auction. Too much short term pressure to move things up and to the right. Amazing cash cow though.

I’ve reduced my usage of Amazon significantly since they made it near impossible to filter out 3rd party sellers.

I have no interest in eBay 2.0.

eBay? More like Aliexpress.

Agreed, the only thing I buy from them anymore are books because I know what I'm getting (that said, trying out Bookshop to support local bookstores but they're often more expensive)

that price difference is being externalized somehow, so, if it's possible (and of course it's not for everyone) it's best to just pay the higher price imo. it's better for society and the neighborhood

Yes. I've reduced my Amazon usage to zero, with no ill effects whatsoever.

It's intriguing how many marketplaces have adopted this model. There must be some short-term optimization occurring.

It's an easy way for them to become "the everything store" without risking anything but their brand (and in Amazon's case warehouse capacity).

It is similar to all the subscriptions for social networks now (snap, meta, twitter) that will boost your posts if you're a subscriber. The top posts will have X% of sponsored or boosted content and X will grow over time (to increase revenue).

You don't like it? Don't shop at Amazon!

oddly defensive of Amazon here. I think the criticism is warranted given that Amazon's core ecommerce product is a shadow of it's former self.

"It's an extortion ring... Now it's reaping its reward by selling [customer trust] off wholesale."

I think this is hyperbolic. In my experience, they continue to deliver great products at reasonable prices, especially given inflation. I can regularly find the same products cheaper on Amazon than local brick and mortar retailers, as well as online Walmart and other online venues. If this is selling off my trust, they can keep selling it.

I lean more towards your side as I'm still a Amazon Prime user of 10+ years.

They capture at easily 50% of the goods I purchase.

That said for me it's not because they compete on price or quality. its convenience being in an apartment building with the nearest big box everything store being 15-20 minutes drive from me.

My experience with Amazon is that the quality of their offerings and service have fallen significantly over the years, to the point where there is no longer any reason for me to use them.

So I don't.

>I can regularly find the same products cheaper on Amazon than local brick and mortar retailers, as well as online Walmart and other online venues.

Well duh, the Chinese gov subsidizes their products to crush American businesses. Amazon is apathetic because of exactly what you say. Price is all that matters.

I don't like it

I don't shop at Amazon

Why not? That sounds like cutting off your nose to spite your face! They usually have the best prices and fastest delivery. I'll just ignore the bits I don't like, and still shop there.

Voting with your wallet and criticizing immoral decisions made by a company (or person) are not mutually exclusive.

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