Got a Hot Seller on Amazon? Prepare for Amazon to Make One Too(bloomberg.com)
bloomberg.com
Got a Hot Seller on Amazon? Prepare for Amazon to Make One Too
http://www.bloomberg.com/news/articles/2016-04-20/got-a-hot-seller-on-amazon-prepare-for-e-tailer-to-make-one-too
233 comments
> It's almost impossible to beat Amazon in the supply-chain economics, unless you have a highly specialized product and deals with the manufacturer
Yeah. And the opposite of a highly specialized product is exactly the example the article gave--a piece of metal to hold up your laptop. I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?
Yeah. And the opposite of a highly specialized product is exactly the example the article gave--a piece of metal to hold up your laptop. I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?
I think the consumer can only gain from such entries into the market. AmazonBasic products are often just a standardization of a simple product in a market with too many options. Consumers trust Amazon to deliver on their promises and when confronted with a choice between 800+ USB hubs, I'll choose the cheapest option that is guaranteed to work. There is almost 0 utility for the consumer in choosing a "better" USB hub than AmazonBasic's offering but the downside of choosing a "no-name" hub is measurably significant.
The genius in AmazonBasic concept was in realizing that building the better mousetrap doesn't always mean building the best mousetrap, it means building the best mousetrap for the price. There are so many goods with a market that falls into just two categories, ones that work and ones that don't. Whichever brand is able to gain consumers trust in knowing their offering will work will quickly rise to dominate such a market.
The genius in AmazonBasic concept was in realizing that building the better mousetrap doesn't always mean building the best mousetrap, it means building the best mousetrap for the price. There are so many goods with a market that falls into just two categories, ones that work and ones that don't. Whichever brand is able to gain consumers trust in knowing their offering will work will quickly rise to dominate such a market.
It's like the Walmart-ization of main street - except in the digital realm. Great for cost-cutting consumers today, bad in the long run.
Personally for the product pictured - the Amazon version is gaudy - I don't want to see more AMZN branding on my stuff.
Personally for the product pictured - the Amazon version is gaudy - I don't want to see more AMZN branding on my stuff.
I'm curious how you know what's good for consumers more than they do. Would you mind explaining why it's bad for cost-cutting consumers in the long run?
Seems like amazon is content to run razor thin margins, and if they jack up the price after competitors go out of business, that move would recreate a market for item X and burn some Amazon good will.
I also find the Amazon branding on that laptop stand to be really tacky, though!
Seems like amazon is content to run razor thin margins, and if they jack up the price after competitors go out of business, that move would recreate a market for item X and burn some Amazon good will.
I also find the Amazon branding on that laptop stand to be really tacky, though!
Ostensibly this kind of obvious copying is the sort of thing that design patents are supposed to thwart.
Re: why - It's really basic monopoly theory - squeeze out competition, then raise prices. Are you certain that Amazon will always be content to run razor thin margins? At some point Amazon will have subsumed the buying habits of the consumers long after Rain is dead and buried. Will someone new really come along?
Re: why - It's really basic monopoly theory - squeeze out competition, then raise prices. Are you certain that Amazon will always be content to run razor thin margins? At some point Amazon will have subsumed the buying habits of the consumers long after Rain is dead and buried. Will someone new really come along?
I have one of these at work (and my colleague one of the name brand articles) - you don't see the branding on either one 99% of the time, because your laptop is covering it.
Ultimately, it is just a laptop stand, and it's a quality one. I'm just surprised that it took Amazon to come up with a lower priced competitor - I've been looking for something that wasn't $50 for a long time. All of its competitors other than Amazon are overpriced, flimsy pieces of plastic.
Ultimately, it is just a laptop stand, and it's a quality one. I'm just surprised that it took Amazon to come up with a lower priced competitor - I've been looking for something that wasn't $50 for a long time. All of its competitors other than Amazon are overpriced, flimsy pieces of plastic.
There's also a certain amount of acknowledgement that you're not going to get the best or perfect product for the price that you pay Amazon, but you will get better service (that is, replacement/refund) than you're likely to get from TJ's Wholesale Emporium or a random individual seller on Amazon.
> I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?
The thing you stand to lose is the original making of that product.
While making the laptop stand is "simple" (and I object to that statement as manufacturing anything is rarely "simple"), getting it in front of people, marketing it, and selling it is not. Amazon sits back and looks for any products that now sell over $X million dollars and then simply walks in.
So, now if I'm a manufacturer, I will do several things:
1) I might avoid Amazon. Ever. Decreasing choice on Amazon certainly hurts the consumer, no?
2) I might make a shitty product specifically for Amazon to sell so it doesn't cannibalize my good product. I hope you like wading through even more crappy products on Amazon. That hurts the consumer, no?
3) I might simply not make the product. If I think that Amazon might clone me, I either might not develop the product or I might artificially restrict the sales if I know that Amazon flags products above "n units sales or $m total revenue".
This is not new. WalMart was the offender last time. http://www.fastcompany.com/54763/man-who-said-no-wal-mart
Note that Snapper got bought by Briggs who then decided that Sears and WalMart were just fine. Quality seems to have suffered, as expected.
The thing you stand to lose is the original making of that product.
While making the laptop stand is "simple" (and I object to that statement as manufacturing anything is rarely "simple"), getting it in front of people, marketing it, and selling it is not. Amazon sits back and looks for any products that now sell over $X million dollars and then simply walks in.
So, now if I'm a manufacturer, I will do several things:
1) I might avoid Amazon. Ever. Decreasing choice on Amazon certainly hurts the consumer, no?
2) I might make a shitty product specifically for Amazon to sell so it doesn't cannibalize my good product. I hope you like wading through even more crappy products on Amazon. That hurts the consumer, no?
3) I might simply not make the product. If I think that Amazon might clone me, I either might not develop the product or I might artificially restrict the sales if I know that Amazon flags products above "n units sales or $m total revenue".
This is not new. WalMart was the offender last time. http://www.fastcompany.com/54763/man-who-said-no-wal-mart
Note that Snapper got bought by Briggs who then decided that Sears and WalMart were just fine. Quality seems to have suffered, as expected.
> The thing you stand to lose is the original making of that product.
I would argue that Amazon Basics is filling the niche between quality premium and questionable cheap products with reliable products at a fair price.
If you want a Lightning cable for your iPhone what are your choices? A $1 part from an unknown Chinese factory that might work, or the $29.99 cable from Belkin, Griffin or Monster that will work? You know the cheap cable is a roll of the dice but you can't stomach the alternative either. That's where Amazon Basics comes in, it's the Toyota Carolla of whatever it is you're looking for.
It's not like Amazon is edging out anyone, they're offering products in categories that are over saturated with thousands of competing choices and no way for a customer to distinguish a good deal from a rip off.
I would argue that Amazon Basics is filling the niche between quality premium and questionable cheap products with reliable products at a fair price.
If you want a Lightning cable for your iPhone what are your choices? A $1 part from an unknown Chinese factory that might work, or the $29.99 cable from Belkin, Griffin or Monster that will work? You know the cheap cable is a roll of the dice but you can't stomach the alternative either. That's where Amazon Basics comes in, it's the Toyota Carolla of whatever it is you're looking for.
It's not like Amazon is edging out anyone, they're offering products in categories that are over saturated with thousands of competing choices and no way for a customer to distinguish a good deal from a rip off.
I feel like a good solution for consumers would be a "certified by Amazon" program.
Still allows small new businesses, provides the user with the "garentee" they want, gives the business advertising, and keeps you on Amazon.
I understand why they went straight to making then themselves, but I can dream!
Still allows small new businesses, provides the user with the "garentee" they want, gives the business advertising, and keeps you on Amazon.
I understand why they went straight to making then themselves, but I can dream!
Would that be handled like most certification processes where the business applies for certification and pays a fee? Or where Amazon randomly selects vendors and tests them, the later seems like it would be more costly than sourcing the products yourself.
IMO the second one would be almost impossibly difficult at Amazon's scale. It would have to be the first. And of course that means setting the price so that they can handle the amount of incoming requests, which means it will eliminate some smaller groups. But i feel like if i were a creator of something, i'd want to pay the money to get it "certified" rather than amazon copy it.
> it's the Toyota Carolla of whatever it is you're looking for.
Corolla, not Carolla.
Corolla, not Carolla.
> it's the Toyota Carolla of whatever it is you're looking for.
What a great comparison, exactly.
What a great comparison, exactly.
First off, "simple" is relative. A laptop stand is relatively simple, that's just what it is.
So, you're saying we stand to lose original making of products that are easy for Amazon to copy. That's exactly what I'm saying isn't that important.
You point 3 is what you should do if your product is not innovative or cannot compete with a generic AmazonBasics version. If it's truly better, or complex enough that it simply won't be copied by Amazon, then make it and you won't have issues.
So, you're saying we stand to lose original making of products that are easy for Amazon to copy. That's exactly what I'm saying isn't that important.
You point 3 is what you should do if your product is not innovative or cannot compete with a generic AmazonBasics version. If it's truly better, or complex enough that it simply won't be copied by Amazon, then make it and you won't have issues.
If Amazon is the only company willing to make a product, that gives them a monopoly by definition. When have consumers benefited when they only have one choice?
In his case 3 there will be no AmazonBasics version either, since there won't be a product for Amazon to analyze and copy.
I actually just bought the Rain stand for my rMBP a week ago, and have to say that I'm impressed with the industrial design. Sure, it's just a laptop stand, but it's solid aluminum and has solid design principles - it's a heavy piece of metal that looks and functions well enough it could have been designed by Apple and Jony Ive himself.
I'm fairly certain the AmazonBasics stand isn't the same quality, but that's not really the market they're going for. They're going for good enough and cheap - AmazonBasics cables are a good example of this - they're not high end, but they're affordable and when you just need an HDMI cable, they work fine.
Honestly, Amazon is in the perfect position to compete with their partners like this, and I don't see the harm. If anything the customer experience is even better because we now have reasonable low-priced options to buy that might not have been there before.
I'm fairly certain the AmazonBasics stand isn't the same quality, but that's not really the market they're going for. They're going for good enough and cheap - AmazonBasics cables are a good example of this - they're not high end, but they're affordable and when you just need an HDMI cable, they work fine.
Honestly, Amazon is in the perfect position to compete with their partners like this, and I don't see the harm. If anything the customer experience is even better because we now have reasonable low-priced options to buy that might not have been there before.
