'Amazon Prime Is an Economy-Distorting Lie' (substack.com) 171
Matt Stoller, looking at this month's antitrust suit against Amazon filed by D.C. attorney general Karl Racine: To understand why, we have to start with the idea of free shipping. Free shipping is the God of online retail, so powerful that France actually banned the practice to protect its retail outlets. Free shipping is also the backbone of Prime. Amazon founder Jeff Bezos knew that the number one pain point for online buyers is shipping -- one third of shoppers abandon their carts when they see shipping charges. Bezos helped invent Prime for this reason, saying the point of Prime was to use free shipping "to draw a moat around our best customers." The goal was to get people used to buying from Amazon, knowing they wouldn't have to worry about shipping charges. Once Amazon had control of a large chunk of online retail customers, it could then begin dictating terms of sellers who needed to reach them.
This became clear as you read Racine's complaint. One of the most important sentences in the AG's argument is a quote from Bezos in 2015 where he alludes to this point. In discussing the firm's logistics service that is the bedrock of its free shipping promise, Fulfillment by Amazon (FBA), he said, "FBA is so important because it is glue that inextricably links Marketplace and Prime. Thanks to FBA, Marketplace and Prime are no longer two things. Their economics ... are now happily and deeply intertwined." Amazon wants people to see Prime, FBA, and Marketplace as one integrated mega-product, what Bezos likes to call "a flywheel," to disguise the actual monopolization at work. (Indeed, any time you hear the word "flywheel" relating to Amazon, replace it with "monopoly" and the sentence will make sense.)
This became clear as you read Racine's complaint. One of the most important sentences in the AG's argument is a quote from Bezos in 2015 where he alludes to this point. In discussing the firm's logistics service that is the bedrock of its free shipping promise, Fulfillment by Amazon (FBA), he said, "FBA is so important because it is glue that inextricably links Marketplace and Prime. Thanks to FBA, Marketplace and Prime are no longer two things. Their economics ... are now happily and deeply intertwined." Amazon wants people to see Prime, FBA, and Marketplace as one integrated mega-product, what Bezos likes to call "a flywheel," to disguise the actual monopolization at work. (Indeed, any time you hear the word "flywheel" relating to Amazon, replace it with "monopoly" and the sentence will make sense.)
because the shipping price.. (Score:2, Insightful)
who doesn't know this?
Re:because the shipping price.. (Score:5, Insightful)
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Amazon pays similar prices though, they have to get shipped to the local storage, then they have to pay the people who take gig jobs driving them, and pay for their special delivery trucks. And still, I can get cheaper prices outside of amazon (since I'm not prime and never will be).
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Me too, but only if a local shop carries the product , or if I spend 20-30 minutes shopping around online. I pay the extra dollar to be able to find and buy a product in a few minutes, and have it at my doorstep in 1-2 days. Convenience is well worth that extra dollar. And yeah, it's usually only that much of a difference, if any. High cost products are almost always cheaper on amazon.
Re:because the shipping price.. (Score:5, Insightful)
And still, I can get cheaper prices outside of amazon (since I'm not prime and never will be).
Sometimes, if I decide to put in the extra effort to search the Internet, I do find cheaper prices. But when I do, it's not by much and usually not worth the hassle.
But the thing about Amazon is not just that they frequently have the best prices, but that it's simply bloody convenient because it's a one-stop-shop that has absolutely everything on stock, and they also provide excellent customer service. Anything I order, I know I can print out the return form and ship it back for any reason - no discussions, no lengthy process. This makes Amazon purchasing not just very convenient but also risk-free.
I agree Amazon has a monopoly-like position and I don't like supporting that or making Bezos any richer than he already is, but what if the service they offer is actually so good that it beats all competition? Amazon just works - as much as I hate to say it, it's the best place to shop online for various reasons. Is it wrong to support a service that provides the best customer experience, even if it is a monopoly?
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"I think about the warehouse workers denied bathroom breaks and I reach for my keys and go get it at a brick and mortar."
Word. Wal-Mart would never treat its employees poorly.
What? no! (Score:5, Interesting)
Amazon pays similar prices though...
What? Not even close. My business buys its products from wholesale distributors. In fact, for those cases where Amazon has not graduated to buying directly from the manufacturer, Amazon buys the same products we sell from the very same distributors that we get them from. But, Amazon's retail price, including their overhead and shipping costs is LOWER than our wholesale price from the distributor. And often that's before additional shipping charges to get it from the distributor to ur or our customers.
Amazon's volume is so high that they get significantly better pricing from the distributor than anyone else, excluding a Walmart or similarly huge organization. And if the volume is sufficient, Amazon goes around the distributor as well and gets even better pricing directly from the manufacturer.
