Amazon Execs Discuss Ditching Amazon Basics To Appease Regulators (vox.com) 76
In an effort to settle accusations by regulators that the company engages in anti-competitive behavior, Amazon leaders have discussed abandoning its private-label "Amazon Basics" business altogether. This follows previously reported concessions including giving more visibility to listings from multiple sellers for a given product to prohibiting the company from using any non-public data from Amazon sellers to boost the company's own retail business. Recode reports: At least as recently as last year, several top Amazon executives, including its current worldwide retail CEO Doug Herrington and its general counsel David Zapolsky, expressed a willingness to make this different but significant change if it meant avoiding potentially harsh remedies resulting from government investigations in the US or abroad, according to a source with knowledge of the discussions.
Amazon's private-label business includes homegrown brands like Amazon Basics, which sells everything from garbage bags to batteries to office chairs, as well as the clothing line Amazon Essentials. The business line also includes brands that don't carry the Amazon name, such as the paper-goods label Presto, the food brand Happy Belly, and the fashion line Goodthreads. Such a concession would not apply to the company's own gadget lines, including Kindle, Echo, and Fire TV devices. Amazon's use of private-label brands has come under fire from politicians and regulators not merely because they exist, but because of the data Amazon leverages to create them and the tactics it uses to favor them in search results on its shopping website and app.
"There was a strong consensus that this could be a viable option if the company was ever pressed into a position where it had to negotiate a settlement," the source told Recode. This person requested anonymity because they were not authorized to disclose internal discussions. [...] The conversations at Amazon around abandoning its private labels occurred on and off for several years as scrutiny of the business line heightened, the source said, with executives expressing a desire to keep this potential remedy under wraps so that it could come across to regulators as a major concession. Leaders in favor of such a decision believed that Amazon had a right to sell private-label brands as many retailers do, but that the business was not strategically crucial enough to defend in the face of more severe potential remedies sought by antitrust enforcers. When a company like Amazon offers such a concession, it does so with the hope of closing down any current investigations. Amazon spokesperson Betsy Harden denies the report, saying the company continues "to invest in this area, just as our many retail competitors have done for decades and continue to do today."
Amazon's private-label business includes homegrown brands like Amazon Basics, which sells everything from garbage bags to batteries to office chairs, as well as the clothing line Amazon Essentials. The business line also includes brands that don't carry the Amazon name, such as the paper-goods label Presto, the food brand Happy Belly, and the fashion line Goodthreads. Such a concession would not apply to the company's own gadget lines, including Kindle, Echo, and Fire TV devices. Amazon's use of private-label brands has come under fire from politicians and regulators not merely because they exist, but because of the data Amazon leverages to create them and the tactics it uses to favor them in search results on its shopping website and app.
"There was a strong consensus that this could be a viable option if the company was ever pressed into a position where it had to negotiate a settlement," the source told Recode. This person requested anonymity because they were not authorized to disclose internal discussions. [...] The conversations at Amazon around abandoning its private labels occurred on and off for several years as scrutiny of the business line heightened, the source said, with executives expressing a desire to keep this potential remedy under wraps so that it could come across to regulators as a major concession. Leaders in favor of such a decision believed that Amazon had a right to sell private-label brands as many retailers do, but that the business was not strategically crucial enough to defend in the face of more severe potential remedies sought by antitrust enforcers. When a company like Amazon offers such a concession, it does so with the hope of closing down any current investigations. Amazon spokesperson Betsy Harden denies the report, saying the company continues "to invest in this area, just as our many retail competitors have done for decades and continue to do today."
Walmart.com has the same issue (Score:5, Interesting)
Walmart.com features many third-party sellers, and competes with them with its own "Great Value" and other store brands.
Re: Walmart.com has the same issue (Score:3)
Re: Walmart.com has the same issue (Score:4, Funny)
Re: Walmart.com has the same issue (Score:3)
Soda has water in it. Duh!!
Re: Walmart.com has the same issue (Score:2)
Re: Walmart.com has the same issue (Score:1)
Re: Walmart.com has the same issue (Score:4, Funny)
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Taste depends on bottling factory water quality. Water hardness for example is very region dependent and has noticeable taste difference to most people.
