Fat profits are one of the telltale signs of an illegal monopoly
March 3, 2024 3:26 AM Subscribe
The amount of profit that Amazon makes from third-party sellers, as opposed to AWS or some other division, might sound like a technical distinction, but it’s essential to the case against the company. The FTC alleges that Amazon’s low-price image is a mirage: According to the FTC, the company actually keeps prices higher than they would be in a competitive market—not just on Amazon but across the internet—squeezing consumers and small businesses in the process. from Amazon’s Big Secret [The Atlantic; ungated]
Ah yes, the Walmart model
posted by infini at 7:18 AM on March 3 [1 favorite]
posted by infini at 7:18 AM on March 3 [1 favorite]
There is an argument to be made that every product you buy online is 30% more expensive than it would be if Amazon didn't exist. Maybe not the full 30% but certainly the Amazon Tax, and the Apple Tax, are something retailers take into account when they are pricing their goods.
I recently got a new iPad and needed a new case for it. I tried to do the responsible thing, I searched for iPad cases outside of Amazon and bought directly from a retailer's website.
The order arrived the next day, fulfilled from the Amazon warehouse 6 miles away.
That product had to be priced the same on the retailer website as Amazon because Amazon will take your product off their pages if you price it cheaper anywhere else.
posted by hippybear at 9:23 AM on March 3 [9 favorites]
I recently got a new iPad and needed a new case for it. I tried to do the responsible thing, I searched for iPad cases outside of Amazon and bought directly from a retailer's website.
The order arrived the next day, fulfilled from the Amazon warehouse 6 miles away.
That product had to be priced the same on the retailer website as Amazon because Amazon will take your product off their pages if you price it cheaper anywhere else.
posted by hippybear at 9:23 AM on March 3 [9 favorites]
This past week I've been idly price-shopping a few things, and Amazon has not been the cheapest. In the case of one name-brand thing, Amazon were like 15% more expensive. But usually they're competitive.
I think that where Amazon currently wins with most shoppers is that they are just so damn EASY. They remember what you've been browsing, and remind you with ads and emails. Ordering is near bulletproof, delivery is almost always fast and reliable, with great order-tracking, and returns and problem-fixing are efficient, in my experience. I'm in a large city, which helps.
Last year, I needed a set of tires for an older bike. My local bike shop said they could get them, so I walked in, ordered and paid. Fast-forward a week; they still didn't have them and couldn't tell me when they would. I canceled the order, and went to a further-away bike shop who confirmed that they had inventory. With hindsight I could have saved over a week and some gas by just ordering them online.
I also recently went to a favorite store for workpants. The place was near empty yet also understaffed, so it wasn't easy to get help. I left without buying anything. It really seems that a lot of brick&mortar retail has not gotten back on its feet since the pandemic.
So... the hassle of in-person shopping at underwhelming stores, or browsing and ordering from home, in my jammies... hmmmm. Some chain stores have added Amazon-like online ordering, with free pickup at the nearest branch or home delivery; I've had good luck with a few such purchases. It seems that retail is still in flux, and Amazon is still the 800lb gorilla in the ring.
posted by Artful Codger at 9:32 AM on March 3 [5 favorites]
I think that where Amazon currently wins with most shoppers is that they are just so damn EASY. They remember what you've been browsing, and remind you with ads and emails. Ordering is near bulletproof, delivery is almost always fast and reliable, with great order-tracking, and returns and problem-fixing are efficient, in my experience. I'm in a large city, which helps.
Last year, I needed a set of tires for an older bike. My local bike shop said they could get them, so I walked in, ordered and paid. Fast-forward a week; they still didn't have them and couldn't tell me when they would. I canceled the order, and went to a further-away bike shop who confirmed that they had inventory. With hindsight I could have saved over a week and some gas by just ordering them online.
I also recently went to a favorite store for workpants. The place was near empty yet also understaffed, so it wasn't easy to get help. I left without buying anything. It really seems that a lot of brick&mortar retail has not gotten back on its feet since the pandemic.
So... the hassle of in-person shopping at underwhelming stores, or browsing and ordering from home, in my jammies... hmmmm. Some chain stores have added Amazon-like online ordering, with free pickup at the nearest branch or home delivery; I've had good luck with a few such purchases. It seems that retail is still in flux, and Amazon is still the 800lb gorilla in the ring.
posted by Artful Codger at 9:32 AM on March 3 [5 favorites]
I feel like something changed when it became easier—and not really any more expensive—to order half a dozen different kinds of an item from Amazon and send back all the ones that didn’t work, versus going to an actual store and trying them out in person (on the slim chance that was even possible).
posted by gottabefunky at 10:25 AM on March 3 [7 favorites]
posted by gottabefunky at 10:25 AM on March 3 [7 favorites]
Where I live delivery can be nightmarish because the majority of things are delivered by USPS, even when it REALLY would be better for EVERYONE to have it come UPS or FedEx.