There is a tipping point in size or sales volume beyond which no one else can compete. The Amazon and Walmart are well past that tipping point in many or most cases.
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But shipping 1,000 items in bulk to a shop (probably via a shop chain distribution center) will be cheaper than shipping 1,000 items to 1,000 different locations (ie customer front doors).
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Cheaper for whom? I'm not buying 1,000 items at a time and couldn't care less what the shipping price for 1,000 is. If the total price to my front door is cheaper than the price at a retail store, Amazon wins.
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But there is a lot of time, cost and environmental savings having a truck with a 1000 items drive one loop around town instead of 1000 people making their own errand to the store.
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Except in practice, it seems to be 100 trucks driving around my nieghbourhood each delivering 10 items.
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That's the inefficiency caused by having competition..
The alternative is having a monopoly delivery service, that could in theory provide a faster and more efficient service for a lower cost. But in reality, they will price gouge you and provide a poor service because it would be more profitable and there wouldn't be any incentive not to.
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Mostly true, it would maybe also help if some deliveries were delayed. But then you run into impatient customers.
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But there is a lot of time, cost and environmental savings having a truck with a 1000 items drive one loop around town instead of 1000 people making their own errand to the store.
Unless, of course, the convenience causes people to buy things one at a time when they otherwise would have batched them up and gone to the store once per week. Then, it might actually be worse.
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Those 1000 items don't stay in the shop, shipping them to a shop doesn't complete the distribution chain it just passes on the cost of the last mile to the end customer.
Re:because the shipping price.. (Score:5, Insightful)
And the Amazon Prime subscription.
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And the Amazon Prime subscription.
Which includes other things besides shipping, like streaming ...
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Lazy (Score:3)
who doesn't know this?
The people to lazy to even compare the price over at eBay, AliExpress, your local most popular 2nd hand selling marketplace (depends on the country you're living in), etc. ?
If everything cost a few bucks more on Amazon (when comparing the total price (good+shipping) between several vendors), there isn't much a reason to shop there.
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If everything cost a few bucks more on Amazon (when comparing the total price (good+shipping) between several vendors), there isn't much a reason to shop there.
It doesn't; on average things are cheaper on Amazon. But a slight price premium might be worth it if the shopping experience is sufficiently better than other sites. Their search certainly isn't worth a shit, but then, many sites' search tools are even worse. Their selection is fairly impressive; probably nobody else can touch it, period. But if you're spending any significant amount, it's dumb not to make price comparisons.
In general I try pretty hard to avoid buying from Amazon, they have enough money alr
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You listed AliExpress in a comparison against Amazon? Look I love ordered stuff from Ali, but lets be real: there's a different between ordering a product that will be here in a day or two versus 5 to 6 weeks. Usually that time savings is more than worth the difference in price. There is the occasional doo-dad that I'm willing to wait the extremely long shipping times for but its a rarity.
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AliExpress is great for finding oddball electronic parts and the like, but at least if I want to order something from them in Germany, it takes weeks, not days, to arrive. Beyond that, as China and Germany don't have a cooperative customs union, it typically involves a round-trip out to the airport to manually clear customs formalities. I'll always prefer Amazon or a local supplier if there's an alternative. Amazon's convenience is in much more than just price competitiveness and 'free' shipping.
Re: Lazy (Score:2)
AliExpress is china Amazon.
eBay is used shit from a flea market. It might arrive and work or it might not. Either case you have zero recourse.
Re:because the shipping price.. (Score:4)
In the case of Amazon it's more complicated than that because they can force their sellers to practice the same price on all other marketplaces they operate in, including their own websites, hence making of Amazon Prime's system a classic monopoly case (not even a case involving novel interpretations, just the basic stuff really).
TFA explains this in details, how it objectively results in higher monopoly-based prices for everyone, not merely Amazon Prime subscribers, and how Bezos planned it as such as revealed in disclosed emails of his from years ago. Alas, as usual TFS quotes only part of what it should have quote to make the point actually understandable.
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Since we don't "charge" shipping on Amazon, we can't withhold shipping from a refund when 2 weeks later a customer wants to return the product because they "Changed My Mi
Comparisons (Score:5, Insightful)
I regularly buy one pound bags of citric acid. It's handy to clean out the dishwasher, clothes washer, and to make various cordials and mixed drinks. It's $8 shipped from Amazon. The only place remotely near me that sells one pound bags of citric acid is a restaurant supply store on the other side of town. The grocery store near me will sell me a small bottle of citric acid for $5. The restaurant supply store is only $1 or $2 cheaper, and Amazon saves me an hour trip across town. So, Amazon wins.