I also bought a different, brand-name stand for my rMBP. I'm one of the people who are willing to pay extra for a product because it looks better. I don't think Amazon is threatening higher-price/lower-quantity products that are truly outstanding (much better looking, much better quality). These make more money off of one sale, and have a smaller market. The more complex the product is, the easier it is for a company to set their version apart from the AmazonBasics one. I think they're only threatening those that are simply "easy enough" to copy without losing functionality and utility. The laptop stand is very close to the "easy enough" part of the spectrum. Things like USB hubs and ethernet cables, even closer.
Same. I'm not swayed by price. It's the build quality and materials that matter most to me. While there might be consumers who are drawn to Amazon's laptop stand, I'm willing to assume that the majority of buyers for Amazon's product would not have purchased the pricier options to begin with.
I have the Amazon one, my colleague the Rain version. When your laptop is on it, you can't tell the difference between the two.
Yes, it's steel instead of Aluminum, which means it weighs around 3 lbs instead of the Rain's 2 lbs (it's thick). Otherwise, it functions perfectly well as a laptop stand, which is all I really wanted out of it.
Yes, it's steel instead of Aluminum, which means it weighs around 3 lbs instead of the Rain's 2 lbs (it's thick). Otherwise, it functions perfectly well as a laptop stand, which is all I really wanted out of it.
I have an AmazonBasics bag for my surface. It was cheap and decent quality. I'm really happy with it. It's good enough for me and the price is right.
The biggest risk is that Amazon will act as a monopoly and jack up the prices of the products once it's destroyed competitors.
Honestly, I don't think that's too likely as amazon's business model is built around razor-thin margins.
Honestly, I don't think that's too likely as amazon's business model is built around razor-thin margins.
A monopoly on pieces of metal shaped a certain way? I feel like both of your sentences are unnecessarily abstract here.
That's super unlikely to happen. At least with a product like this. Jacking up the price would just encourage other manufacturers to do the same as Amazon: release a cheaper product. What Amazon has done is best for the consumer.
That isn't going to happen.
See: Walmart's Great Value brand products. Walmart has used it for a long time to hold consumer prices in check. If Nabisco attempts a large price hike, Walmart deploys their Great Value brand right next to said Nabisco product and undercuts them down to a price they regard as reasonable. Despite Walmart's extreme size and market dominance in traditional retail over the last ~20 years, they've never used - at a wide scope - their Great Value brand as an opportunity jack up prices or destroy competitors.
See: Walmart's Great Value brand products. Walmart has used it for a long time to hold consumer prices in check. If Nabisco attempts a large price hike, Walmart deploys their Great Value brand right next to said Nabisco product and undercuts them down to a price they regard as reasonable. Despite Walmart's extreme size and market dominance in traditional retail over the last ~20 years, they've never used - at a wide scope - their Great Value brand as an opportunity jack up prices or destroy competitors.
No, the biggest risk is that Amazon will kill innovation by reducing the expected returns to product development expenditures so that investment in product development is reduced.
But there's nothing innovative about the original versions of the AmazonBasics products. That's why they're called AmazonBasics. I'll agree with you when we have an AmazonBasics car or smartwatch, which turn will change the entire paradigm and probably won't happen.
If that was true, that wouldn't need to free ride on other peoples product and market development. Yeah, it's not the flashy big-picture innovation that goes into inventing whole new product categories -- but it has a cost and provides values, and if Amazon is swooping in to eat the returns of other firms investments, they destroy the incentive to make the ivestments, and improvements in the product categories at risk will be impaired.
Apple's done this for years. Most recent case I can recall is that f.lux program on iOS. AFAIK, people kind of mildly call them out on it and then forget about it a week later. It certainly hasn't seemed to actually damage Apple's business at all.
The damage would be that fewer people bother developing software for their platform.
Seems very hard to measure. So it's safe to speculate!
Seems very hard to measure. So it's safe to speculate!
The term for that is Sherlocking, referencing a 3rd party tool they 'integrated' in either OS 8 or OS 9 (sorry, don't remember exactly).
I'd argue the f.lux case is a bit different.
Either way, haven't big retailers (Walmart, BestBuy, etc.) always done this?
I'd argue the f.lux case is a bit different.
Either way, haven't big retailers (Walmart, BestBuy, etc.) always done this?
For anyone curious: The third-party tool was Karelia's Watson, which was a tool that let you search websites, with the ability to add support for new websites through plug-ins. In OS X 10.2, Apple added the same functionality to their "find file" tool Sherlock (and IMO made the program worse than either Sherlock or Watson were on their own).
They have also done this with Spotlight, taking over functionality of app launchers / utilities like Quicksilver and Alfred.
Oh, I thought it was earlier than that. I also couldn't remember if Sherlock was the Apple tool or the 3rd party one.
I didn't come back to the Mac until a hair before 10.4, so I don't have first hand experience.
I didn't come back to the Mac until a hair before 10.4, so I don't have first hand experience.
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We expect products to get better and people to learn from public ideas. For customer's it's a good thing.
But this really does burn developers of those original products who were originally brand partners.
I don't think Apple "owes" them anything, but I think they would help themselves by treating it as if they did. Especially where it's obvious that the OS-bundled app will win simply by virtue of being bundled. It's probably a legal issue where if they gave someone anything they'd open the door to being sued for a fortune, but it's horrible PR towards their developers.
But this really does burn developers of those original products who were originally brand partners.
I don't think Apple "owes" them anything, but I think they would help themselves by treating it as if they did. Especially where it's obvious that the OS-bundled app will win simply by virtue of being bundled. It's probably a legal issue where if they gave someone anything they'd open the door to being sued for a fortune, but it's horrible PR towards their developers.
In the long run this isn't good for customers because it de-incentivises innovation. Why should I develop a new product when amazon can make a ripoff and use their scale to undercut me?
It de-incentivises innovation that isn't worthy of a patent. Patents (ostensibly, in their original intent) exist in part to allow innovators to know that a competitor can't just go off and clone what they did, but has to license from them or counter-innovate a novel alternative.
In practice this won't stop all possible competitors, specifically those that flaunt patent law, but I don't think Amazon is one of those. Amazon could likely buy a license to the innovation from the patent holder for less than dealing with the courts would cost, in which case the patent system would be working as intended.
In practice this won't stop all possible competitors, specifically those that flaunt patent law, but I don't think Amazon is one of those. Amazon could likely buy a license to the innovation from the patent holder for less than dealing with the courts would cost, in which case the patent system would be working as intended.
Amazon can undercut you whether you sell on their website or not. So can any other major corporation if your product catches their eye. Lastly this particular product was on Amazon for a decade (per article) before Amazon choose to complete. And the answer to your question is develop something you can patent or can compete in other ways that scale and price.
If you sell on Amazon's site, then they know your sales numbers. This is a specific advantage of their position as a distributor.
I run a little side-business, making a hardware gadget. My sales volume data is a sort of first-mover advantage. To compete with me, you have to risk guessing wrong about how many potential customers are out there.
I run a little side-business, making a hardware gadget. My sales volume data is a sort of first-mover advantage. To compete with me, you have to risk guessing wrong about how many potential customers are out there.
> Why should I develop a new product when amazon can make a ripoff and use their scale to undercut me?
This is what patents are supposed to be used for. You create a truly innovative idea and receive a patent for it. Then some large manufacturer, that has the scale to produce your product far more efficiently than you ever could individually, contacts you asking to license your idea. Together you work out a fair price for the rights, you get money for your invention, they get profit, you both leave happy, and the customer gets the best of both worlds.
This is what patents are supposed to be used for. You create a truly innovative idea and receive a patent for it. Then some large manufacturer, that has the scale to produce your product far more efficiently than you ever could individually, contacts you asking to license your idea. Together you work out a fair price for the rights, you get money for your invention, they get profit, you both leave happy, and the customer gets the best of both worlds.
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Amazon has economy of scale, it can make deals for more units and therefore drive down the cost. It also has negotiating and brand power to coerce suppliers to give a better price much like Wal-mart. Amazon competing with its own retailers is a stupid idea and will cause many of them to pull away. Say you offer 1,000 products. Do you really want Amazon knowing which ones are popular?
Just like everything else is now the case with Amazon. You can't build your own business on someone else's platform.
Hell if they start stealing data from AWS from their competitors I would run like hell away from their services.
What you are going to do about it is run away from Amazon. That's what.
Just like everything else is now the case with Amazon. You can't build your own business on someone else's platform.
Hell if they start stealing data from AWS from their competitors I would run like hell away from their services.
What you are going to do about it is run away from Amazon. That's what.
Do you really think Amazon's proprietary data is that essential?
Even if this product were not sold on Amazon it would be easy to see that pursuing it would be profitable. It's high margin and obviously popular. It's hard to keep those facts secret for long. The fact that the project was originally sold through Amazon is really just a red herring. Companies have been entering competition with high-margin incumbents for centuries.
This is just capitalism at its finest: the world does not owe you a business model, and you cannot expect to capture excess profits on stable product lines for long. Either scale or innovate (preferably both).
Even if this product were not sold on Amazon it would be easy to see that pursuing it would be profitable. It's high margin and obviously popular. It's hard to keep those facts secret for long. The fact that the project was originally sold through Amazon is really just a red herring. Companies have been entering competition with high-margin incumbents for centuries.
This is just capitalism at its finest: the world does not owe you a business model, and you cannot expect to capture excess profits on stable product lines for long. Either scale or innovate (preferably both).
Sure, you can run away from Amazon. But then you lose the marketing, fulfillment, and shipping channels offered by Amazon that you cannot possibly achieve yourself. Many customers will only purchase from Amazon, not some janky online store where they need to enter their credit card number. So you lose those. And you could contract with custom fulfillment centers and achieve two day shipping, but you're not going to be able to offer the shipping for free (prime), and the fulfillment will cost you more than Amazon unless you're moving huge volume.
If you offer 1,000 products, as you say, then you're in the wrong business. Did you develop every one of those products? I highly doubt it. So you are just a store selling thousands of products from different manufacturers. In that sense, you are a competitor to Amazon. How can you possible beat them? You've already lost.
The article is not referring to selling thousands of products, it's referring to developing and selling one single, specialized product, and then getting it "stolen" by Amazon. In this case, you are not originally competing with Amazon, but rather using their platform to sell your product. Once they clone your product, then you are competing with Amazon. At that point, if you have not established defensibility, you deserve to be undercut by Amazon.
