Comment by nostromo | Hacker News Reader

Comment by nostromo | Hacker News Reader

This is a difficult space.

I started a similar company, Shopobot. We launched, raised, got good press. Things looked great!

Shortly after we watched as Decide and Priceonomics launched.

After months of beating our head against the wall, we came to the conclusion that we weren't competing against Decide and Priceonomics. We were competing against Amazon.

Everyone we talked to loved the idea. But we found their praise didn't turn into clicks. We'd ask them why, and they'd always say, "oh, I just went to Amazon."

One day our lead dev was telling me about a recent purchase and I asked him if he used our site to find a good price. "No, I just used Amazon. I have Prime." That's when I knew we were fucked. Competing against Amazon without a really really strong value prop is not easy.

We've long since pivoted, Decide shut down, and now Priceonomics is perhaps pivoting. I think CamelCamelCamel is still at it! After all the VC money flushed out, the bootstrapper is still standing. :)

This reminds me, I have a long blog post to finish about how comparison shopping and price guides are difficult to pull off.

Amazon Prime is brutal to compete against. I'm averaging around 100 orders from Amazon a year (based on their order stats for my account), and almost whenever I do a search, I tick the Prime search restriction. I know it often means I pay more, but 90% of my purchases are impulsive purchases of the "I want this yesterday" kind where Amazon is competing against brick and mortar stores by me not having to go to a shop, and knowing I'll still have it the following day, and where other online sources don't enter into the picture at all.

The exceptions, where I don't go straight to Amazon, are very specific, and are a handful of vendors that ship as quickly as Amazon and that I go to for specific ranges of products (e.g. my supplements).

The only times I'll comparison shop, and where Prime doesn't come into it at all, is for really big items. E.g. my TV (but the TV before that was from Amazon...). My last laptop (but the two before that were from Amazon).

There's still a lot of value for pricing intelligence (see current #3 post talking about Amazon's Fulfillment-By-Amazon product) in arbitrage. The "shipped by amazon" has an immense amount of weight. It's pretty straightforward to acquire products (even from amazon 3rd party sellers), relist on amazon with FBA/prime/etc logos and profit.

Although Amazon has started it to do it themselves directly via "Amazon Warehouse Deals" -- http://www.amazon.com/b?node=1267877011 -- They'll actually purchase other seller's underpriced inventory and relist it themselves for a tidy profit. Especially easy when it's sitting in their warehouse already in a box.

This is a great "anecdote" (I don't have a better word...). It's easy to imagine someone finding cheap goods, setting himself up with fulfillment by amazon, and setting a price, and then Amazon deciding his price is wrong, buying his stuff, and relisting it (after all, it's already catalogued in their warehouse) themselves.

I don't think anyone thinks such behavior would be morally alarming... but that's certainly a common perspective when it comes to high-frequency stock trading. What makes the difference?

I doubt the seller would mind. Amazon could have not bought it and let the seller hold onto the inventory longer. Amazon buying it from the seller brings the seller profit from future to now.

I don't understand how I provoked this response, but just for the record, I agree with the entire text of your comment?

I agreed with your comment and further elaborated why "I don't think anyone thinks such behavior would be morally alarming".

1. Normal people don't have access to HFT equipment, giving a handful of corporations an edge over the rest of us. 2. Most people really don't understand HFT.

I think #2 is actually the real reason people are up in arms about HFT, honestly. It's new, scary, and allows corporations to extract money seemingly from nowhere.

I'm with you on the reasoning, but I hate the logic of

1. I don't understand phenomenon X

Therefore,

2. Phenomenon X must be stopped

To your point #1 in particular, it's true that normal people don't have access to HFT equipment, but they also don't own warehouses full of third-party goods (and would find those probably more difficult to obtain), so it's hard to explain in those terms why Amazon's hypothetical maneuver is different from HFT.

I think the "extract money seemingly from nowhere" might be the operative part here - one thing that almost everyone shares is an instinctive understanding that money does not come from nowhere. In the absence of further information, many will be suspicious that it's probably coming from themselves.

Google killed off comparison sites from the top of searches, if you can't find the comparison site it might as well not exist (or if it does it is spending tons on adwords to still be found).

search compare prices on bikes brings up no comparison sites

search compare prices on laptops brings up 2 comparison sites (one result per site)

search compare prices on watches brings up 3 comparison sites (one result per site)

search compare prices on software brings up 2 comparison sites (one result per site)

Problem is comparison sites spam the search engine listings pretty hard. It's only a matter of time before Google decides to do something about it...

Semantics3 (YC W13) gives you access to similar pricing data, but across several web retailers [1]. They seem to have a slightly different take: being a data API rather than a standalone website for product tracking and discovery.

[1] https://www.semantics3.com/

> After all the VC money flushed out, the bootstrapper is still standing. :)

Generally, the bootstrapper focuses on building a sustainable business early on (whereas the VC-funded startups try until the wellspring dries up)

Everything I can buy on Amazon, I buy on Amazon; everything I can buy "Prime + actually sold by Amazon", I buy this way, even if it's a little more expensive, because I know it will arrive on time no matter what, and I can return it with zero hassle.

There may be a micro niche of price comparison within Amazon, because some rare / specific products are sometimes sold at wildly different prices on Amazon (and listed many times; not just different prices under the same listing).

And of course Amazon's search engine is completely broken; an actual product search, limited to Amazon, that worked would add tremendous value.

Coming from Australia, we've never had much exposure to Amazon, which leaves a ton of opportunity for price comparison websites.

Personally, I'd find it a pain if a price comparison website diverged from their core search offering. Sites like [1]PriceGeek still have price comparison front and centre - much more useful for me as a consumer who can't tap into the benefit that Amazon provides.

There's still room for price comparison, just maybe outside of the US.

[1] http://thepricegeek.com

Have a question regarding competitive analyses before creating a startup. Since this seems to be an issue of doing competitive analyses about your market, how do you and other startups go about doing research about competitors?

Ecmmerce is a normal thing these days, so we tend to consider it more or less functional. But realistically, its still pretty broken. Checkout processes (including amazon's) are all different and most are clunky. The best way to tell what shipping will cost is to do a mock purchase. Amazon makes you choose shipping option before u see the price. You don t know hw long it will take. You need to give them your cc details.

Just using amazon for all purchases makes it all a little easier.

I'm building Shoptimate.com [1] and I'm in Europe. Amazon isn't as huge as in the US (and the multiple local Amazon sort of compete with each other).

But I also gave up on the website to build a browser extension. Shoptimate is bootstrapped and mainly active in Europe so I can execute more slowly and without the pressure of VC-money. But even then, it's a tough space.

[1] http://www.shoptimate.com

You should write that post! I would love to read it.

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