I was in the market for a new sprinkler controller, and Amazon's price was $40 more than the retail price directly from the manufacturer. I bought it from the manufacturer. So, Amazon looses.
Amazon's price on the shampoo I like is ridiculous, I buy that from the grocery store. Amazon's price on the furnace air filters I like is fantastic, compared to the home improvement stores I go to, so I buy those from Amazon.
It's not rocket science. Some stuff is just easier to buy and/or cheaper on Amazon. Some stuff isn't. It's not hard, nor a lot of work, to find out.
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That's not the issue here. The issue is that Prime is designed to lock customers in by making them pay for shipping up-front.
Once you are in for 8 bucks/month (or whatever it is in your country) you get "free" next day shipping on a lot of stuff. You might be able to get an item a few bucks cheaper somewhere else, but you are already in for 8 bucks and get "free" next day shipping from Amazon.
When you look at prices on other sites you tend to think of the Amazon next day shipping as free, even though it isn
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Customer lock in.. whatever you think of it... isn't a monopoly though. There's millions of lock in schemes from loyalty cards, loyalty points, discounts off your next purchase, coupons.
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"Monopoly" these days really just means something that breaks the market enough to be a social problem. Amazon Prime seems to qualify.
It seems to be fair comepetion (Score:3)
In my case, I pay far less. Free 2 hour grocery deliveries in exchange for £30/year (by having access to a
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In the UK stuff on Prime tends to have a price premium, on top of what you paid for Prime. The same item is usually available cheaper non-prime with longer shipping times.
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And noone is requiring that you use Prime. If you don't like their price on an item, order it from Sears. Or direct from the manufacturer. Or, God forbid, down at the local store.
The fact that you don't have to use Amazon Prime for a purchase since you can get the same product elsewhere is pretty much proof that it's not a monopoly.
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Citric acid fan high five!
No I'm not being sarcastic, I love the stuff and everyone thinks I'm weird.
My tip is to run a cycle of washing soda since It saponifies grease followed by a cycle of citric acid to remove limescale which the washing soda dumps out and other gunk. That combo leaves the dishwasher and all the filters astonishingly clean.
It's also a really good derusting agent, by the way. Also good for sugar work, you don't need to worry about religiously cleaning crystals off the pan sides, just add
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I tip my hat to people with the mental bandwidth to know how to... and schedule... upkeep of their appliances. That's about 20 levels down on my list of things I need to get in order.
Re:Comparisons (Score:4, Funny)
I tip my hat to people with the mental bandwidth to know how to... and schedule... upkeep of their appliances.
Schedule??
No basically I do it when it stops cleaning the dishes properly and looks kinda manky.
That's about 20 levels down on my list of things I need to get in order.
it comes way above washing up by hand.
Re:Comparisons (Score:5, Funny)
a cycle of citric acid to remove limescale
Citric acid to remove limescale sounds like it checks out. Presumably it also works on orangescale, grapefruitscale, and lemonscale.
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It only works on the mircantha derived varieties which rules out not only orange, lemon and grapefruit, but all varieties of pomelo and even kumquat.
Re:Comparisons (Score:5, Interesting)
I can already feel a "boo fest" coming from readers, but the way I see it is that we need to actually promote more sites like Amazon... and what I mean by like is that we need to promote Walmart.com and others to do the same thing. And we need to seriously do our best to make it in the best interest of internet shops to streamline operations and cut costs penny by penny and increase their margins penny by penny as optimization problems.
Before I get too carried away, I'm a chronic window shopper. I love walking through the mall and picking up crap I don't need, might never use and whatever just because I see it in the window. So, in my heart, I love local stores.
That said, I think the logistics of supplying local stores is going to destroy us.
Consider a chain like H&M. I live in Norway which is owned entirely by H&M. It would be entirely reasonable to suggest that 75% or more of Norwegians wear at least one article of clothing from H&M every day. There are 5 H&M stores with entirely overlapping inventory within a 4 block radius in the middle of the city. They're everywhere.
H&M never orders just the sizes which will sell, they stock stores with every size and every color and generally will make some adjustments for more of a more popular size, but when they first put items on a rack, they load the rack up. Last week, my wife was at work and her bra broke and she asked me to swing by H&M and get her a bra. She sent me the link to the web site and I went to the store and they had every model of every bra in every size and generally in multiples in case someone needed to buy 2 of the same size, style and color.