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The cola tastes better than the locally bottled coca cola (why does the taste varies by region?).
Because it's made with local water, inadequately processed — if the goal is uniformity, anyway. The varying mineral content of the water will affect the final product. We know the mineral content will vary because they're not distilling the water, and filtering only removes particulate and not fully dissolved material (and anything attracted to a carbon filter, like chlorine.)
The only other soda brand I like is the locally bottled Pepsi
Get out.
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Walmart.com features many third-party sellers, and competes with them with its own "Great Value" and other store brands.
Indeed. For example, I actually like their Great Value Kettle-Cooked Jalapeno Potato chips ($1.66/8oz bag) better than (or, at least, as much as) either of the corresponding Lay's ($2.50/8oz) or Kettle Brand ($2.98/8oz) chips.
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A lot of stores have their own white-label versions of popular products and it's fine.
The problem with Amazon it seems is that a) it's mostly rebadged shit from alibaba and b) they promote it over third-party options.
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Re: Walmart.com has the same issue (Score:2)
Dryhole brand pliers
Made by Chrome Vanadium steal. Pliers have batch driver for 1/4 size hex batch. Very quality tool.
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The thing is that if this ditching is done in accordance with a deal made with regulators that specifically bans amazon from competing with sellers, doing what you're suggesting would likely carry heavier penalties than just anti-monopoly measures. Because that would be a contractual violation on the agreement that amazon agreed to.
That's how execs actually do end up going to prison. Which is why it's generally not done. That said, there's an obvious chance that agreement on this issue would not incorporate
Re:Walmart.com has the same issue (Score:4, Interesting)
A lot of stores have their own white-label versions of popular products and it's fine.
The problem with Amazon it seems is that a) it's mostly rebadged shit from alibaba and b) they promote it over third-party options.
And how is that different from "onn." (Walmart's house brand for cheap rebadged electronics)?
Oh, yeah. Amazon is an Internet company, and "Big Tech Bad."
Sorry, but ditching Amazon Basics is bulls**t. Amazon Basics is the one thing making Amazon's site even slightly tolerable for buying electronics, because their products are at least less horrible than the steaming pile of garbage from all the no-name rebadgers who just change their name every time someone points out that their products catch fire or whatever.
If they're going to go after house brands, they need to go after house brands evenhandedly, including Walmart, Safeway, etc., because they all promote their house brands more than name brands, and they do that because they all make a higher profit margin off of their house brands.
The only real solution is to separate Amazon the marketplace from Amazon the bookstore/seller. As long as Amazon is both a marketplace and a seller, it will compete unfairly, and there's no real way to fix that with a company that has as much market power as Amazon. And frankly, the same is true for Walmart for the same reason.
But they won't do that. They'll do something that hurts consumers, like ditching the Amazon Basics brand, and then when people scream, they'll say, "See, customers don't want these restrictions," completely ignoring that the competition problem is not between Amazon and other manufacturers (most of whom have enough name recognition that the Amazon brand doesn't actually compete with them, the rest of whom are the steaming pile of crap that I mentioned earlier), but rather between Amazon and other *sellers*, which is not remotely the same thing. And they'll probably get away with it because most of the people regulating them are probably too technically illiterate to understand what they're pulling.
Re:Walmart.com has the same issue (Score:4, Insightful)
(It might be different in the US) in supermarkets, home brands are often an the bottom shelf, and they are rarely advertised. Expensive brands are pushed to the top shelf because that is where the sales are. (Like above the fold in newspapers were).
At least for Walmart, they often put their brands right next to the products that they compete with. If you go into the pharmacy section, for example, you'll see Equate brand acetaminophen right next to the Tylenol. And they're often out of the name-brand Tylenol. For things like soft drinks, they tend to have a whole top-to-bottom section from a given brand, and they have one of the sections, so it isn't *right* next to it, but it has equal prominence, assuming there's not some subtle difference caused by the name brand's section being slightly closer to the front of the store or something (but people come into the aisle from both ends, so this seems unlikely).
Placement of goods in the supermarket are based on many parameters like
make sure customers have to traverse as large parts of the store as possible to the the essentials, there are more eyeballs on the top shelves than the bottom, rebates from the brand to the store for placing their items on top shelf etc etc.