There are many ways to establish defensibility: patents (Amazon cannot clone your product without paying a license fee); branding (customers will only buy your product, not some cheap clone); custom development (Amazon cannot clone your product without hiring specialized experts). If you are selling some cheap run-of-the-mill product from China, and all you have for defensibility is branding, then you are going to lose to Amazon. But if you have invested years of experience and engineering talent into a custom product protected by strong patents, and branded it well enough that customers know the product is only good if it comes from you, then you will beat Amazon and you can sell to their customers without worrying about getting cloned.
If you offer 1,000 products, as you say, then you're in the wrong business. Did you develop every one of those products? I highly doubt it. So you are just a store selling thousands of products from different manufacturers. In that sense, you are a competitor to Amazon. How can you possible beat them? You've already lost.
The article is not referring to selling thousands of products, it's referring to developing and selling one single, specialized product, and then getting it "stolen" by Amazon. In this case, you are not originally competing with Amazon, but rather using their platform to sell your product. Once they clone your product, then you are competing with Amazon. At that point, if you have not established defensibility, you deserve to be undercut by Amazon.
There are many ways to establish defensibility: patents (Amazon cannot clone your product without paying a license fee); branding (customers will only buy your product, not some cheap clone); custom development (Amazon cannot clone your product without hiring specialized experts). If you are selling some cheap run-of-the-mill product from China, and all you have for defensibility is branding, then you are going to lose to Amazon. But if you have invested years of experience and engineering talent into a custom product protected by strong patents, and branded it well enough that customers know the product is only good if it comes from you, then you will beat Amazon and you can sell to their customers without worrying about getting cloned.
Your perception will bancrupt 99% of smb's and remove all wellfare for the middle class
Why should consumers pay a tax to keep SMBs alive? If Amazon can offer the same product for cheaper than anyone else, what right does a SMB have to charge consumers more for it?
hmmm, talking about "rights" might not be the way to look at this. talking about systemic effects might be a better way. consumers aren't just consumers after all, they're also usually employees. What are the effects, both positive and negative of having such a large company be able to dominate supply chains so much that they can often bring equivalent quality products to market for cheaper. It's a complicated question, not as easy as the moralizing on either side. Amazon and WalMart bad! Amazon and WalMart good!
Then remove all workforce and automate everything..
No seriously, read this: http://www.theguardian.com/sustainable-business/sustainable-... ,It's why second hand clothing is sold in africa and not given away.
No seriously, read this: http://www.theguardian.com/sustainable-business/sustainable-... ,It's why second hand clothing is sold in africa and not given away.
A robust market is in everyone's interest. See: railroads 100 years ago.
SMBs need to add value on either location and convenience, or service. It's something that has been long studied by management experts (see Porter's Competitive Advantage):
https://en.wikipedia.org/wiki/Competitive_advantage
If you want them to compete on Amazon's ground, they will lose.
https://en.wikipedia.org/wiki/Competitive_advantage
If you want them to compete on Amazon's ground, they will lose.
What to do about it? One thing might be to not invest in any company that is dependent on a retail sales channel that doesn't have a specific plan to avoid getting Amazoned this way. Amazon's basically found a great way to free ride on other firms product and market development -- which is fine, up until the reduced expected return from those investments dry up capital to invest in those areas for products that might be exposed to Amazon's tactics.
Oh, you mean what for existing firms with business models that are threatened...
Oh, you mean what for existing firms with business models that are threatened...
> Whatchya gonna do about it?
Break up Amazon a la Bell. It's an abusive monopoly. I'm sure the European Union will get around to doing this before long.
Break up Amazon a la Bell. It's an abusive monopoly. I'm sure the European Union will get around to doing this before long.
I think the mixed incentives problem is becoming more and more glaring with each passing day.
Want to write an app that people use on their phone? Awesome. Become an Apple Dev or a Droid Dev. It's the lottery: the providers love you playing, but only about 1-in-100 make it, and "making it" is not about quality. The garden is too big to be manually cultivated, so the winners are the ones that can play the algorithm.
Have a site online you'd like people to visit? If you're advertising it, you're going through Google or Facebook. Just be sure you don't accidentally flip any yellow flags with them. If you do, they can yank your advertising and you're talking to a robot trying to get it back. Unless you're big, of course. Or you can play the algorithm.
How about if you sell a physical product? What if you've been selling it for years? Well, you gotta go to Amazon. They own internet product sales. But guess what? If you switch to a provider, you don't have an email list, you don't have a unique internet address, you don't provide a unique experience, and whatever you do has just become a commodity. And we're back to the algorithm thing again, because if you can source, package, and sell it on Amazon? Somebody else can too. Probably cheaper. Maybe it has high quality parts. Maybe not. There's far too many products for Amazon to manually curate, so you're back to worshiping the algorithm. The algorithm provides traffic, it provides recommendations, it provides an indication of quality text content -- it provides sales.
Make a mistake in the old brick and mortar days? Go change your sign. Deal with complaints through the BBB.
Make a mistake now? Sure, there's recourse. Sometimes. It's all about the algorithm. And we can't tell you what's in the algorithm, because if we did? Everybody would be gaming it. Like they are now.
The algorithm rules all.
Cross it and die.
Want to write an app that people use on their phone? Awesome. Become an Apple Dev or a Droid Dev. It's the lottery: the providers love you playing, but only about 1-in-100 make it, and "making it" is not about quality. The garden is too big to be manually cultivated, so the winners are the ones that can play the algorithm.
Have a site online you'd like people to visit? If you're advertising it, you're going through Google or Facebook. Just be sure you don't accidentally flip any yellow flags with them. If you do, they can yank your advertising and you're talking to a robot trying to get it back. Unless you're big, of course. Or you can play the algorithm.
How about if you sell a physical product? What if you've been selling it for years? Well, you gotta go to Amazon. They own internet product sales. But guess what? If you switch to a provider, you don't have an email list, you don't have a unique internet address, you don't provide a unique experience, and whatever you do has just become a commodity. And we're back to the algorithm thing again, because if you can source, package, and sell it on Amazon? Somebody else can too. Probably cheaper. Maybe it has high quality parts. Maybe not. There's far too many products for Amazon to manually curate, so you're back to worshiping the algorithm. The algorithm provides traffic, it provides recommendations, it provides an indication of quality text content -- it provides sales.
Make a mistake in the old brick and mortar days? Go change your sign. Deal with complaints through the BBB.
Make a mistake now? Sure, there's recourse. Sometimes. It's all about the algorithm. And we can't tell you what's in the algorithm, because if we did? Everybody would be gaming it. Like they are now.
The algorithm rules all.
Cross it and die.
> The algorithm rules all.
> Cross it and die.
Or, differentiate, use these awesome platforms as a traffic source or branding help, focus on direct to the consumer sales and loyalty, and/or build a better product and keep doing so.
Middle men have been around for millennia, these new ones are just that much more efficient. But small fry have more resources now too.
> Cross it and die.
Or, differentiate, use these awesome platforms as a traffic source or branding help, focus on direct to the consumer sales and loyalty, and/or build a better product and keep doing so.
Middle men have been around for millennia, these new ones are just that much more efficient. But small fry have more resources now too.
So what was this like 30 years ago? No algo with no internet. You make a business, you try to sell it around your town. If you do really awesome you can get 75% of X business in your town. If you do really really really awesome maybe you can franchise it across the country. But most people topped out at ruling a town.
Now we are competing on a world market. Gains are much bigger, but everyone has 500 competitors. You tend to get nothing or $billions.
Good for the consumer I think, as they can get the best version of X. Not so good for the 499 other businesses that close.
Now we are competing on a world market. Gains are much bigger, but everyone has 500 competitors. You tend to get nothing or $billions.
Good for the consumer I think, as they can get the best version of X. Not so good for the 499 other businesses that close.
>Good for the consumer I think, as they can get the best version of X. //
I look around and I don't see consumers getting the best version of things I see consumers getting what they're told they should want whilst seemingly ignoring major improvements.
Engineered obsolescence seems like a major thing, how does it benefit consumers (except the rich ones who're probably involved in profiting from it themselves - even then they get the downsides of environmental damage and wastage of resources, eventually).
I want a kettle that has the lid catches made in a resilient and repairable way - instead all the kettles I can find (up to about £80) have plastic that is seemingly designed to perish in a year or two at most. My first washing machine lasted about 15 years; now washing machine repair people are telling me that a machine 3 years old is past it and should be replaced. Progress?
Wealthy companies can see off poor companies and bury better designs. Consumers don't tend to look beyond the end of their wallet, or can't afford to.
We're not working together to create better products we're fighting each other to get consumers money.
I look around and I don't see consumers getting the best version of things I see consumers getting what they're told they should want whilst seemingly ignoring major improvements.
Engineered obsolescence seems like a major thing, how does it benefit consumers (except the rich ones who're probably involved in profiting from it themselves - even then they get the downsides of environmental damage and wastage of resources, eventually).
I want a kettle that has the lid catches made in a resilient and repairable way - instead all the kettles I can find (up to about £80) have plastic that is seemingly designed to perish in a year or two at most. My first washing machine lasted about 15 years; now washing machine repair people are telling me that a machine 3 years old is past it and should be replaced. Progress?
Wealthy companies can see off poor companies and bury better designs. Consumers don't tend to look beyond the end of their wallet, or can't afford to.
We're not working together to create better products we're fighting each other to get consumers money.
So I hear the washing machine story a lot. And it is true, insomuch as a 1970s washing machine would last for 20 years, and a 2010 washing machine will last for 6 years. Good read here:
http://vancouversun.com/news/staff-blogs/myth-or-legend-the-...
The 1950s washing machine cost the equivalent of $5000. A modern one can be had for $300, and wash clothes far far far better. You can buy one every 5 years for the rest of your life, and come out way ahead.. so why not?
http://vancouversun.com/news/staff-blogs/myth-or-legend-the-...
The 1950s washing machine cost the equivalent of $5000. A modern one can be had for $300, and wash clothes far far far better. You can buy one every 5 years for the rest of your life, and come out way ahead.. so why not?
>You can buy one every 5 years for the rest of your life, and come out way ahead.. so why not?
For me the main reason is environmental impact which isn't accounted for properly in the price AFAICT. I'm currently trying to recycle parts from an old machine - many of which are polypropylene - but which despite bearing recycling logos aren't seemingly recyclable anywhere. Not even the ferrous seems to be wanted any more - stainless steel drum, few parts from aluminium, rest seems to be destined for landfill.