If H&M had rapid delivery... same day or within 2 hours for example within Oslo, they could store a single central inventory that would be far more optimized and could even move inventory between countries in the evenings. Basically, they could fine tune the logistics of their inventory for multiple cities or even countries. But they instead simply overproduce... to the degree that most African nations are refusing to take their left over stock anymore since it's just becoming landfill now.
I could go on about clothes, but that's not the worst of it.
Meat.
Every grocery store knows that they can charge more for "fresh meat" which is meat which after being delivered from the producer is defrosted and put in the fridge rather than being left frozen and put in the freezer. And even though stores are pretty good about presenting packages in a manor that makes the meat look like it's beautiful and in the company of other great meat, the truth is that every store knows that in order to sell a single package of meat, it can't be the last of its kind on the shelf. People always avoid that last package unless their grocery list specifically says "get THAT meat", so stores will always put at least a few more packages on the shelf they are entirely sure they can't/won't sell.
I don't know the specifics, but I'm pretty sure that a minimum of 30% of all meat defrosted by a store is disposed of by the store rather than purchased. I'm sure I've read that statistic (as well as more sensational ones) somewhere reliable.
If we were to pass laws mandating that meat could only be sold by online retailers, it would be a major step in the right direction.
See, you never look at the packaging of meat when ordering online. Rather, you see the idealized, perfect meat in the photo and you order from that. This means that the store can keep the meat frozen from the day the animal is slaughtered... all the way to the point that the meat is delivered to the customer.
It also means that if people are purchasing specific cuts of meat and there is a stock of other types of meat building up, algorithms can alter the prices of the other meats to make the more attractive to buy. They can also algorithmically update their wholesaler websites where companies who product products like sausages and pet foo
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Who knew Norway was owned by H&M? Did it cost them much?
With clothing, it costs them pennies to produce it, and they sell it for hundreds of percent markup. It might seem wasteful to stock everything, but it's more wasteful to have to ship stuff back and forward over town. Once you're in the store, you want it now, you want to try it on. If they had rapid delivery, that would basically be one more store to stock.
Who knew that people won't buy the last item of meat on the shelf? If I see the last item of
You're rational, though, most aren't. (Score:5, Insightful)
It's not rocket science. Some stuff is just easier to buy and/or cheaper on Amazon. Some stuff isn't. It's not hard, nor a lot of work, to find out.
Every person I know has Amazon Prime. Most people, including my wife, would rather just buy from Amazon than consider anyone else. It's very frustrating because it puts every good retailer at disadvantage. Most things sold by Target are cheaper than Amazon, but most of my highly technical and well educated coworkers are surprised when I tell them that. My local Microcenter sells computer gear for the same price to substantially cheaper...even with delivery. Home Depot is almost always cheaper. A great example is the shampoo you mentioned. My wife and every woman I know is so happy they can find their brand on Amazon...even thought it's also available at target for substantially cheaper.
Amazon has hacked the brains of a large portion of the educated workforce through genius strategy. Back when they weren't profitable, you'd have to be an idiot NOT to buy from them. EVERYTHING was cheaper. EVERYTHING was better. I remember buying tools for 2/3 the cost of Home Depot (same brand/model). Why? Amazon was burning through VC funding and propping up their unprofitable retail sector with AWS...then one day they decided to make a profit....while their competitors shaped up and lowered their prices. Now they're 5-10% more expensive for most things I buy...yet that's not common knowledge. This also happened like 3 months before Jeff Bezos became the richest man in the world. He played the long game masterfully...but now Amazon is a curse. He's making money hand over fist and investing it in automation moreso than anyone else, to my knowledge. I wouldn't be surprised if one day he just decides to lower prices again and kill off all his competitors.
Amazon is a company to be feared and scrutinized. They wield far more power than most of even know.
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It's very frustrating because it puts every good retailer at disadvantage.
I can recall several instances where I needed something quickly (e.g., a book, a router, etc.). And when I reached out to the local retailer(s), they told me they could order it for me. Sometimes to store, sometimes shipped to me (but always at a higher price than Amazon).
That's obviously a small number of data points, but they definitely cannot compete with Amazon if they are going to ship the item. For example, neither Target nor Staples (I checked several locations within walking distance) carry printe
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that amazon has a storefront still selling them is not surprising
this isnt amazons fault
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Depends on location - and the state of what we call in the UK "The high street." - brick and mortar shops.
I try to support my local shops - the few that there are - willingly spending a little more.
My local hardware store is one, but they rarely have exactly what I want, although they offer to "order it in" if I'm prepared to wait 2 weeks.
I can't buy clothes on my high street anymore - the department store closed.
There's no shoe shops.
There's no electronics shops.
