Washington State Shuts Down 'Sold By Amazon' Program Nationwide (seattletimes.com) 32
An anonymous reader quotes a report from The Seattle Times: Amazon is shutting down its "Sold by Amazon" program after an investigation from Washington Attorney General Bob Ferguson found it was anticompetitive and violated antitrust laws. The company engaged in unlawful price fixing and unreasonably restrained competition in order to maximize its own profits, according to the lawsuit and consent decree filed Wednesday in King County Superior Court. As a result of the investigation, Amazon will shut down the program nationwide and pay $2.25 million to the attorney general's office, as well as provide annual updates on its compliance with antitrust laws. The funds will go toward antitrust enforcement.
The program ran from 2018 to 2020, when Amazon suspended it for reasons unrelated to the investigation, according to a spokesperson for the company. It was a small program offering another tool to businesses, the spokesperson said, and did not include all of the third-party sellers on the e-commerce platform. Through the program, third-party sellers entered into an agreement with Amazon that set a minimum payment rate for products sold on the platform, according to the lawsuit. If the sales exceeded the agreed upon minimum, Amazon would take a cut of the additional revenue. A spokesperson for Amazon said the company believes the program was legal and good for consumers. Amazon acted as the retailer and purchased products from suppliers to fill a customer order, ensuring low prices for consumers. But, Ferguson's investigation concluded, the program boosted Amazon's sales and ensured it didn't have to compete with third-party sellers. "Consumers lose when corporate giants like Amazon fix prices to increase their profits," Ferguson said Wednesday. "Today's action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country."
The program ran from 2018 to 2020, when Amazon suspended it for reasons unrelated to the investigation, according to a spokesperson for the company. It was a small program offering another tool to businesses, the spokesperson said, and did not include all of the third-party sellers on the e-commerce platform. Through the program, third-party sellers entered into an agreement with Amazon that set a minimum payment rate for products sold on the platform, according to the lawsuit. If the sales exceeded the agreed upon minimum, Amazon would take a cut of the additional revenue. A spokesperson for Amazon said the company believes the program was legal and good for consumers. Amazon acted as the retailer and purchased products from suppliers to fill a customer order, ensuring low prices for consumers. But, Ferguson's investigation concluded, the program boosted Amazon's sales and ensured it didn't have to compete with third-party sellers. "Consumers lose when corporate giants like Amazon fix prices to increase their profits," Ferguson said Wednesday. "Today's action promotes product innovation and consumer choice, and makes the market more competitive for sellers in Washington state and across the country."
crotter inc getting anti-trust on its own turf (Score:1)
Seems like a bit of a shame really... (Score:1, Troll)
Now I have to check every single purchase I make on Amazon to see, even if it's fulfilled by "Prime" if it's actually sold by Amazon and if I have a problem, do I get Amazon's customer services, which is generally good, or, do I get a random third-party seller's customer support which is generally pretty shit. Not sure this really is all that great for consumers at the end of the day.
To complete the thought - people who don't run an eCommerce offerings generally have no idea how high the overhead is. So man
âoeShut downâ? (Score:3, Informative)
Re: (Score:2)
Perhaps he's one of those FC Ambassadors who didn't get the memo [slashdot.org].
Re:Seems like a bit of a shame really... (Score:4, Informative)
This has nothing to do with "fulfilled by Amazon". This is "Sold by Amazon".
Fulfilled by Amazon means you ship inventory to Amazon and use Amazon's logistics to fulfill the order - if someone orders through your website or other means, you tell Amazon to ship the item to the customer directly. If the customer buys something from Amazon's site, then Amazon pulls it from your inventory and ships it to them.
Sold by Amazon is different - it's basically the opposite of the Amazon Marketplace. Here, you use Amazon to handle the sales flow. You basically ship your product to Amazon, and you direct sales to Amazon. Amazon handles everything. Your storefront, effectively, is Amazon.
What happens is, if you're invited into the program (unlike Marketplace, Amazon wants to work with you) and you basically let Amazon be a near exclusive sales channel. You promise to never lower your price below an agreed to amount, and basically to funnel the sales through Amazon if you can.
So if you wanted to sell a product in retail stores and online, you'd ship product to your stores from your distributor, and you'd ship Amazon product to handle the online sales.
It's anti-competitive in that you're invited into the program - if you and a competitor make the same widget, then if your competitor gets invited, they get special rates for being practically exclusive, much better rates than fulfilled. Basically Amazon chose to provide your competitor with a favorable sales channel that you can't get - either you have to put up with the cut using fulfilled, handle the logistics yourself, or that's it.