I'm talking about turn of the millennium washing machine (front-loader, UK) versus a current one. Price seems pretty comparable from what I recall.
For me the main reason is environmental impact which isn't accounted for properly in the price AFAICT. I'm currently trying to recycle parts from an old machine - many of which are polypropylene - but which despite bearing recycling logos aren't seemingly recyclable anywhere. Not even the ferrous seems to be wanted any more - stainless steel drum, few parts from aluminium, rest seems to be destined for landfill.
I'm talking about turn of the millennium washing machine (front-loader, UK) versus a current one. Price seems pretty comparable from what I recall.
Negative externalities are a big problem in almost any free market type situation. This is no exception.
A modern washing machine can be had for $300 in large part thanks to more automated manufacturing, better materials and electronics. I don't think there's any fundamental reason why someone couldn't build a reliable, efficient, repairable modern washing machine for close to the price of current machines - the extra cost would be miniscule compared to the cost of building a functional washing machine in the first place. They just don't because it means more sales.
> You can buy one every 5 years for the rest of your life, and come out way ahead.. so why not?
This is the principle behind planned obsolescence [0]. While I agree it may in some cases benefit the consumer, it generally seems designed more to maximize volume of sales and leads to degradation of product quality overall.
[0] https://en.wikipedia.org/wiki/Planned_obsolescence
This is the principle behind planned obsolescence [0]. While I agree it may in some cases benefit the consumer, it generally seems designed more to maximize volume of sales and leads to degradation of product quality overall.
[0] https://en.wikipedia.org/wiki/Planned_obsolescence
Here is my counter argument to this.
If there was a way to say, make a $300 washing machine last 20 years for only $100 more.. there would be a huge incentive for a new washing machine manufacturer to sell a $600 washer machine guaranteed to last 20 years.
Sure he only made $200 more profit than the guy selling the $300 washer machine, and he lost 3 future sales.. but he has 0% of the market to start with. Not like he has anything to lose.
I suspect we could make a 20 year washer for less than $5000.. but I bet it would still be a lot. Say $2000. And even at that price, still cheaper to the user to throw away the $300 washer every 5 years.
If there was a way to say, make a $300 washing machine last 20 years for only $100 more.. there would be a huge incentive for a new washing machine manufacturer to sell a $600 washer machine guaranteed to last 20 years.
Sure he only made $200 more profit than the guy selling the $300 washer machine, and he lost 3 future sales.. but he has 0% of the market to start with. Not like he has anything to lose.
I suspect we could make a 20 year washer for less than $5000.. but I bet it would still be a lot. Say $2000. And even at that price, still cheaper to the user to throw away the $300 washer every 5 years.
The argument against planned obsolescence is not an economic one but rather one against the immense waste it creates. The so-called "fast fashion" model now employed by H & M and other clothing retailers also falls into this model and it's an established business model in many other spaces as well.
If you create products that need to be thrown out and bought again cyclically, you create a much higher volume of sales. The problem with this is that our current recycling capacity is not able to handle the excess in resultant waste products.
If you create products that need to be thrown out and bought again cyclically, you create a much higher volume of sales. The problem with this is that our current recycling capacity is not able to handle the excess in resultant waste products.
I think a solution to planned obsolescence would be to require prominent labelling of guaranteed product lifetimes. (Including "0 Months" if they aren't willing to offer a warranty.) That way consumers can judge products based on lifetime value instead of just the immediate price.
Is it? Long lasting durable white goods are available if you purchase from the manufacturer's commercial line - they are built to higher standards as businesses purchase them based on lifetime ROI. However, few consumers buy them as the bottom line price is too high.
Just face it, people are cheap and care most about the sticker price.
Just face it, people are cheap and care most about the sticker price.
Consumers don't buy based on lifetime value because that's not the choice presented to them.
Most likely the consumer store they go to doesn't even carry the commercial lines, and even if they do, the fact that they last longer isn't made obvious. There's no incentive for stores make that information readily available to consumers, because they benefit just as much from planned obsolescence as the manufacturer. When all people can see is the sticker price, is it any wonder that that's what drives their decisions?
If there were a big sticker saying that the one that costs 50% more last 10 years instead of 2, I think consumers would happily buy the more expensive one. They're cheap, but they're not stupid.
Most likely the consumer store they go to doesn't even carry the commercial lines, and even if they do, the fact that they last longer isn't made obvious. There's no incentive for stores make that information readily available to consumers, because they benefit just as much from planned obsolescence as the manufacturer. When all people can see is the sticker price, is it any wonder that that's what drives their decisions?
If there were a big sticker saying that the one that costs 50% more last 10 years instead of 2, I think consumers would happily buy the more expensive one. They're cheap, but they're not stupid.
Coming soon: The rise of the washing machine rent / lease
https://www.rentacenter.com/appliances/washers-and-dryers
https://www.rentacenter.com/appliances/washers-and-dryers
I completely disagree on most of these points.
1. Apps - Yes sandboxed and owned by apple or google.
2. Online site - No, not at all. There are a million other platforms for paid traffic. There is literally billions of places to get referral traffic, millions of which are social. Organic relies on Google, but they are much much better than any reasonable alternative. Following their rules is incredibly simple - don't cheat and produce good content. Horror stories exist but they are tiny tiny minorities.
3. Physical Product - No, you don't have to go to amazon at all. Why would you even think that? Make an ecommerce store just like millions of other brands and millions of individuals.
4. Make a mistake back then - Change your sign. Now just buy a new domain. What about the internet prevents you from changing branding? Yeah you need to rebuild your organic, but thats the penalty for being a shit brand.
Algorithm only rules what you let it, and in some cases (organic) its the best thing you could hope for (if your brand is quality).
Everybody games the algorithm, but if you cross it you die? ...okay.
1. Apps - Yes sandboxed and owned by apple or google.
2. Online site - No, not at all. There are a million other platforms for paid traffic. There is literally billions of places to get referral traffic, millions of which are social. Organic relies on Google, but they are much much better than any reasonable alternative. Following their rules is incredibly simple - don't cheat and produce good content. Horror stories exist but they are tiny tiny minorities.
3. Physical Product - No, you don't have to go to amazon at all. Why would you even think that? Make an ecommerce store just like millions of other brands and millions of individuals.
4. Make a mistake back then - Change your sign. Now just buy a new domain. What about the internet prevents you from changing branding? Yeah you need to rebuild your organic, but thats the penalty for being a shit brand.
Algorithm only rules what you let it, and in some cases (organic) its the best thing you could hope for (if your brand is quality).
Everybody games the algorithm, but if you cross it you die? ...okay.
It all seems pretty bleak, until you think about customer perspective.
Online retail is always a race to the bottom, as mostly all anyone cares about is price. When I was in the business, it was a continual hunt for new/unknown products we could sell at a decent profit before other sellers got on them and the margin got trashed.
For a niche product it seems a little odd that Amazon would make their version half the price. Then again, they may argue that theirs is a 'budget' version, and thus it doesn't compete with the original.
For a niche product it seems a little odd that Amazon would make their version half the price. Then again, they may argue that theirs is a 'budget' version, and thus it doesn't compete with the original.
"Your margin is my opportunity" -- Jeff Bezos
Ug. I know exactly what you are saying, but at least some people also care about quality; however, in the race to the bottom it is very difficult for the customer to assess quality and for the supplier/manufacturer to maintain quality.
I don't know if there is a solution to this.
I don't know if there is a solution to this.
The reason AmazonBasic's offerings tend to dominate their respective markets isn't because they are the cheapest option. They dominate because they are the cheapest option which you can trust to work and continue working for whatever is considered a reasonable lifespan for that category of good.
You're right in that people care about quality, it's just that quality products don't have to cost as much as you think they do.
You're right in that people care about quality, it's just that quality products don't have to cost as much as you think they do.
AmazonBasics provides a nice counter-balance to all the garbage that's currently being sold on Amazon and propped up by fake reviews. They're offering a solid no-frills product at a good price.
got a camera stand. averageish quality at discount price, and I think that's a very good formula, perfect fit for an online seller. not to shoddy to get a bad name, good enough for what it does and priced among the cheapo option of which is the better.
I think most e-commerce companies end up the following:
-1-2 person companies where one person does competitive software and the other hunts for products with good margins to sell
- large established companies with special deals with e-tailers no small sellers can compete with
-1-2 person companies where one person does competitive software and the other hunts for products with good margins to sell
- large established companies with special deals with e-tailers no small sellers can compete with
a) The product is not that niche. If it were truly niche, Amazon wouldn't be interested.
b) Even at $20, I'm sure they are making plenty of profit. It's basically just a hunk of metal.
b) Even at $20, I'm sure they are making plenty of profit. It's basically just a hunk of metal.
Amazon would do (and probably still does) this in another way, too. When I was selling on Amazon for a bookstore, our strategy was try to find books that Amazon didn't have on the site, then sell them, and if any sold well we'd send massive quantities to Fulfillment By Amazon so we'd sell a lot and not have to ship each copy individually. The first time this happened, we sold something really well for 5 or 6 months, and then it stopped selling completely. Turns out Amazon started carrying it and was selling it far below list price. Then it happened again with another book after a few months of good sales. And then again. After the third or fourth time Amazon suddenly undercut us like that, we gave up on the practice, since between the already low FBA margins and the cost of returning all the unsold products to us (and the publisher) since we couldn't move them anymore, we weren't making enough for it to be worth the effort.
Ouch, what did you guys end up doing? Move to your own platform?
We stopped shipping things to FBA. Sadly we still had to sell on Amazon since it's the best way to sell books online, even with their shenanigans. But without FBA benefits there's no way to compete with Amazons deep discounts on new books, so we pretty much only sold used books.
It feels absolutely horrible knowing that the only way to make any money online with books is to sell on your biggest competitor's site.
It feels absolutely horrible knowing that the only way to make any money online with books is to sell on your biggest competitor's site.
Right, because everyone just has their own "platform". And one that can compete with Amazon no less.
Yes, it happens all the time on Amazon. Not only Amazon itself, but also other companies observing hot sellers (there is an API for that), then "cloning" the item and ordering manufacturing in Shenzhen. If you complain to Amazon, your selling privileges might be removed... Amazon desperately needs a competitor.
In theory though, if Amazon is making a superior product that's cheaper, isn't that what competition is supposed to achieve? I've bought a few AmazonBasics(cables, mostly) and have been pleased with the quality, but it could be radically different with other products.