The crazy thing is, the High Street where I
Loss leader (Score:2)
The interesting thing here is that when Amazon was shipping more with the USPS, i
Bad statistics imo (Score:5, Informative)
one third of shoppers abandon their carts when they see shipping charges
The only way to see shipping rates at 99% of the webstores out there is by adding something to your cart and starting a checkout. It's not like all these people are gung-ho about buying until they see the shipping. For me, it's "hmm, might be some interesting stuff here, let's see how expensive shipping is first, though".
And besides, one third of online retailers tack on extra charges to shipping. People know what a Priority Flat Rate padded envelope costs, and if you're charging $10+ to ship your little trinkets domestically they're going to know you're doing the same thing old-school eBayers would do before eBay cracked down on "handling" charges.
There's many things to criticize Amazon over, but trying to slam them for free shipping is definitely barking up the wrong tree. The real benefit of free shipping is instead of trying to min-max every order to make sure I'm getting my S&H worth, I can order what's on my mind at the moment and move on to the three billion things more fun and interesting than shopping for shit online, if I realize tomorrow that I also need something else, no big deal, just do a new order.
Re:Bad statistics imo (Score:5, Insightful)
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I recently bailed out of a Kickstarter because they announced (months after most people had pledged) that shipping was going to be $21. The product I pledged for was only $60 to begin with, and small enough to fit into a padded envelope. Shipping should have been $5, not $21.
It's sad when you think you get a good deal, but the company decides that "shipping costs" should be a profit center.
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If you think about it, for online shops, shipping you stuff is their ONLY profit center. They're not making widgets, their only role in life is being able to ship you crap, so it's the shipping they need to profit off... whether or not they itemize shipping on their price, that's the value add they're offering.
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I can order what's on my mind at the moment and move on
I also think everyone overlooks that until recently Amazon was the only one that would give you a precise estimate of when the item will arrive.
A few big retailers finally caught on that this is important. But in most stores, even now, a 2-day extra-cost shipping can easily mean 3 days or 5 days, depending on how long it takes to actually ship the item.
I dunno dude. (Score:2)
...Thats like libertarians saying that Government services are a lie.
While it's true that money changes hands to make it work - the concept of economy of scale is doing a lot of important work in cases like these.
That is - put up enough money up front to get people in place, an infrastructure humming - and it DOES become a disregarded cost, after the regular and much lower maintenence fees to keep it running - far less than the average shipping cost for most folks.
Same thing in most modern nations for healt
Free, you say? (Score:5, Informative)
The problem isn't really the free shipping. The suit seems more concerned with price-fixing across multiple platforms, an indicator of a forming monopoly.
"It’s a longstanding claim by some of the independent merchants who sell on Amazon’s digital mall that the company punishes them if they list their products for less on their own websites or other shopping sites like Walmart.com. Those sellers are effectively saying that Amazon dictates what happens on shopping sites all over the internet, and in doing so makes products more expensive for all of us."
Interesting one-off:
I priced a particular set of headphones for my son's birthday earlier today... same retail price on Amazon, Best Buy, and Walmart online.
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The argument is that access to the free shipping network is the power Amazon holds over retailer to force them to fix prices. Without Amazon Prime, they're not able to.
Fair to say, but it's also equitable to note that market share is a powerful incentive for retailers. I'm reminded of the Uno Card Game [portablepress.com] made solvent by a single wave of the founder's hand.
In terms of a "market" solution to this, presumably it'd require the major shipping companies to provide free shipping subscriptions for receivers of items, and an API that allows third party retails to identify subscribers to those services and waive shipping prices on that basis. That would... tough. The only way I can see it working is combined with a payment processor like Paypal (which has its own problems.) Plus Amazon provides considerably more then just free shipping for Prime customers.
Sadly or miraculously, Amazon's free two day shipping is the reason buying online sucks a lot less. Even more incredibly, the once or twice a year I need something they sell tomorrow, it's often an additional US$3.99 if I order before 4:00 p.m. Ten years ago, this was indistinguishable from magic when it happened to me.
A few anti-trust lawsuits can be used to force Amazon to open up their own service instead. Which is what is being tried right now. And probably the only viable option.
Gr
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I priced a particular set of headphones for my son's birthday earlier today... same retail price on Amazon, Best Buy, and Walmart online.
For consumer electronics in particular, this is hardly surprising. There's price-fixing going on, but it's from the opposite end of the table.
Most consumer electronics manufacturers operate under something called MAP - Minimum Advertised Price. The gist is that in order to be an authorized retailer with access to wholesale pricing, you (the retailer) must agree to price the items no lower than $X. In theory, this keeps the gigantic retailers from undercutting the mom-and-pops, but in practice - post-Web, pr
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Are these things on AliExpress big brand items, or non-name Chinese crap? Amazon can't hope to price control nameless stuff coming out of random factories. They are going to price control distinct branded stuff whose supply chain is identifiable.