They do that a lot here, too, but it isn't the top shelf. It's the eye-level shelf. Nobody, and I mean nobody ever looks at the top shelf until they've looked everywhere else, including the bottom shelf and the nearest endcaps. :-D
Their own brand are to keep people in the store with a cheaper alternative and are usually put on the bottom shelf if their eyes go wandering for something cheaper.
Amazon seems to do he opposite and once people have found the product they want, amazon push their own alternative right in front of people instead of hiding it in the bottom as a last resort to get the sale.
On the flip side, at least in the electronics section (the only section that I'm actually familiar with), most of the products Amazon Basics pushes down are cheap junk sold under a hundred different names by a hundred different "companies", all of which just import the products in bulk from the manufacturer and rebadge them. The pushed down products mostly have no warranty to speak of and no customer service, and are either inferior to the Amazon Basics product or physically identical (made by the same manufacturer).
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Sorry, but ditching Amazon Basics is bulls**t. Amazon Basics is the one thing making Amazon's site even slightly tolerable for buying electronics, because their products are at least less horrible than the steaming pile of garbage from all the no-name rebadgers who just change their name every time someone points out that their products catch fire or whatever.
The only difference between one thing and the other is Amazon's return policy. The Amazon Basics products are all shit AFAICT, it's just shit you can return. If you buy that same garbage sold-by-amazon instead of by a third party seller, which is what Amazon Basics in fact is, then you will be able to return it when it fails whether it says Amazon Basics on it or not.
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Their cables are fine, at least from what I've seen. YMMV. In particular, their USB-to-lightning cables seem to be quite a bit more robust (heavier gauge wires) than the cheap stuff, or at least they were. I haven't bought any recently.
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I specifically called out walmart.com, since Walmart stores don't allow third-party merchants to use space on their shelves.
Also, Amazon has physical stores: https://www.amazon.com/find-yo... [amazon.com] though not nearly as many as Walmart.
The point is that walmart.com and amazon.com both function as marketplaces with many merchants, and both compete against those merchants in those marketplaces.
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Store brands are fine. Everyone does that.
Amazon is special because they can leverage all their collected data to find valuable niches to exploit. Some might call it "leveraging a monopoly to get an unfair advantage".
They are also particularly brazen about ripping off new, unique products. Again, they get a heads up on those by seeing what's new and suddenly selling well. Their position gives them a head start compared to the independent generic brands.
It's also telling that they're discussing this in t
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Exactly, that's the problem. Amazon sees a product doing well? They clone it and then make it #1 when you search for the item actually doing well, so people buy the cheap knockoff of the item they really wanted to buy.
I'm really not seeing this. Amazon Basics product are just that — basic. They're the sorts of things that people buy in large quantities from whoever makes them, and Amazon is one among at least a dozen companies that make most of those products, typically.
Also, the companies that are cloning the products are actually the manufacturers, who are typically in mainland China. Then, a bunch of random sellers create "companies" whose names are strings of random letters, import those white label products
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Store brands are fine...in a store. Walmart stores don't let third-party merchants rent space on their shelves. Amazon.com and Walmart.com are both marketplaces with many merchants, not merely a store.
There is also the matter of scale. If you are a mom-and-pop craft mall that leases space to a bunch of merchants, and you choose to "lease" space from yourself and sell some of your own wares, there's no problem with that. Your vendors can easily find another craft mall. But when you're so big that everybody H
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Amazon having its own brand is not exactly the problem, Amazon using trade secret algorithms to exert undue influence over a marketplace is. It makes it impossible for anyone, buyer or seller, to honestly evaluate the value of any product sold on Amazon, and any service sold by Amazon.
In short, if you are going to have your own brand, you should have to open your algorithms so as to prove you're not abusing your unique position in a marketplace.
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Except that Amazon is far from a monopoly. Walmart is, in fact, still the larger retailer twice over [oberlo.com] Amazon's sales. And no one is raising a fuss over the existence of their "equate" brand. And don't imagine for a second that Walmart doesn't also collect and track data about what they're selling and what would sell as an in-house brand. In fact, before Amazon came along, they were considered the gold standard in retail data-driven inventory management and just-in-time logistics.