But that's the thing, it's a little bit questionable for Amazon to be a competitor. They started out as a partner that offered a retail platform for Rain Design, only to turn around and come up with a cheaper product. Even though it's perfectly legal, there's still an expectation of trust, which they've violated.
Would you sell products on a platform knowing that if you were too successful the people operating the platform would turn around and come out with a cheaper product? I wouldn't.
Would you sell products on a platform knowing that if you were too successful the people operating the platform would turn around and come out with a cheaper product? I wouldn't.
Grocery chains have had store brands since before the internet, so this conflict of interest is not novel.
Lots of those are manufactured by the same companies that make the branded ones. So they can still get their cut.
What's to stop the "same companies" from working with Amazon to do the same? Amazon Hair Conditioner (made by Pantene"
Perhaps that is already happening, with a select few manufacturers. But consider that many marketplace sellers are third parties (e.g. an electronics shop). Or other manufacturers with different costs (many factors affect this... location, workforce..). What happens with these?
I do wonder if Amazon are making any kind of profit on these items. With their long term strategy they can very well afford to make a loss just to undercut the competition and put their products out there, make a name.
I do wonder if Amazon are making any kind of profit on these items. With their long term strategy they can very well afford to make a loss just to undercut the competition and put their products out there, make a name.
They can do cost/benefit analysis. They don't have to pay themselves 15% of the price including shipping in fees, they have good relationships with cheap overseas manufacturers (in China you pay literally pennies for plastic stuff in large quantities) utilizing economy of scales, they know the exact demand/sales of their competitor/"partner", probability they can convert competitor's sales into their own sales, control the visibility on their platform etc. I am sure they make larger profit than what they would get by taking a cut from a 3rd party seller. Or they are irrational, which I don't believe.
Amazon isn't manufacturing these products either. They're just cutting out the middleman and going straight to the source in exactly the same manner as grocery stores do with their private labels.
Right - if you are already having a product made in China, you are the middle man. If you are actually making the product yourself, then Amazon might come to you and create an off-brand version with some trivial differences. But, in any case the designs of simple products are not nearly as sacred as the actual manufacture of them.
Unfortunately, it does have a depressing effect on new design and innovation. And it certainly seems that the low-cost Chinese manufacturers haven't got the knack for originality yet.
Unfortunately, it does have a depressing effect on new design and innovation. And it certainly seems that the low-cost Chinese manufacturers haven't got the knack for originality yet.
It is questionable because no one has been able to do it before. Free markets yada yada. . . I would sell a product until I couldn't sell any more regardless of the risk.
If only copyrights on media properties were this fluid.
If only copyrights on media properties were this fluid.
Absolutely not true.
Supermarket own-brand has been around for years and years, along with department store own-brands. The original brand sells based on brand reputation and (perceived) quality of product.
This is exactly the same.
Supermarket own-brand has been around for years and years, along with department store own-brands. The original brand sells based on brand reputation and (perceived) quality of product.
This is exactly the same.
That's not a great comparison, because of the way house brands are marketed -- basically store brands are marketed to the left of the name brand and cost a few margin points less. One of the reasons for store brands to exist is to incentivize manufacturers to buy the other product supermarkets sell -- premium shelf space.
Amazon is a big catalog, and they play all sorts of games with how and why they prioritize listings.
Amazon is a big catalog, and they play all sorts of games with how and why they prioritize listings.
No only that, walmart will use their purchasing power to force manufacturers to make products specifically for them. Examples of this include things like specific SKUs that are smaller so that walmart can sell similar products at a lower price (e.g. 12oz versus 16oz).
I meant that it is questionable to the parent because Amazon has never done it before.
I would, as long as selling my products with their platform still gives me more profit than not selling with it.
This happens constantly on the iOS platform. Popular apps are replaced by built in iOS features.
My business strategy would probably change to proving the market for my product before selling my business to the people operating the platform for slightly less than it would cost for them to set up a competitor product.
That would likely be profitable, but only as long as you can keep picking winners with your rolled-over cash.
That would likely be profitable, but only as long as you can keep picking winners with your rolled-over cash.
[deleted]
Most people seem perfectly happy to use AWS.
That's one possible benefit. But try to compete with Amazon on price directly; many (now former) sellers reported having their accounts under review shortly after (often leading to permanent selling rights removal - there's always some odd item that you might have in your huge catalog, even if you never sold one, that might be interpreted as not allowed on Amazon) and nowadays many small operations just try to avoid competing on items Amazon sells itself because of fear of getting kicked out. That's not beneficial to customers at all. So basically Amazon might be heading to be in this mode:
- allow 3rd party sellers/manufacturers to sell items - once items are hot and are easily clonable, start manufacturing them - let original manufacturers bleed or kick them out if they compete on price with you - wait for another batch of sellers to identify next hot item - repeat
- allow 3rd party sellers/manufacturers to sell items - once items are hot and are easily clonable, start manufacturing them - let original manufacturers bleed or kick them out if they compete on price with you - wait for another batch of sellers to identify next hot item - repeat
Ah yes, the dream of the free market. Create a product that is successful, only to be driven out of business by a monstrously large corporate entity that can take advantage of economies of scale better than you can. Ignore the fact that the majority of companies cant actually compete with that behavior.
> In theory though, if Amazon is making a superior
> product that's cheaper, isn't that what competition
> is supposed to achieve?
If it's too easy to rip off somebody else's idea, you stifle innovation.
But if you go too far in the other direction, innovation gets stifled that way as well.
Yup, and they've (as far as I've heard -- could be wrong) threatened to blacklist sellers who move to upstarts like Jet or even if they sell more prominently on eBay.
Perhaps I don't know the definition of anticompetitive, but I feel like this fits the bill.
Perhaps I don't know the definition of anticompetitive, but I feel like this fits the bill.
I haven't heard that. They have a rule that you can't sell items elsewhere for less than you're selling them on Amazon for, but otherwise there's no restrictions.
> They have a rule that you can't sell items elsewhere
That's a pretty anti-competitive rule if true.
Essentially it means you cannot sell on Jet.com because of how Jet.com's pricing is calculacted (any product COULD be cheaper on there if you stack enough of them).
That's a pretty anti-competitive rule if true.
Essentially it means you cannot sell on Jet.com because of how Jet.com's pricing is calculacted (any product COULD be cheaper on there if you stack enough of them).
You can limit the quantity on Jet, and you can put the price high enough that even with stacking it comes at to parity with Amazon. Or you could have similar stacking discounts by creating multipacks on Amazon.
See https://www.amazon.com/gp/help/customer/display.html?nodeId=... near the end.
See https://www.amazon.com/gp/help/customer/display.html?nodeId=... near the end.
The Jet threat came to a friend of mine, but I think you're right regarding selling items for less. There are a few mitigations for that specific restriction which have allowed some sellers to continue selling on multiple channels, but though some are likely obvious, I'm pretty sure I signed my right away to talk about said mitigations in public.
If not, I'll reply back with more. Will have to check.
If not, I'll reply back with more. Will have to check.
Form a Nevada-based LLC specifically for selling on Jet for $500; ignore Amazon.
Sure, as long as they aren't the same name, and you have a way to ship those orders separately from Amazon ones.
But then don't complain if Amazon finds out and bans you.
But then don't complain if Amazon finds out and bans you.
Usual stuff when dealing with Amazon - never use the same browser/IP address/geographical location with two different accounts. Use different VPNs for different accounts/companies. Doable. Only the paranoid survive.
> and you have a way to ship those orders separately from Amazon ones
What do you mean by this? How likely would it be for a seller to even be in a position to ship orders from multiple websites in the same box? And how would Amazon find out without buying things on competitor websites and checking return addresses?
What do you mean by this? How likely would it be for a seller to even be in a position to ship orders from multiple websites in the same box? And how would Amazon find out without buying things on competitor websites and checking return addresses?
>How likely would it be for a seller to even be in a position to ship orders from multiple websites in the same box? And how would Amazon find out without buying things on competitor websites and checking return addresses?
Well firstly if you do something stupid like FBA multi-channel fulfilment, AZ may catch on. I don't mean shipping different orders together, I mean shipping from the same warehouse.
If the value is significant, I wouldn't put it past amazon to place a test order. Probably unlikely, but when you're breaking your business agreements, do it properly.
I have heard horror stories of people doing well selling some product buying from the manufacturer, and Amazon went to the manufacturer and bought on condition they don't sell the product to anyone else.
Well firstly if you do something stupid like FBA multi-channel fulfilment, AZ may catch on. I don't mean shipping different orders together, I mean shipping from the same warehouse.
If the value is significant, I wouldn't put it past amazon to place a test order. Probably unlikely, but when you're breaking your business agreements, do it properly.
I have heard horror stories of people doing well selling some product buying from the manufacturer, and Amazon went to the manufacturer and bought on condition they don't sell the product to anyone else.
> If you complain to Amazon
About what, exactly? Amazon isn't in the business of deciding trademark/copyright/patent disputes. If a clone of a product is violating IP, then you need to handle it legally. If there is no IP to protect, then you made a mistake.
About what, exactly? Amazon isn't in the business of deciding trademark/copyright/patent disputes. If a clone of a product is violating IP, then you need to handle it legally. If there is no IP to protect, then you made a mistake.
Sure, but we all know costs of a litigation which most sellers on Amazon can't afford - Amazon takes most of the profit, 15% default fees leave very little to normal sellers, usually under 5% as the (re-)pricing competition is now algorithmic, resembling HFT. Then if you want to have your product featured on Amazon (meaning your offer will be the default one even if it is more expensive than somebody else's), you need to contact the category manager and it's up to their discretion to decide (which reeks of a high potential of corruption/profit sharing etc). On one hand it's pretty cool you can automate price responses and very beneficial to the customer, on the other the game has an increasing risk of being rigged.
> Sure, but we all know costs of a litigation which most sellers on Amazon can't afford
That's an excellent argument for changing how patent litigation works, but that has nothing to do with Amazon.
> Amazon takes most of the profit, 15% default fees leave very little to normal sellers
The trade-off being potentially billions of eyes on your product. Again, that has nothing to do with IP.
That's an excellent argument for changing how patent litigation works, but that has nothing to do with Amazon.
> Amazon takes most of the profit, 15% default fees leave very little to normal sellers
The trade-off being potentially billions of eyes on your product. Again, that has nothing to do with IP.