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No-name items, but the exact same item is in all three places with simple variations in the spelling of the distributor name.
As for the big brand stuff, there is more variance and it depends on where the item is manufactured. It is complicated because there are many "unauthorized" resellers. These unauthorized resellers purchase genuine items locally and then export them on their own. This gray market exporting is big business in China since markup in the US market are much higher than in China, and the di
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If Walmart wants to compete this way, lets seem them launch a "we will always beat Amazon" advertising campaign. It's not like they have done that and Amazon forced them to stop, they have never done it.
Walmart didn't invent cornering market share and underpricing products until the competition is squeezed out, but they certainly applied it on a scale previously unforeseen. If you recall, they were forced to repeal the ad tagline "Always the Lowest Price" amidst similarly monopolistic concerns.
In some ways, Amazon is the just the internet iteration of the Walmart Gambit... caveat emptor, they do not plan to be remembered as the online market of the untouchables.
Free shipping or not: It's trivial (Score:5, Insightful)
Add in the cost of traveling to the "local" store in time and gas compared to clicking the "add to shopping cart" button when it arrives at your door in a couple of days while your car remains in the garage.
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Except most people actually leave their house and will go past -- or even TO -- those other stores on a regular basis.
But convenience is one of the most powerful force in the universe. And yeah, people who don't know TANSTAAFL [investopedia.com], are fools.
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I dunno what most other people do. But the fact is the local shopping district is 20 miles away. It would cost me a minimum of 50 cents a mile to drive (and I'm probably understating it), so $20.00 to go to the store and buy something that costs $5.95 to ship. This doesn't even count the two hours I have to spend going back and forth. Look, I'm sorry about the local Mom & Pop, but stuff changes. No one is sorry about the blacksmith shops any more, and that represented a real skill. Mom & Pops just s
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Making a trip to town once a week isn't that big of a hardship and the wive likes it.
i bet amazon (Score:3)
"Flywheel" (Score:2)
Reminds me of the fake "zog" measurement unit the McLaren F1 team made up to hide the fact that they were talking about settings on an axle inerter, which few or no other teams were running at the time. They could then freely talk about setting the front or rear suspension to so many "zogs" over the radio.
"Free shipping is also the backbone of Prime." (Score:2, Insightful)
I've been getting free shipping without Prime for many years. I wonder if it's the very fast shipping that attracts buyers. Are they buying urgently needed medical supplies? Or maybe they don't know they can get free shipping without paying for Prime. Or maybe they want the video options that Prime offers.
There seems to be little thought put into TFS or it is deliberately misleading. Either Matt Stoller or the attorney general or both may have hidden motivations in presenting this information.
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Amazon stopped offering free shipping without Prime several years ago, around the same time they started withholding packages to non-prime members for 2 days before even shipping them, just so you wouldn't get them overnight without paying for Prime.
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Amazon stopped offering free shipping without Prime several years ago
To you maybe. I still get free shipping without Prime if I don't mind making a minimum order ($25?) and waiting 1-3 extra days over normal shipping. And I rarely care about the extra days, because most of the time it's a product (usually electronic parts) that I would never find locally, in a big city. Sometimes a sub-shipment package will even arrive 2-3 days before the original due date.
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Not true. If your order exceeds $35 you can choose free shipping (for books, it's $25) Takes a couple of days longer (theoretically, but not really.) I am not a Prime member and I have never paid for shipping because I wait until my order exceeds $35. Sorry if you haven't figured that out.
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With Prime you get free next day delivery on all orders (caveats apply). Without Prime you get free standard (3-5 day) delivery on orders over £20 (in the UK, obviously). Its quite a big difference.
I wouldn't pay for it for the reasons you suggest, but (also as you suggest) I wanted Prime video. The trouble is, once you get it, free next day delivery is quite addictive and it does make cheap impulse purchases more likely.
Re: "Free shipping is also the backbone of Prime." (Score:2)
Has Brexit had any visible impact on Amazon's delivery times in the UK?
Obviously, Amazon has warehouses in the UK itself, but it seems like Brexit would have killed Amazon's presumed ability to stock $(random niche, long-tail item maybe 6 people randomly scattered across the entirety of Europe might buy over the span of 2 months) at a warehouse in Belgium or semi-rural eastern France, and get it to Britain within a day or two via truck & Eurostar/ferry if some random guy in Telford or Sheffield buys one
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IMHO, Prime provides a fair value for the money. Free shipping is just one of the benefits. Prime Video is another tangible benefit. Our family is not into watching movies but we watch TV on occasion and Prime Video is good enough for that. I can't justify having Netflix since when we had it no one watched it so it was a waste of money.