It's also anti-competitive in that it locks up companies to Amazon, so competing e-commerce platforms aren't able to sell your product.
It's likely why there have been a lot of weirdness in things - and likely some bad blood has been formed. For example, there's a board game called Wingspan, which is in heavy demand. So heavy, retailers are allocated. However it was discovered the publisher of the game, Stonemier Games, while they do print runs of 30,000 units, most of those have been going to Amazon via a secretive distributor that only deals with Amazon. The game is more readily available through Amazon as a result, and because of Prime and all that, no small retailer, either brick and mortar or online, can really compete against Amazon - Amazon gets the majority of the print run (despite retailers pleading to even get their orders fulfilled). It's lead to a lot of bad blood on the retailer side because they get pushed to sell the stuff that doesn't sell (there's a game called Tapestry, which has a much smaller print run and they're pushed heavily to sell that even though it's not a great game).
Likely the same has happened with Magic The Gathering as well, given Amazon is one of the exclusive direct online retailers of the product. Sure other retailers can sell the product online, but they have to get it through a distributor, whereas Amazon gets their product from Hasbro/Wizards of the Coast direct.
Come to think about it, a local game retailer noted they used to buy product direct from Wizards all the time, but things changed and they were forced to go through their distributors now which means it's been harder to get in-demand products as well.
All these events have happened around the time of Sold by Amazon, come to think of it
Re: (Score:2)
This is no different then Costco or Walmart getting their shipment of $X popular item where Kroger's or Albertson's just can't compete. If you run out of an items, say Philly cream cheese, at an Albertson's, the company will let that spot stay empty for months. Costco, if that pallet space with your product isn't full, we'll give your pallet space to another company.
This effectively means Costco and Walmart will get priority because you don't want to be the person in charge that lost the Costco account.
It
Re: (Score:2)
This is no different
Absolutely false. You're leaving out the part where they agree to fixed price limits, which is absolutely not happening between Kroger and Albertson's.
Scammy returns (Score:3)
One of these things is not like the other.
Why would you not return broken products? That's the whole fucking point of returns, you were sold crap, the crap broke when you tried to use it, so you send it the fuck back and get a refund.
As an occasional buyer of Amazon return pallets, I can say that probably 75% of the stuff in them is legit returns -- either a thing that was never used (sometimes never even opened) and unwanted, or shipping damaged, or defective and returned properly in its package with all the accessories.
The rest is fucked up in some way: It might be someone who crashed their drone and bought a new one and returned the old one with broken legs and grass stains all over it in the box with the brand-new still accessorie
Anticompetitve? (Score:2)
I don't use Amazon much but wasn't this like Newegg's "Sold by Newegg"?
My reason for using this feature on these sites was to avoid some of the scam third party retailers. It also often had the benefit of hiding products that were falsely listed in the wrong categories (probably intentionally at times).
I wish sites with third party retailers would take policing categories more seriously. It's one thing to show ads like, customers also bought these other products. The non-ad search results should be relia
Re: (Score:2)
No.
1) This has nothing to do with "Fulfilled by Amazon" or things that Amazon buys and then sells. The name "Sold by Amazon" is not something that was ever shown on the site, it is just a confusing name that they gave to make their price-fixing program more difficult to refer to.
2) Sold by Newegg just means that Newegg is buying the product from the manufacturer/distribute and then selling it to you, like a normal store. It has nothing to do with a price-fixing scheme.
What exactly is this program? (Score:3)
As far as I know there are products sold on Amazon where Amazon has bought stock from somewhere and selling it themselves and there are products sold on Amazon where a 3rd party has acquired stock (either buying it from somewhere or if they are the manufacturer taking their own stock) and are then selling it on Amazon.
How does "Sold by Amazon" differ from these?
Re:What exactly is this program? (Score:4, Informative)
AFAIK, the distinction is that instead of the seller having control of the price the item is offered for, AZ gets to set the price, subject to a minimum price, selected by AZ, that's guaranteed to the seller, even if AZ discounts the item below that price. I've once in a while bought product where there's some note to the effect that AZ is kicking in some contribution to lowering the price, which seems to correspond with this SBA program.