No. If Amazon is willfully allowing clones that violate IP or other rights, then it is 100% in their interest to take action on that.
It's only a clone if they're violating a brand or other trademark. Otherwise, folks are just upset that their product has now turned into a commodity.
It's not Amazon's job to determine if clones violate IP. That's the purpose of our court system. Amazon will, without a doubt, remove the product given an order to do so. But they aren't going to make a legal determination on whether or not IP laws are being violated.
Expecting them to do that is absurd.
Expecting them to do that is absurd.
Generally, people want to abolish IP and copyright (or any law, for that matter) except when it's in their own interest. Human nature.
Not much talk of the fact that I, as a consumer, can now get an identical product for cheaper. Not identical? Then what is the concern?
Not much talk of the fact that I, as a consumer, can now get an identical product for cheaper. Not identical? Then what is the concern?
How is this different than the private labels of major grocery stores?
Private label products are generally made by the same manufacturer as premium label.
So if Amazon contracted with same manufacturer and just took some of the margin for distribution, that'd be OK (or at least less bad)?
Yeah, most manufacturers would be happy with that deal. It isn't what Amazon is doing though.
When I sell to CostCo, I'm very happy to manufacture their house-branded vitamin C in exchange for them carrying my premium name brand vitamin C in stores as well. I make money on both products. (Heck, I as the manufacturer pay money out of my own pocket to advertise that CostCo branded vitamin C.)
When I sell to CostCo, I'm very happy to manufacture their house-branded vitamin C in exchange for them carrying my premium name brand vitamin C in stores as well. I make money on both products. (Heck, I as the manufacturer pay money out of my own pocket to advertise that CostCo branded vitamin C.)
How do we know that this isn't what Amazon is doing? Maybe they're not doing it with the specific product in the original post, but they're not directly manufacturing all the products under their brand. They're going to some supplier/manufacturer.
Private label manufacturing deals are as secretive as possible so the owner of the market (in this case, Amazon) can change the supplier when it suits them giving them leverage in the negotiation. I'd bet you can find that exact AmazonBasics cable you just bought from the same supplier with a different name on Amazon, too.
Private label manufacturing deals are as secretive as possible so the owner of the market (in this case, Amazon) can change the supplier when it suits them giving them leverage in the negotiation. I'd bet you can find that exact AmazonBasics cable you just bought from the same supplier with a different name on Amazon, too.
Is there anything different with Costco offering a Kirkland Signature anything after they see that product flying off the shelves? Kirkland signature olive oil, balsamic vinegar, coffee, shirts, shoes, peanut butter. Even newer products like air popped quinoa chips or coconut water. If you see something new in everyone's cart one day, two months later there is a kirkland signature brand.
I think one way it is, at least a little, different is Costco is frequently purchasing those products from the original vendor in bulk and handling the packaging / distribution themselves. As a result, $NameBrand is making money on both the branded and generic versions of ProductX.
[deleted]
One $NameBrand is, the rest are not. So for all companies except that chosen one, this is the same; brand-name products being undercut by (someone else's) no-name.
For me there are positives and negatives to this type of move. The small mom and pop stores are supporting local jobs in some cases. In other cases where the product is mass produced overseas, I would prefer the lower priced Amazon Basics product.
CVS a pharmacy in my area does something like this. The slot on the shelf for the brand name product you want is usually empty. The generic CVS brand of that same product is fully stocked right next to it. I sometimes just go to a non-chain pharmacy just so I can get the brand I want.
CVS a pharmacy in my area does something like this. The slot on the shelf for the brand name product you want is usually empty. The generic CVS brand of that same product is fully stocked right next to it. I sometimes just go to a non-chain pharmacy just so I can get the brand I want.
>I sometimes just go to a non-chain pharmacy just so I can get the brand I want.
Is this for drugs or something else? Generic drugs are regulated by the FDA and have to be completely identical to brand name drugs.
Is this for drugs or something else? Generic drugs are regulated by the FDA and have to be completely identical to brand name drugs.
I mean for more OTC stuff like bandages, lotions, etc.
The medical ingredients are identical. Everything else may or may not be. You might want children's medication in a given flavour, or the "fast acting" delivery mechanism that may not be available in the generic format.
Not OP but I see it for many different types of items. Think bandages, ankle wraps, mouth wash, antacids, OTC pain relievers, etc.
You might say that antacids and OTC pain relievers are drugs, and that's fair. But there are other concerns besides the active ingredients. For example, I might prefer the taste of Tums to CVS brand. Or for a personally-true example, I used to find the CVS brand ibuprofen gelcaps to have a funny, sour smell that I didn't notice with Advil. (I don't notice that anymore.) Or my grandmother used to buy a specific brand of some contact lens cleaner (can't remember which), because she found the top much easier to open. The point is it's not always about the efficacy of the drug; sometimes it's about the overall experience.
You might say that antacids and OTC pain relievers are drugs, and that's fair. But there are other concerns besides the active ingredients. For example, I might prefer the taste of Tums to CVS brand. Or for a personally-true example, I used to find the CVS brand ibuprofen gelcaps to have a funny, sour smell that I didn't notice with Advil. (I don't notice that anymore.) Or my grandmother used to buy a specific brand of some contact lens cleaner (can't remember which), because she found the top much easier to open. The point is it's not always about the efficacy of the drug; sometimes it's about the overall experience.
I've noticed this issue too. Some people prefer to use a brand like Tylenol instead of the store brand acetaminophen. But the store will just not keep the Tylenol stocked to force you to by their brand.
They are both the same acetaminophen. However, I do notice that with some meds the store brand isn't an equal because they don't make the gel tabs I prefer (because it's more fast acting than the chalky white tabs), specifically talking OTC allergy meds
They are both the same acetaminophen. However, I do notice that with some meds the store brand isn't an equal because they don't make the gel tabs I prefer (because it's more fast acting than the chalky white tabs), specifically talking OTC allergy meds
Bioequivalence and pharmaceutical equivalence are different.
It's true that generic drugs have the same active ingredients in the same dosage and form, and they're tested to have the same general absorption characteristics. This does not necessarily mean that a brand drug and its generic version are completely identical. For example, many patients prefer Synthroid (a brand-name synthetic thyroid hormone) over levothyroxin (its generic equivalent). The inactive ingredients sometimes affect how a drug's active ingredients behave within an individual, and these are allowed to differ between brand and generic drugs.
This usually doesn't matter; most of the time, brand drugs and their generic versions are close enough. However, generic drugs aren't exactly just a different label on the same medicine, and the differences can be clinically significant. Thus, the medical world has the ability to specify "dispense as written" on prescriptions and on the corresponding insurance claims.
It's true that generic drugs have the same active ingredients in the same dosage and form, and they're tested to have the same general absorption characteristics. This does not necessarily mean that a brand drug and its generic version are completely identical. For example, many patients prefer Synthroid (a brand-name synthetic thyroid hormone) over levothyroxin (its generic equivalent). The inactive ingredients sometimes affect how a drug's active ingredients behave within an individual, and these are allowed to differ between brand and generic drugs.
This usually doesn't matter; most of the time, brand drugs and their generic versions are close enough. However, generic drugs aren't exactly just a different label on the same medicine, and the differences can be clinically significant. Thus, the medical world has the ability to specify "dispense as written" on prescriptions and on the corresponding insurance claims.
My wife had this problem; she took Neoral, a brand-name immuno-suppressant, for many years. CVS, especially their mail-order-specialty pharmacy that my insurance plan forced us to use, kept trying to substitute generic cyclosporine. The problem is that she learned years ago that the generic didn't have the same effect at the same dosage, putting her transplanted liver in jeopardy. Yet month after month, no matter how often her doctors intervened, CVS kept trying to send her the generic.
Last year her transplanted liver failed. She was lucky to get another one; she barely survived and she's still recovering. She's on a different immuno-suppresant now, which the hospital arranged for her to get from an affiliated transplant-specialist pharmacy in NY. CVS' horrible service wasn't responsible for her liver failing (transplants don't last forever) but the incorrect medication and missed doses definitely took its toll, and cost us a lot more than it should have when we had to pay out of pocket to buy emergency doses in-store at whatever pharmacy would supply them.
Last year her transplanted liver failed. She was lucky to get another one; she barely survived and she's still recovering. She's on a different immuno-suppresant now, which the hospital arranged for her to get from an affiliated transplant-specialist pharmacy in NY. CVS' horrible service wasn't responsible for her liver failing (transplants don't last forever) but the incorrect medication and missed doses definitely took its toll, and cost us a lot more than it should have when we had to pay out of pocket to buy emergency doses in-store at whatever pharmacy would supply them.
I wonder if the best way to get them to change though, isn't to sue for damages suffered from their deceptive business practices.
It's also definitely a licensing issue for their pharmacists. If they can't store and handle customer records (special needs, interactions, etc) they shouldn't be in business.
It's also definitely a licensing issue for their pharmacists. If they can't store and handle customer records (special needs, interactions, etc) they shouldn't be in business.
It's pretty much impossible to gather the resources needed for a lawsuit against a huge corporation that's got health insurance companies in their pocket, when you're trying to acquire the drugs needed to not die this week.
FDA doesn't seem to make this distinction. They print "FACT: FDA requires generic drugs to have the same quality and performance as brand name drugs." in bold type here[0]. Perhaps 'dispense as written' is better put as 'dispense in a way that I get some sweet pharma kickbacks'.
[0]http://www.fda.gov/drugs/resourcesforyou/consumers/buyingusi...
[0]http://www.fda.gov/drugs/resourcesforyou/consumers/buyingusi...
Agreed; my point is that the FDA doesn't make that distinction. The FDA's definition of "same performance" is close, but it's not always close enough.
(I once worked on a system that had to special-case pricing for Synthroid specifically because the FDA-approved generics aren't quite the same to a lot of people, and I ended up marrying someone who gets moody when the pharmacy gives her generic Synthroid by mistake.)
(I once worked on a system that had to special-case pricing for Synthroid specifically because the FDA-approved generics aren't quite the same to a lot of people, and I ended up marrying someone who gets moody when the pharmacy gives her generic Synthroid by mistake.)
Perceived reputation, color and packaging plays a big role in perceived drug efficacy[0], I wonder if a double blinded trial would show the same results you have seen anecdotally.
[0] http://www.theatlantic.com/health/archive/2014/10/the-power-...
[0] http://www.theatlantic.com/health/archive/2014/10/the-power-...