This whole flap is nothin
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They aren't a monopoly in retail. It's their position between the customer and the seller, and the collection of data that gives them, that gives them a special position.
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It is a bit of a pity, but I think maybe Amazon should curtail the "private labels" of products that are produced "in the USA", but continue to do so for products that are imported with no domestic production.
The reason being, is that a lot of imported crap (particularly from asia, such as textiles) all come from the same place, and the "sellers" are just patsy's for garbage being sold. You can find these "drop ship" lists everywhere. So at least, if you buy the Amazon Basics version, you know you aren't bu
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I've bought quite a few "basics" from that brand. USB cables, batteries, velcro, wire, etc. Things that could cost a lot if I went with a name brand, but I don't really need high quality on. So far I haven't been disappointed by anyt of the Amazon Basics, and they've all been priced considerably lower than the others. A bit like shopping at WalMart. Same as I do when grocery shopping - a lot of the time I go for the store brand when I don't feel any pressing reason to go with a name brand. When I need
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If Amazon were simply an online store, it wouldn't be any kind of problem to offer a store brand.
Amazon is NOT just an online store, it's an online marketplace, which essentially leases out space to many merchants. Being the owner of the marketplace, Amazon has access to sales data from its merchants. It then picks the best sellers, relabels those products, and sells it in its own "booth" right in front of the vendor that was having success in the first place.
Amazon isn't just ANY marketplace, it's really t
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If Amazon were simply an online store, it wouldn't be any kind of problem to offer a store brand.
Amazon is NOT just an online store, it's an online marketplace, which essentially leases out space to many merchants.
Amazon is so many things that it is impossible to tease them apart. It's a warehouse/logistics company that leases space out to many merchants. It's a physical store. It's a company that buys products and sells them itself.
So is Walmart. They have Walmart Fulfillment Services (similar to Fulfilled By Amazon). They have third-party merchants selling things on their site. They have physical stores. They buy products and sell them directly, both in stores and on the website.
AFAIK, there are no major dif
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eBay's search follows many of the common "google search tricks". For whatever reason, Amazon just does multiple keyworkd, always with OR. So if you search for "blue knit sweater" you get all the things that are blue, plus all the things that are knit, plus all the sweaters. Which is almost never what you want. Instead of narrowing your search when you supply more keywords, it actually broadens your search.
I actually spoke with Amazon about t
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eBay's search follows many of the common "google search tricks". For whatever reason, Amazon just does multiple keyworkd, always with OR. So if you search for "blue knit sweater" you get all the things that are blue, plus all the things that are knit, plus all the sweaters. Which is almost never what you want. Instead of narrowing your search when you supply more keywords, it actually broadens your search.
I actually spoke with Amazon about this, and the rep I chatted with was aware that this was making searches more difficult for many users, but said it was working as intended, so it's not a bug, and not likely to change anytime soon.
Yeah, and this is why almost 100% of the time, I end up searching for products on Amazon using complex Google search queries with "site:amazon.com". Unfortunately, Walmart's search is just as bad as Amazon's. If anybody comes along and builds something similar that actually works and gets enough products on there to be worth using, I'll dump Amazon and Walmart faster than you can say "Your programmers are incompetent, and nobody has time for that bulls**t."
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Almost all major stores do this, globally. Both for single nation chains and multinationals. It's based on the same premise as well. Stores have access to data on customer habits, and they can adapt to those habits very quickly. In most cases this is done by copying a particularly successful product for less money. For example, does your store data show that a specific pasta product is more popular? Analyze the recipe, do something similar with minor tweaks to save on costs where customers are unlikely to m
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Of course many businesses do this. But those other businesses don't have the market power that Amazon and Walmart have. That matters.
Decide whether to be a seller or a marketplace (Score:2, Redundant)
The minute you do both, you are engaging in anticompetitive behavior, you are competing against other vendors who are trying to use your marketplace.
If you're a small seller, then who cares? But when you're Goliath, it matters a lot, but legally and ethically.
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The minute you do both, you are engaging in anticompetitive behavior, you are competing against other vendors who are trying to use your marketplace.
Does this need regulation? If they outcompete other sellers, then their marketplace fails.
If you're a small seller, then who cares? But when you're Goliath, it matters a lot, but legally and ethically.
