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Comment by abduhl | Hacker News Reader

What’s the problem here? If you don’t have a durable competitive advantage then you’re going to get eaten up. First movers should not get a license to continue to reap a profit in a competitive market absent real innovation, which would come in the form of reputation (trademark) or technology (patent). Drop shippers who can be displaced by Amazon in the way you discuss have neither. They already made a profit on the front end, so don’t feel bad for them just because they can’t continue to rent-seek.

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The anti-competitive bit is they have all the sales information that would typically be a trade secret for a company.

Go ahead, call up your local 7-11 and ask them what their sales were for the quarter. They'll tell you to fuck off.

But Amazon is the 7-11 (and more)! It is the customer facing part of the business that houses and delivers the beef jerky to the ultimate customer. 7-11 sees that jerky sells, that lots of brands can sell jerky, that consumers don’t seem to care about the brand of jerky as long as it says teriyaki, and so 7-11 now sells 7-11 basics teriyaki jerky.

The FBA middlemen are more like traveling salesmen - they take an order, send it in to HQ, and HQ ships it to the 7-11. They don’t do anything but take orders. They are Tom Smykowski - they take the plans to the engineers!

You’re complaining that the storefront that the goods are sold through has its own sales information. The amount of sales you have through Amazon may be a trade secret, but it is not a trade secret from Amazon.

But should barr them from selling a line of similar products.

If we're coming up with brick and mortar analogies, it's got to be grocery stores and generic branded items. Kraft Mac vs Great Value.

It's hard for me to say Amazon shouldn't be able to do it while every grocery store can, but there seems to be a quantitative difference because of the ridiculous number of options online vs the finite shelf space of a brick and mortar.

All the same economic games are played. Items are placed on specific shelves to drive specific sales, etc. Sale numbers are known by the store and they get their cut.

The distinguisher is supposed to be in the quality. Premium vs generic. That doesn't seem to play out healthily in Amazon's marketplace.

Maybe one difference is the consumable nature of the grocery products vs what one typically buys online (Amazon batteries as opposed to an animal carrier). Or maybe we have given up too much with the consolidation of grocery chains the last few decades and that is equally problematic.

I think that a lot of the same problems exist in generic brands at supermarkets. Supermarkets already have a lot of ways to pressure suppliers, and “own brand” products are weaponised extensively.

I’m all in favor of suppliers competing with each other, as that’s in the best interests of society overall. But when the platforms/marketplaces themselves participate in that competition they have tremendous advantages, which is anti-competitive, and it benefits no one but themselves.

But Amazon refuses to be the actual seller taking the risk in the first place. They aren’t buying jerky from anybody and then selling it. Until they decide to make their own based on the actual seller’s data.

Your local grocery store has store brands that compete with the name brands. Your local grocery store also charges for shelf placement.

Amazon is actually more open than other stores about this information, giving product rankings so that you could decide to knock off popular products too.

Also, in direct response to the Gp, grocery stores buy sales data that contains their sales + their direct competitors down to the product level. It is anonymoized but freely available.

Edit: Also companies like Google scan emails for information. Amazon stopped including prices in their emails because Google was getting a direction stream of sales data with full costing info.

Except that overlooks Amazons intentionally messed up search function. Amazon, unlike grocery stores, doesn't really put all of the items into the same location.

On amazon, if you want to browse "electric bike tires with motors" you will have to browse through dozens of full electric bikes, electric scooters, hoverboards, tires without motors, tricycles, and all sorts of close but not quite what you're looking for items to find 1 that you might be interested in.

Want to price shop them? Good luck finding others to compare with.

It would be like looking for a 5 lb bag of white sugar in the grocery store so you go to the sugar isle and finding 1 half pound bag of brown sugar amongst all of the flour and seasonings and honey and agave nectar and sweet n low in the first 100 feet.

Any grocery store organized like that would fail and be replaced by a company with decent organizational flow.

But amazon makes money by charging the vendors on its market for visibility, in addition to listing fees, storage fees, and whatever else.

Amazon has a perverse incentive to not show you, the customer, what you are looking for when there is anything else close enough to what you are looking for that they will make more money for selling to you.

There isn't a better word than evil for this, even if it is the benign sort of evil that only added to the chaos and misery of the world without directly harming anyone.