Free and fast shipping is a great benefit. I had to get a part for the garage door fast. First I went to a local store hoping that they would have the part. They did not, but
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This sort of thing is only possible (Score:2)
What about refunds? (Score:2)
I'm sure Bezos could whip out some statistic about the free shipping thing, but having to wait up to a month to have your money refunded when you return an item is a huge pain.
And before you say it doesn't take that long, yes, it does. That is how long it took for me to get my money back from Zappos (an Amazon company) when I returned a pair of shoes which didn't right.
In general, for the little bit of online shopping I have done, it takes up to two weeks to see the refund hit your account. That's bad enou
AG Would have to proveâ¦. (Score:2)
Lie to me baby. (Score:2)
I re-up every year.
Misses the Point (Score:5, Insightful)
The thing that gives Amazon the edge is the massive tax con they perform internationally. By booking all their foreign profits to corporate tax havens, Amazon have been in a position to decimate international competition for 20 years. This, in turn, means that Amazon deal with product volumes and sales volumes that mean that they can dictate terms to their suppliers.
Just think: how many companies that sell product through Amazon are bigger than Amazon? Make more money? I’ll guess at none.
It is all to simple [and dangerously wrong] to argue that if Amazon stiff foreign countries out of corporation tax, well, sucks to be them. The problem is that Amazon aren’t stupid - they are taking that additional profit and using it to under-cut competition and grow their business until they have become a dominant retailer, an apex predator. Now they are in a position to apply that pressure to domestic US companies, to make all sorts of demands and demand preferential treatment and pricing from even huge US companies. US consumers might look at an Amazon price and think they are getting a particularly good deal but at what cost?
For starters it might be a nice idea to think about breaking the company up - split cloud, streaming, mail-order and high street retail businesses in to separate entities. But to be honest even that would be papering over the cracks.
Weird as this might seem, the single best thing we could do would be to have governments around the world agree that taxes get paid by companies in the country where the user presses “click”. It’s no longer sensible to allow the seller to dictate terms and dictate where sales get booked for tax purposes. That’s just a smoke-and-mirrors con job that harms everyone except that company’s shareholders.
Price plus (Score:5, Interesting)
I WAS an Amazon Prime member until I started comparing Amazon's "prime" price with those of other vendors on Amazon selling the same product. The other vendor's prices plus shipping were very close or equal to Amazon's "prime" price with "free" shipping. So, Amazon's Prime's $120/yr membership charge isn't worth it. (And I don't watch their movies)
I can also get "free" shipping by going through the checkout process (not the automatic checkout). Somewhere along the way I get the opportunity to choose a delivery date. Next day always includes an expensive charge for shipping, but usually one of the options is for shipping free on a specific day, a week or so in the future. I use that when I shop Amazon, which I do with less and less frequency these days.
Retailers inflating shipping costs is the cause (Score:2)
Some retailers think they can get some extra income by inflating the shipping costs.
Makes you feel dirty (but we all do it) (Score:2)
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Fallacy, you think mom and pop shops are any different? No, they aren't, many are worse particularly when employing relatives.
how this really works (Score:5, Insightful)
Matt Stoller is a cretinous political hack. Ignore everything he says. This is the way Amazon Prime really works:
Big-box retail stores had a significant intrinsic advantage over online-only outlets such as Amazon: transportation efficiency. Suppose in the year 2000 you wanted a new CD player to listen to the latest Backstreet Boys hit. What if you ordered if from Amazon? Well the listed price might be lower than the price at Walmart, but then after you include delivery fees, the Amazon price was higher. So buyers preferred Walmart to Amazon because of lower prices. That was true even if you priced in your own time and expenses to drive to Walmart into the comparison. Why?
Consider your hypothetical Amazon purchase. Suppose you live 30 miles from the UPS depot. The UPS truck is loaded with your CD player package at the UPS depot, drives 30 miles to your house, drops off the package and drives back to the UPS depot. Therefore, the total price of your CD player must include the fuel costs, vehicle maintenance and depreciations, and driver compensation for a 60 mile round-trip drive.
Compare that to a hypothetical Walmart CD player purchase. The customer jumps into his Ford Probe and drives 30 miles to they local Walmart, where he purchases a CD player. While he is there he also buys a gallon of milk, a quart of ice-cream, a dozen apples, oil filters and automotive oil, iceberg lettuce, two pounds of ground beef, onion bagels, blue-cheese salad dressing, a floor lamp, taco shells a case of Jolt cola and book about the impending Y2K crisis from the bargain bin. The total price of that bundle of goods to the consumer must include fuel costs, vehicle maintenance and depreciations, and driver compensation for a 60 mile round-trip drive.