Legally, I doubt 'store brands' are an abuse of market power. It's not even monopoly power, there are other online stores. There are also plenty of physical chains that do the same, like supermarkets.
Ethically? Maybe if you're morally opposed to capitalism.
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I don't think you understand the concept of anti-trust laws. Capitalism is great, when there are many competitors to choose from, and when there is good information that helps people find and choose them. But if you're so big and powerful that there are no real other choices, this is no longer a good kind of capitalism. Being a "monopoly" doesn't mean you're the only option. Rather, it means that you so dominate a market that other options are not on the same playing field.
There is some good reading on Wiki
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The main issue with monopolies are when they're price setters, instead of price takers. This means they can sell at a higher price because there aren't other available options.
Amazon:
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You're fixated on Amazon not being a "monopoly," which means there is only one significant player in the market. Antitrust law does not scrutinize only monopolies, but any market that is controlled by a small number of players. Walmart.com, ebay, and Amazon are probably the only three real players in the online marketplace, unless you are specialized (etsy). Nobody goes to shopify.com to find products, they aren't even in the same category of business. Sure, you can set up your own website, but who is going
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You're fixated on Amazon not being a "monopoly," which means there is only one significant player in the market.
I said Amazon 'does not have monopoly power' because I'm not 'fixated' on Amazon being the single seller.
Sure, you can set up your own website, but who is going to see it?
Anyone that uses Google or a comparison shopping website, and anyone that cares enough about a brand to go straight to the brand's website.
And not just that, but you can also buy stuff in the physical world, there are lots of competitors to Amazon.
Monopoly power is an issue when there aren't choices and competition. If Amazon turned off all 3rd party sales tomorrow, there would still be plenty of pla
Probably for the best (Score:4, Informative)
There is enough sketchy Chinese stuff on the site already (to be fair some of it can also be quite good) that Amazon doesn't need to throw it's hat in the ring. It's not Amazon Basics was a brand that was carefully curated to ensure quality, most of it is fine but are there products where Amazon Basics is the best in class or really excellent value, especially when compared to the other stuff for sale?
Seems like they have better luck with the product lines they can focus some effort into like Ring, Fire, Eero, Kindle (I don't really like any of these but seem to work well and peope like them) and their services.
Re:Probably for the best (Score:5, Insightful)
Consider batteries. The Amazon Basic batteries are half the price of the big name brands and about 80-90% as good. This is what I want, I will sacrifice the last 10% for saving 50%. I have ventured into to buying off-brand batteries. And now i have three piles of non-functional batteries. Some of the batteries I bought only lasted a week. I don't want to be in the battery evaluation business. So if the Amazon Basic batteries are removed, I guess I am going to be forced into paying much more for a slightly better, name brand product. This is not a good trade off for me. And it's not just batteries. I have had similar experiences trying to buy off brand cables. It is very difficult to differentiate mid-range goods from the junk. And of course the purveyors of junk work very hard to keep it that way.
Re: Probably for the best (Score:3)
Ooh good answer honestly I have heard their batteries are good. I am probably a bit spoiled as I can buy Costco batteries which are also good (supposedly white label Duracell).
Would be nice to know who their OEM is, it's not like there's an Amazon battery factory, someone has the same cells in a different wrapper I imagine.
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Consider batteries.
Consider using rechargeables.
Seriously, even the cheapest disposable batteries still end up costing more in the long run.
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Maybe they were considering rechargeables. I have some Amazon Basic NiMH batteries that are pretty good. I had some no name generics that died very young.
I have a point and shoot camera and a clock will not work with rechargeable batteries, they demand that extra 0.3 V.
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You're right but 40% of Americans live paycheck to paycheck and now with inflationary price increases it's worse than ever for capital investment.
I'm currently using Basics batteries with this alkaline charger:
https://amzn.to/3z6PfCP [amzn.to]
The display is TERRIBLE but the value is good.
I have a better charger for my Eneloops. I recommended Big Clive's teardown to folks who are on the fence about Eneloops.
PS most Basics I've bought have been below my expectations (cables, notebooks, paprika, garlic, etc.) but batte
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I'm all for generics, but Amazon seems to go out and get the absolute bottom tier for whatever product category they want to sell in.