I'd be interested to see results from such a trial.
Closer to home, we twice found out that the pharmacy gave her a generic when she developed quirks 4-5 days after she started taking a new bottle. Sort of the reverse of a placebo effect -- she thought she was on the brand all along, and she didn't think to check until things didn't feel right.
Humans are complicated.
Closer to home, we twice found out that the pharmacy gave her a generic when she developed quirks 4-5 days after she started taking a new bottle. Sort of the reverse of a placebo effect -- she thought she was on the brand all along, and she didn't think to check until things didn't feel right.
Humans are complicated.
Then isn't the FDA's claim false, if people detect different effects from brand name vs generic?
Not sure why this leaves such a bad taste in my mouth. Obviously, a lot of major retailers already do this. It just seems like Amazon can do this at a much bigger scale and/or at the same scale as Walmart and end up putting a lot of people out of business.
Because Amazon claims to be your partner in business when they're really using you until they have no more need for you.
Other major retailers may compete with each other with similar items, but they're not partners, they're competitors.
Other major retailers may compete with each other with similar items, but they're not partners, they're competitors.
Amazon is a lot like China.
You go make your stuff in China it's cheap, they have the factories, the facilities. You do well.
Once they, in China and at Amazon, notice that what you're doing is selling quite well they make the same thing and cut you out.
Edit: Spelling.
You go make your stuff in China it's cheap, they have the factories, the facilities. You do well.
Once they, in China and at Amazon, notice that what you're doing is selling quite well they make the same thing and cut you out.
Edit: Spelling.
AMZN's growth prospects increasingly resemble abuse.
Half their success at breaking into new business is consumer trust / lock-in. ('they already have my address & payment info, let's do business with them again').
The situation isn't as nice for their merchant customers; this is amazon's achilles heel. Companies like crowdsupply are the leading edge of a trend to use logistics & sales smarts to help merchants rather than compete with them.
amazon has ridden the wave of consolidation until now, but let's cross our fingers that the tendency will toggle to diversification.
Half their success at breaking into new business is consumer trust / lock-in. ('they already have my address & payment info, let's do business with them again').
The situation isn't as nice for their merchant customers; this is amazon's achilles heel. Companies like crowdsupply are the leading edge of a trend to use logistics & sales smarts to help merchants rather than compete with them.
amazon has ridden the wave of consolidation until now, but let's cross our fingers that the tendency will toggle to diversification.
'they already have my address & payment info, let's do business with them again'
I had hoped Apple Pay would help here. I order a lot on the phone. No way I am going to input address, payment info, and create a password just so I can spend $15 on something from the phone. I will just buy Amazon or wait to go to the store.
With Apple Pay I would think the address info could be transmitted to the merchant and I could pay with my thumbprint. The hoopla on Apple Pay was on point of sale transactions, but that was a yawn to me--saves me a swipe, who cares? It's shopping on the phone that needs a boost. But it seems few online merchants take Apple Pay and Apple has no easy way to find those that do.
I guess Google Shopping is going for this problem but it doesn't deliver to my area.
I had hoped Apple Pay would help here. I order a lot on the phone. No way I am going to input address, payment info, and create a password just so I can spend $15 on something from the phone. I will just buy Amazon or wait to go to the store.
With Apple Pay I would think the address info could be transmitted to the merchant and I could pay with my thumbprint. The hoopla on Apple Pay was on point of sale transactions, but that was a yawn to me--saves me a swipe, who cares? It's shopping on the phone that needs a boost. But it seems few online merchants take Apple Pay and Apple has no easy way to find those that do.
I guess Google Shopping is going for this problem but it doesn't deliver to my area.
[deleted]
Why is this legal? Aren't they using their dominance in one market to enter another market? Isn't that what antitrust suits are for?
I'm not being rhetorical, I'm actually asking.
I'm not being rhetorical, I'm actually asking.
It's not an anti-trust case because there are literally thousands of other retailers - both online and brick&mortar. Amazon has nowhere near a monopoly on anything here, they are running a store. Just like walmart, target, costco, Safeway, etc - all of which have their own house brands.
I find it incredibly hard to believe that Amazon is not a monopoly. This Forbes[0] article from 2013 states that Amazon had more sales than it's next 12 competitors combined, and that it's sales were growing faster than overall online sales. If we take this as read, that means Amazon is probably more dominant in 2016 than it was in 2013.
That doesn't seem like meaningful competition, that seems like the other retailers are keeling over.
[0] http://www.forbes.com/sites/timworstall/2013/09/01/fascinati...
That doesn't seem like meaningful competition, that seems like the other retailers are keeling over.
[0] http://www.forbes.com/sites/timworstall/2013/09/01/fascinati...
Unfortunately this type of behavior is not uncommon with Amazon's business practices. The book "The Everything Store" by Brad Stone was a very good book. But it also shows how Amazon deploys these types of business practices. With the huge market share Amazon has, it has crushed many smaller business just by selling cheaper products. For example, it took a huge loss on selling Diapers just to destroy a competitor. Because it has so many resources, it can do these types of things.
Isn't this similar to what Grocery stores have done for years? Cereal, pasta, bread, canned goods, you name it, there's a store brand.
Big difference with food, is that it's usually not quite as tasty. They cut corners to make it cheap. Whether that translates into some silly plastic thing Amazon is taking over production of, I don't know.
Yeah, I doubt Amazon is cutting any corners. /s
Also relevant from 2 months ago:
"Company Makes $70M Selling Random Stuff on Amazon" https://news.ycombinator.com/item?id=11186289
I also remember another somewhat 'recent' article about a secretive company doing what AmazonBasics is doing now but I can't locate it.
"Company Makes $70M Selling Random Stuff on Amazon" https://news.ycombinator.com/item?id=11186289
I also remember another somewhat 'recent' article about a secretive company doing what AmazonBasics is doing now but I can't locate it.
AWS is a gigantic platform for doing just this. It's not just a retail thing.
Is there any evidence of this? I have to admit, the amount of data Amazon would have about the intimate inner workings of companies using AWS is terrifying.
It's hard to be sure that that's what Amazon is doing with AWS, but Simon Wardley has done some detailed and compelling analysis to suggest that they are and why.
One of Wardley's central theses is that it would make little sense for Amazon to do AWS if not to act as a sensing engine:
http://blog.gardeviance.org/2014/03/understanding-ecosystems...
One of Wardley's central theses is that it would make little sense for Amazon to do AWS if not to act as a sensing engine:
http://blog.gardeviance.org/2014/03/understanding-ecosystems...
Yikes. Makes me wonder what kind of recourse could be possible. Often I see a lot of "death to IP protections!" chants around here, which makes this situation all the more interesting. In my view this is a pretty clear 'derivative' infringment, and if there's enough of them, could there be a class-action approach to signing up those who can make the connection? "Ripping-shit-off" isn't a very pleasant business model in my opinion.
Except in many cases there was no rip off involved.
Very common example: Someone sees something on alibaba that looks cool. Say an apple peeler for $.50. So they buy 10k of them, slap on a label that says BlahBlah Inc, and sell on Amazon for $10. Maybe they give away 500 of them on review sites to build up some reviews for the brand BlahBlah Inc apple peelers.
Other people buy the same thing from alibaba, slap a different label on, sell for $8.
If Amazon goes straight to the manufacturer and asks for it in a different color to sell for $5 under the "Amazon Basics" label.. who really got ripped off? The invention was already there. The wholesaler was already there. It is just shifting around who gets what piece of the profit pie.
Can see 100s of these kind of sellers on /r/FulfillmentByAmazon
Very common example: Someone sees something on alibaba that looks cool. Say an apple peeler for $.50. So they buy 10k of them, slap on a label that says BlahBlah Inc, and sell on Amazon for $10. Maybe they give away 500 of them on review sites to build up some reviews for the brand BlahBlah Inc apple peelers.
Other people buy the same thing from alibaba, slap a different label on, sell for $8.
If Amazon goes straight to the manufacturer and asks for it in a different color to sell for $5 under the "Amazon Basics" label.. who really got ripped off? The invention was already there. The wholesaler was already there. It is just shifting around who gets what piece of the profit pie.
Can see 100s of these kind of sellers on /r/FulfillmentByAmazon
Okay, a first-to-market scenario like you describe doesn't fit with the 'rip off' mentality, and I get that. It's simply herding toward a new market by way of being the first to get traction. Sure, if Amazon Basics sells a 'household paper shredder' it's not like the concept was lifted whole cloth, and the manufacturing diversity is already inherent. That's fine, I see that.
But, that's not at all what I'm describing though, and which is far more destructive: if an actual, innovative product gets copied. If such cases are rare with Amazon as the copying entity, it still matters from a recourse standpoint. So, in a different example, if a company creates an innovative paper cutter, unlike any other on the market, patents it, makes it, and it sells well, this is the scenario: if 15 months later Amazon Basics has a design and functioning clone at a price that undercuts the original, then that should be a case to hash out in court and if violating trade / patent protections, slapped with punitive fines.
But, that's not at all what I'm describing though, and which is far more destructive: if an actual, innovative product gets copied. If such cases are rare with Amazon as the copying entity, it still matters from a recourse standpoint. So, in a different example, if a company creates an innovative paper cutter, unlike any other on the market, patents it, makes it, and it sells well, this is the scenario: if 15 months later Amazon Basics has a design and functioning clone at a price that undercuts the original, then that should be a case to hash out in court and if violating trade / patent protections, slapped with punitive fines.
Sure anyone who violates a patent and sells it should be punished. I am sure it happens, but it doesn't seem to be what most of Amazon Basics is doing...
> In my view this is a pretty clear 'derivative' infringment
That's copyright law. This is a patented product. As long as your product doesn't infringe on the patent, it's not an infringement.
That's copyright law. This is a patented product. As long as your product doesn't infringe on the patent, it's not an infringement.
I get that distinction, and wonder why the patent isn't solid enough to pursue action against what looks like a direct imitation. If a copy can get so close but still avoid 'infringement' then the patent isn't doing its function properly. Strange.
I wonder how you can get a patent on a laptop stand.
I assume it is a design patent.
That's what I would gather as well...sounds like, well, maybe they didn't. Or they didn't get a very good one? Tough to tell, I feel for them though.
One recourse is seeking a general exclusion order at the ITC if you have patents. You don't get money but you can get customs to prevent importation.
If you don't have parents then they aren't ripping off your IP.