What have we just learned from that example? Even when the transportation distances are the same, when a bundle of goods carpools together to the consumer's home from the big box store then the average transportation cost per good is lower than when customers order good online which are delivered individually.
So if you are Jeff Bezos in the year 2000 your megalomaniacal dreams of total world domination are looking pretty unrealistic. You realize that Amazon growth is capped because the transportation logistics of the mail-order business model are intrinsically disadvantaged against large brick-and-mortar outlets. Amazon has an advantage in long-tail markets like books because it is cheaper to warehouse and ship obscure products than retail them at brick-and-mortar stores, but even if you dominate there, the long tail is small potatoes compared to the fat middle at Walmart. But you are Jeff Bezos! You have a ridiculous arfing seal laugh, a one-click patent, a hot wife and you graduated summa cum laude with degrees in computer science and electrical engineering from Princeton. You are going to turn the tables. You are going to fuck Walmart, very, very hard. They will not see it coming.
Bezos finds some first-rate quants, pays them a good pile of cash or stock options, and swears them to secrecy under penalty of painful castration with a blunt instrument such as the fossilized leg bone of a large prehistoric ungulate or a perhaps frozen tube of Walmart ground beef (the in-store brand). He tells them, you have only one job: Tell me how many other stops that UPS truck has to make on the way to delivering the CD player, tell me how much other stuff that customer has to receive in that same delivery, for the Amazon price to the customer with shipping fees to be as low as the Walmart price without shipping. The quants calculate for a while and then reveal to Bezos the top-secret "Walmart is totally fucked number." It is the size to which Amazon grows at which it gains an intrinsic logistical advantage over brick-and-mortar retail because its delivery trucks amortize the expense of a mile driven over more purchases than does the family sedan making a trip to Walmart.
Bezos does not worry about losing money getting Amazon to that s
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I suspect lots of our politics differs, but I 100% agree with this. The article was wrong on the big picture, and wrong on the detail too (eg "In other words, Amazon ties the ability to access Prime customers to whether a seller pays Amazon for managing its inventory." -- claptrap, I'm a Prime customer and I can always use Amazon to buy non-Prime goods. I often choose not to because free fast shipping is a significant benefit, but the choice has never been removed for me)
Recently raped by courier (Score:2)
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Amazon Canada sucks... there is zillions stuffs less than the US counterpart, and it's double the price or more on a lot of item...
Sometimes it's cheaper for me to order in amazon US, pay shipping, duty, taxes, etc than to order from Canada.
FBA combats seller fraud (Score:2)
I was in the market for a camera recently and there were several sellers with prices too good to be true and the seller basically would try to get you to buy by bank transfer from them and even then it might be an italian vendor wanting you to pay into a spanish bank.
Amazon doesn't really police its third party vendors, one that i reported went from 100's of products in a lot of different areas. Had 1 product (a tape gun) left on sale. This was the one item they had that was fulfilled by Amazon. Some of th
Free shipping in France (Score:2)
Free shipping is the God of online retail, so powerful that France actually banned the practice to protect its retail outlets.
Free shipping is only banned on books in France. So Amazon charges €0.01 shipping on books with Prime (vs €6.99 without), everything else still has free shipping with Prime.
Even worse for me (Score:2)
But since Brexit, Amazon like other online retailers must also slap customs & import duties to any orders above £25. So if I wanted to order anything from Amazon without incurri
Lol @ the 'codes for' language. (Score:2)
Re:People Don't Like Checkout Fees (Score:5, Interesting)
We have stopped using the delivery apps in my household. We have more people and make larger orders. I looked into a $110 order and figured out that $45 was going to the delivery company. That was the end of that. Now I send one of the kids to pick things up - much cheaper. An insidious aspect of these apps is that the price of food is higher inside the app than it is at the restaurant. When I send the kids for pickup we get the lower prices. Plus I know my tip is going to the restaurant and not the delivery company.
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US, Canada, UK, and others, all have federal couriers, and they should invest more heavily into them.
Just for reference, the UK no longer has a state postal service. It was sold off by the Conservative government about 10 years ago after 500 years of public ownership.
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Based on this author's logic, then we should require all retail stores to post the wholesale prices on the shelves and then when we get to the register add on the shipping and stocking fees for the store. Right? Same logic.
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Not everywhere. I can't remember the last time an Amazon order didn't arrive next day.