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That is a Catch 22, everyone is going to complain when Amazon enters their segment.
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Literally the only traditional cells I buy are eneloops. Which raises an interesting point — can I trust that the only batteries I actually want to buy from Amazon are genuine, and not knockoffs? I used to get my eneloops at Costco, where I could be reasonably certain that they were the real thing, but now they are carrying Duracell disposables* so I have had to go farther afield.
* Am I the only one that's noticed that the stock at costco has gone in the toilet in the last few years? They've shifted t
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The difference between AmazonBasics and the generic Chinese tat on Amazon is that Amazon stands behind their house brand. I bought a USB 3 extension cable awhile back for an Elgato capture dongle before I realized it already included one in the box. Contacted Amazon to return their AmazonBasics extension cable and they just said "here's your refund, keep it".
Turns out my partner wanted to also do some streaming while playing GTA V with his friends, and the USB extension cord ended up being just the right
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I have noticed that myself. I have bought a number of AmazonBasics stuff, and although quality is "meh", it isn't garbage. It at least at some level of usability. The USB cables I bought have worked well for years in constant use, with zero issues.
Even if Amazon spins off the Amazon Basics concept to another company, it is nice to have a known decent house brand available.
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Cables. Their usb-a to lightning cables are far better and cheaper than Apple's. Also HDMI, usb-c, ethernet patch, 3.5mm audio. Y'know, the basics, just like it says on the tin.
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I don't have to mess with lightning cables because I'm not an Apple user, but I buy all that other stuff from Monoprice. Buying it from Amazon only makes sense if you have prime, which I usually don't (except for the one free month a year, which I use to get access to prime video — 1/12 of the year is plenty to see everything new I want to see.) The Monoprice cables are as good or better.
Oh sure (Score:2)
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Generic store brands are (usually) cheaper (Score:1)
So, while inflation is driving up the cost of damn near everything, their brilliant idea is to worry about companies not being able to make enough profit selling their shit on Amazon?
If your product has nothing to justify its higher price over a generic equivalent, than too bad, it's survival of the fittest. I'm not made of money and I regularly buy store brand/generic products whenever they represent a savings. Sorry, I'm not paying for your brand name and your advertising budget.
Re:Generic store brands are (usually) cheaper (Score:5, Insightful)
If it was only Amazon making some products and selling them, there would not be as much problem for them.
Amazon usually employs this tactic
1. Notice that some product is selling well
2. Copy it, sell it under the Amazon brand
3. Make the search promote the Amazon branded product, while pushing the original one further down..
And no, Amazon is not doing it to help you save money.
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Sounds to me like their search algorithm is the real offender here, not the fact that they have a house brand.
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Costco has Kirkland
Walmart has Sam's Choice (and a number of others)
Whole foods has 365
Wegmans has Wegmans
Safeway has Signature, Value Corner, Lucerne, etc.
CVS has CVS Health, Live Better, Goodline, Abound, etc.
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I do not know how it is in the US, but here the other products are not hidden behind the in-house branded ones in a physical store.
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How is this any different from any other company house brand/generic?
The difference, and I've shopped in all of those kinds of stores except a Wegmans so I can speak confidently, is that they literally put the house brand next to the name brand. And on the house brand it literally says "Compare to..." and then gives the name of the product it's sitting next to. Obviously they do this on the assumption that you're going to make your purchase decision based on a price comparison, and that most people who read the text will choose the cheaper product. But it also means that the
Purchasing on Amazon... (Score:2)
Purchasing on Amazon, I often used "amazon basics" as the baseline for whatever I'm buying. And a several times when I purchased Amazon Basics, I realized I was getting what I paid for--and it was many things like clothing, kitchen appliance, and so on.
Amazon could do a "amazon basics" where this is the theoretical baseline and allow a customer/patron to compare...for example when I bought some shirts, I wanted something that would last so durability would be the parameter. In short a "vaporware" product u
Every big store does it, brick and mortar too (Score:2)
How bout no? (Score:2)
I don't see the problem. (Score:3, Insightful)
Oh look! (Score:2)
Less choice for consumers is better for consumers...or something.
Making more money with less risk (Score:2)