They aren't being eaten because of innovation, they are being eaten because of monopolization.

The person you are responding to was saying that dropshippers are being eaten because the products they are selling lack innovation.

For example, Amazon cannot swoop in and sell a cheaper Amazon Basics version of a product to which you own a critical patent.

I'm aware.

They are really saying, though, that without barriers to entry and in a competitive market, players that don't innovate don't survive.

>First movers should not get a license to continue to reap a profit in a competitive market absent real innovation, which would come in the form of reputation (trademark) or technology (patent).

The problem with that is that this is not a competitive market, so the player that wins is not innovating, they just have market power because of their size.

But that is definitionly winning the competitive market. Amazon has a competitive advantage because they have the largest inventory and almost always the cheapest prices, or at least speedy delivery for a marginally increased cost.

That is the definition of winning a competitive market. The consumers win.

The FTC is arguing that Amazon is actually raising prices, so no, consumers don't win.

You don't need to have lower prices long term if you control the market.

But if you raise the products now you have the opportunity for others to re-enter the market since there is arbitrage room.

I get the argument, but it's a grim reaper strategy taught in econ 101. It's a well known strategy and completely valid.

Consumers win in the short term but lose in the long term. Except they can just consume different products or wait for someone to re-enter the market.

But they do, right? At the very least they turn a blind eye to the countless counterfeiters.

The problem is being both the platform and a competitor.

They have an inside advantage that no one else on the planet outside of ebay and Alibaba (and its ilk) have.

It entrenches them and enriches them unjustly. They make profit off of their competitors and have the option of destroying anyone who rubs them the wrong way without repercussion. The capitalistic market cannot speak on the matter as there is a monoposonistic gatekeeper on the market path.

They started out as the competitor. They have always been that. They opened up their capabilities to competitors. They didn't have to.

They didn't open their capabilities to competitors. That is completely false.

No one who sells on Amazon is a competitor. If you are selling on Amazon you are a customer, and every once in a while, Amazon comes in and starts selling your goods for less than you can because they decided they would make more money without you in the picture.

For a little proof, try to find Ammoon products on Amazon. They used to be everywhere. And the information isn't exactly public but there was a falling out between Ammoon and Amazon and now you can't buy Ammoon products on Amazon, but you can find Lekato and Sumimma and Joyo and Cuvave knock offs of the exact same products, and not long after this happened, Amazon started selling cheap guitar pedals under their Amazon Basics brand.

You may say, sure, whatever, but the primary product Ammoon sold was the cheapest ($35) looper pedal on the market.

Amazon undercut that price (to $26.50) and also booted their closest competitor and biggest customer in the guitar pedal looper segment.

Who would defend that kind of scummy action?

In an enormous number of cases Amazon both sells products and the same exact product from a different supplier, and they sold the product before opening up the store to others. That's the definition of a competitor.

The fact that they didn't sell every single product on planet earth doesn't mean they aren't a competitor. They are practically in the "easy to manufacture by a third party in china consumer products" market. If a company adds so little value that Amazon's 5th rate people (The best minds at Amazon aren't sitting up at night worrying about the guitar pedal looper market) can beat them, they aren't adding value. And, one single distribution channel (the amazon website) doesn't define a market (with almost zero exceptions, amazon's website not being one).

> And, one single distribution channel (the amazon website) doesn't define a market (with almost zero exceptions, amazon's website not being one).

if amazon captures a large ratio of people buying goods online, i would certainly consider amazon itself a market. But unless they also control some other aspect of the online market, it would be hard to claim they're a monopoly tbh.

_Anyone_ can setup an e-commerce site and sell online. Amazon doesn't quite fully control the hosting, IP and backend servers completely!

Where's the harm for consumers here? All I see is that I can now buy guitar pedals for a fraction of the price. Isn't consumer harm the point of anti trust?

Shortsightedness is the harm.

How many companies will not enter the market because of Amazon's monopoly? How many products will never get invented because of the awareness of the system?

And even with this, with a monopoly it is not a race to the bottom. Once the monopoly is in place, you can raise the costs to whatever you want and the market has no choice but to grin and bear it or go without.

Monopolies are never good for the consumer.

To me this sounds like competition driving down prices, which is great for consumers.

Amazon is the rent seeker here.

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