There's some interesting detail on the SBA program here: https://www.ecomcrew.com/the-a... [ecomcrew.com]
Prices on AZ change all the time, as you can see from camelcamelcamel.com, or by putting products in the "save for later" list and observing the updates on prices when you're about to checkout. It was just as controversial when AZ switched to the "agency" model for e-books under pressure from Apple, where the publisher got to choose pricing instead of AZ - but books are a different kind of product, as there isn't really a brand-X replacement for a particular book by a particular author, unlike laundry soap or a USB cable - but there are multiple formats e-book, paperback, hardback, library binding, etc., and for some formats, it seems AZ gets to choose the sales price, and others, the sales price is set by the publisher. Many AZ prices are changed dynamically by algorithms that sometimes go to strange places, as when seller X sets the price at 105% of seller Y, and seller Y sets the price at 120% of seller X, and ordinary products start getting priced at extraordinary prices. https://fortune.com/2020/07/14... [fortune.com]
not even a wrist slap (Score:5, Informative)
I'll save you the math. According to macrotrends.net:
Amazon annual revenue for 2020 was $386.064B
Amazon annual revenue for 2019 was $280.522B.
Amazon annual revenue for 2018 was $232.887B.
Total for the three year period is close to $900B.
Suppose you are on a $100K annual salary. In proportion a $2.25M fine is, wait for it, 75 cents!
Re: (Score:3)
The more money you have, the lower the proportional cost for malfeasance.
Crime pays as long as you make enough. Only the poor really get fucked by the system.
It's bizarre, because I don't think I've ever met anyone who thinks it should be that way... but nobody seems to have the political will to fix it.
you get the government you bought and paid for (Score:3)
That's the 'Murican way.
The more money you have, the lower the proportional cost for malfeasance.
Crime pays as long as you make enough. Only the poor really get fucked by the system.
It's bizarre, because I don't think I've ever met anyone who thinks it should be that way... but nobody seems to have the political will to fix it.
I think there are quite a few people who "think it should be that way." Mostly the folks who have thought it through and consciously decided it should be that way are consolidated in corporate boardrooms and halls of government. But their message goes out to the public, that everything good in the world is a result of business, and everything bad is a result of government interference, and that it's impossible to make things better for people by "hurting business."
And that message resonates. When the litt
Re: (Score:2)
Re: (Score:2)
Revenue is not the same as profit.
Exactly! It's like conflating $100k salary with how much revenue you generated for your employer. That would be apples-apples in the above example.
And anyway, stopping them from doing it in the future is the main purpose of anti-trust enforcement. Punishment would be nice, but the People would have to support that, and support laws to enact that. In Washington State they have functioning Direct Democracy, and if somebody wants to add big punishments they can get it on the ballot and see if people vote yes;
I'm not understanding the complaint . . . (Score:2, Informative)
So, Amazon is founded to sell books online. When you ordered a book from Amazon, you were buying a book from Amazon. Then Amazon starts selling other stuff. When you ordered other stuff from Amazon, you were buying other stuff from Amazon. Then, Amazon starts its marketplace. When you ordered stuff from Amazon, you might NOT be buying it from Amazon. So, Amazon starts a program to make it easier to see that you were buying from Amazon, and someone says that this is bad. I'm really confused. I have a pretty
Re: (Score:3)
It used to be so easy to tick that box and eliminate all of the crap sold by some random dude in an apartment in Wuxi. The fact that Amazon sells something isn't necessarily an indication that it's better, but it's an indication that some amount of curation took place. Now if I want something random -- say, a turnbuckle -- it's quicker to waste gas or electrons going to the Home Depot than filter through all of the crap from every zhang san li si in China.
Re: (Score:2)
I think you are missing a step. This program that's already been cancelled isn't the fulfilled by amazon or sold by amazon option, but a program that certain vendors are invited to where they agree to a set price.
This won't change anything if you just sell your stuff on the market place and have it fulfilled by Amazon. As a customer, we will still be able to tell if we are buying a fulfilled by amazon (hence returnable to) or otherwise.
What's next? (Score:2)
why they discontinued ... (Score:4, Insightful)
The program ran from 2018 to 2020, when Amazon suspended it for reasons unrelated to the investigation, according to a spokesperson for the company. It was a small program offering another tool to businesses, the spokesperson said, and did not include all of the third-party sellers on the e-commerce platform.
The main objective was to kill competition.
First find collaborators from competition and use them to kill rest of the competition
Once the rest of them are dead, kill the collaborators.
Its a dog-eat-dog world. Once you help the big dog eat all other dogs, it is going to eat you.
No, Washington did not shut it down (Score:2)
Amazon shut it down. In 2020.
"The program ran from 2018 to 2020, when Amazon suspended it for reasons unrelated to the investigation, according to a spokesperson for the company. "