If you don't have parents then they aren't ripping off your IP.
I'm not sure that making a stand for something deserves protection.
If so, does the protection go to the first device, or the best in six months? The one blessed by the manufacturer?
What's being ripped off here? Instead this sounds like "underserved market getting noticed - more consumer choice coming."
If so, does the protection go to the first device, or the best in six months? The one blessed by the manufacturer?
What's being ripped off here? Instead this sounds like "underserved market getting noticed - more consumer choice coming."
[deleted]
I don't see the competition, I would still buy the non Amazon Basic one. The only time I grab a Amazon Basic product when I don't need it a "long" time. actually even the amazon basic batteries are worse than any cheap vatra.
if people would care about quality they would mostly spend less money on rebuying the same damn thing.
btw. on the german website the amazon basic thing looks very different when I search for laptop stands (only a direct search 'AmazonBasic laptop stand' would give me the thing in the news and actually even then there is another competitor that isn't Amazon and 10 € cheaper than the Rain Design). it is more close to a product by hama which was there LONG LONG before the Rain Design product. Also Rain Design has sometimes flaws. According to buyers, sometimes you get scratches or rough edges. For 50 bucks thats definiv a NoGo!
btw. on the german website the amazon basic thing looks very different when I search for laptop stands (only a direct search 'AmazonBasic laptop stand' would give me the thing in the news and actually even then there is another competitor that isn't Amazon and 10 € cheaper than the Rain Design). it is more close to a product by hama which was there LONG LONG before the Rain Design product. Also Rain Design has sometimes flaws. According to buyers, sometimes you get scratches or rough edges. For 50 bucks thats definiv a NoGo!
Related PlanetMoney episode:
Episode 586: How Stuff Gets Cheaper http://www.npr.org/sections/money/2014/11/28/366793693/episo...
Episode 586: How Stuff Gets Cheaper http://www.npr.org/sections/money/2014/11/28/366793693/episo...
I feel for Rain Design (I love my mStand); however is this any different to your average supermarket offering lower priced own-brand competitors to their other stock?
I'm wary of business models built around just selling hardware, long term -- it seems like hardware + service combination is the way to prevent this kind of activity from vendors, ghost shift manufacturing, other counterfeiting, and such. Also good for the consumer in a lot of cases. The problem is the products run the risk of being orphaned if the manufacturer stops supporting them at some future date.
They have been doing stuff like this for ages.
If you sell a product on amazon and they decide they want in, you are forced to give them your source or they terminate you. Then they go to your source (or more likely their source) and buy in bulk then undercut you or minimise your listing... and so you are priced out of the market.
If you sell a product on amazon and they decide they want in, you are forced to give them your source or they terminate you. Then they go to your source (or more likely their source) and buy in bulk then undercut you or minimise your listing... and so you are priced out of the market.
Like Bezos needs to move in on a niche aluminium computer stand business. Pick on someone your own size Jeff.
Pretty much everybody selling on amazon should expect this. It's not exactly news.
> Rain Design’s Tai has resigned himself to the competitive threat from Amazon and says he can withstand it if he’s able to foster customer loyalty.
And how do you best do that?
Build your own channel and don't depend on Amazon.
And how do you best do that?
Build your own channel and don't depend on Amazon.
What's needed is a competitor to Prime thats federated.
I would love a one click payment processor that had my cc and shipping info that was low fee, and available on independent web sites.
The small amount of friction of putting in shipping address/cc makes me look to Amazon first.
I would love a one click payment processor that had my cc and shipping info that was low fee, and available on independent web sites.
The small amount of friction of putting in shipping address/cc makes me look to Amazon first.
You can actually use Amazon payments for that...
ShopRunner was giving out 1-year trials and extended them every year for quite a while. I almost never used them.
The other big draw to Amazon, for me, is the reviews. I know it's not perfect, but by and large, items with 4 or 5 star reviews tend to be good. Going outside Amazon leaves me without that, most of the time. Add that to your federated system and I'm sold.
I think that'd be great. Would be a great opportunity for some other retailer to do this. Wal-mart? Target?
But everyone is looking on Amazon first. I know I would. Most have Prime and want to use it above anything else.
Prime isn't sustainable on its own. Amazon can make the loss and still convince investors to stick around. Mom and Pop can't ship you something via airplane for free AND cut price by half.
Prime isn't sustainable on its own. Amazon can make the loss and still convince investors to stick around. Mom and Pop can't ship you something via airplane for free AND cut price by half.
I've never understood how that Rain stand could cost so much and still be so popular (I have one myself). At first I thought it was an official Apple stand but no.
I have it on good authority that supplements will be coming too. Probably starting with basics like a multivitamin.... No clue how deep they'll go though.
Welcome to capitalism, supercharged.
There's a reason that in the long run economic profit of firms is theoretically 0. If you're making substantial margin off a product, and doing so in volume, other companies will naturally want to compete with you to sell it. You either have to innovate faster than them (and thus win customer loyalty) or get into a brutal price competition which pushes both your profits to 0.
Keeping your products off Amazon isn't even a defense against this. It's hard to keep a lucrative product secret for long. Cash cows eventually moo.
Your margin is Amazon's opportunity. Get used to it.
There's a reason that in the long run economic profit of firms is theoretically 0. If you're making substantial margin off a product, and doing so in volume, other companies will naturally want to compete with you to sell it. You either have to innovate faster than them (and thus win customer loyalty) or get into a brutal price competition which pushes both your profits to 0.
Keeping your products off Amazon isn't even a defense against this. It's hard to keep a lucrative product secret for long. Cash cows eventually moo.
Your margin is Amazon's opportunity. Get used to it.
If you have a successful product there will always be a competitor. I think that is a good thing.
I wonder what happens when people give low ratings to Amazon basics items.
If you're suggesting giving low ratings as a reaction to what Amazon's done and not because it's actually a bad product, I really wish you'd reconsider. Seems like a rather slippery slope, to start basing product reviews on something other than the products.
Anti-trust action is going have to come down on Amazon eventually.
This isn't exactly news... This has been happening since we began selling stuff.
You know how to combat that, keep the price the same, and make a name for yourself as the best laptop stand around.
People still buy all kinds of US made products even though there are China made versions for 50-70% off.
You know how to combat that, keep the price the same, and make a name for yourself as the best laptop stand around.
People still buy all kinds of US made products even though there are China made versions for 50-70% off.
This isn't really a Made In US vs China thing. Almost nothing sold in US is made in US.
Yes it is, this is the exact same thing.
There are shop out there that sell knock off purses and watches (exactly the same as on Amazon) yet people still go to Louis Vuitton and buy their purses.
It's a free market, people are welcome to remake a product with a slight change and sell it.
There are shop out there that sell knock off purses and watches (exactly the same as on Amazon) yet people still go to Louis Vuitton and buy their purses.
It's a free market, people are welcome to remake a product with a slight change and sell it.
>Almost nothing sold in US is made in US.
Almost nothing, huh?
http://www.marketwatch.com/story/us-manufacturing-dead-outpu...
Almost nothing, huh?
http://www.marketwatch.com/story/us-manufacturing-dead-outpu...
everyone hates banks but, come on, AMZN is about as filthy of a corporation as they come.
E-Tailer was an odd word choice in the headline. I read a few paragraphs in still trying to learn more about the company "E-Tailer."
Maybe they didn't want the word Amazon in the title twice? Was weird. Who uses the term e-tailer anymore anyway? Seems like a blast of fresh air from 1999.
Agreed. Seems like they were dancing around naming Amazon in the title.
Huh? "Amazon" is the 6th word of the title.
The title makes more sense as: "Got a Hot Seller on Amazon? Prepare for Amazon to Make One Too"
Or even "the e-tailor."
Sounds like we need some title redundancy in the title.
This was an oddly-worded comment. I read two sentences and still didn't understand anything about the referenced "E-Tailer" corporation.
Is this what upvotes have come to?
Is this what upvotes have come to?
Good. Competition is what keeps the quality high and prices low.
No, because when the competition goes bankrupt, they put their prices up and quality no longer matters.
And thus, evil corporation monopolys form.
And thus, evil corporation monopolys form.
Yeah, seriously: "Oh my god, a laptop stand is now being produced at half the price of the previous one! The sky is falling!"
So... one company is upset that another company has entered their market, after they've been scamming consumers, selling a $20 item for $40 for years?
Color me shocked.
Color me shocked.
Just like Shake Shack is "scamming" people by selling an $8 burger when McDonald's sells a burger for 99 cents. What scammers! (sarcasm)
Shake Shack doesn't complain about McDonald's entering its market.
Right - if Shake Shake complained about the $0.99 hamburger, it would be implying "... which is a perfect substitute for our $8 burger."
The issue isn't two laptop stands. It's that one laptop stand is claimed to be a rip-off of another - ie too similar. But it's cheaper so if it's too similar than the first one was a rip-off for the consumer. (ie same product, worse price.)
Yes, one man's rip-off is another man's profit margin but nobody is owed their margin. They can't expect anyone else to cry when their market-control is broken.
The issue isn't two laptop stands. It's that one laptop stand is claimed to be a rip-off of another - ie too similar. But it's cheaper so if it's too similar than the first one was a rip-off for the consumer. (ie same product, worse price.)
Yes, one man's rip-off is another man's profit margin but nobody is owed their margin. They can't expect anyone else to cry when their market-control is broken.
I think the issue is that Amazon has access to their sales numbers. Normally a competitor would have to put in work to infer your sales numbers from, say, an incrementing identifier in the receipt, and you would have some recourse (prevent information from leaking as best you can).
It seems to me there is an obvious conflict of interest.
Consider this; if an employee left to work for a competitor and took such precise information about online sales with them, it would be illegal.
It seems to me there is an obvious conflict of interest.
Consider this; if an employee left to work for a competitor and took such precise information about online sales with them, it would be illegal.
If your product is easily cloned by Amazon, and you cannot afford to sell it for less than Amazon, then you do not deserve to have the dominant market position.
A good, sustainable product is more than just marketing and engineering. It must also be defensible, meaning you need to have an advantage in either product-development (patents, expertise, first-mover advantages) or supply-chain (exclusive manufacturing contracts, access to greater economies of scale). It's almost impossible to beat Amazon in the supply-chain economics, unless you have a highly specialized product and deals with the manufacturer, so you are left to compete in product development. Your product needs to be sufficiently innovative and defensible in order to avoid Amazon cloning it.