I live in public housing for elderly & disabled. The mail carrier will not bring things to your door usually. That’s something of a pain. If you are out there you can usually get them to bring it. Amazon & USPS give a 4 hour delivery window.
posted by Katjusa Roquette at 11:47 AM on March 3 [2 favorites]
I live in public housing for elderly & disabled. The mail carrier will not bring things to your door usually. That’s something of a pain. If you are out there you can usually get them to bring it. Amazon & USPS give a 4 hour delivery window.
posted by Katjusa Roquette at 11:47 AM on March 3 [2 favorites]
That product had to be priced the same on the retailer website as Amazon because Amazon will take your product off their pages if you price it cheaper anywhere else.
I'm not sure if this is true. I don't doubt it at all that it is because that's totally on brand or Amazon and Walmart, and others.
But my experience doesn't match this as a fact. Like all of these things it probably depends on the company and product, and I don't think there is a direct linear relationship of popularity or brand name, niche vs. commodity, etc - and what a company can get away with via lower prices with direct sales.
I rarely shop on Amazon at all, as in maybe once or twice a year. And for me it's almost always some kind of niche technical item like a specific bike part, a bit of camping gear, a computer part or a small but actually needed but enthusiast-grade flashlight.
I do often price check things on Amazon or use it as a model or database
But in that realm (especially in bike parts, flashlights and some computer parts) almost every time it's cheaper to go direct to the manufacturer's or an independent dealer, and you're also much less likely to get fakes or SKU and bin assortment mix ups.
Just last night I just bought a copy of my favorite and very affordable pocket flashlight because I thought I lost it for a few days, and I've been meaning to get a second one as a back up and some extra batteries and stuff.
The flashlight was $30 on amazon, and wasn't enough to clear the free but slow shipping option.
On the manufacturer's site it's $20, the same batteries are roughly half price, and they even have a package deal on some accessories like a magnetic tail clip and a diffuser for barely $3 more, and free shipping for anything over $30. And then they threw in a 15% off coupon on top of that so my whole order came out to about $30 and change including free shipping.
And this is not a small brand. It's well known online and on Amazon, they have a full store front.
Sure, shipping is going to be way slower on this one. I'm probably not going to see it for 10 days at a minimum, and might even be closer to 20-30 days according to online reports. It may be coming directly from China, but if I'm lucky it may come from their own US warehouse
But the shipping isn't always slower especially if ordering from a domestic dealer and business. I got some ebike parts for Christmas and ended up buying them from a dealer in my state. Not only were the prices cheaper, but they had parts that Amazon doesn't even have and had them confirmed in stock, and I was even able to ask questions from the owner and limited staff via plain old SMS and get very timely replies.
And the shipping was INSANELY fast. It was boxed and tagged for pickup and I had a tracking number in under 15-30 minutes or so and it was on my door the next evening. I think it was actually less than 24 hours from hitting the completion button on the online site to opening the box.
And every time I order anything from Amazon I always end up spending more than I really want to spend just to hit the free shipping option, and often would end up buying some stupid, cheap thing I didn't even really want to buy in the first place, like adding in some cheap rechargeable AA batteries. So a similar order would end up being more like $50 to even $60+.
But I also can't help but note that Amazon's free shipping for my last few orders can easily be as slow as 10+ days and a total crapshoot, too. Pretty much every single time I've ordered something on Amazon and used free shipping it went on an adventure and walk about and was at least multiple days past the projection.
posted by loquacious at 12:57 PM on March 3 [2 favorites]
I'm not sure if this is true. I don't doubt it at all that it is because that's totally on brand or Amazon and Walmart, and others.
But my experience doesn't match this as a fact. Like all of these things it probably depends on the company and product, and I don't think there is a direct linear relationship of popularity or brand name, niche vs. commodity, etc - and what a company can get away with via lower prices with direct sales.
I rarely shop on Amazon at all, as in maybe once or twice a year. And for me it's almost always some kind of niche technical item like a specific bike part, a bit of camping gear, a computer part or a small but actually needed but enthusiast-grade flashlight.
I do often price check things on Amazon or use it as a model or database
But in that realm (especially in bike parts, flashlights and some computer parts) almost every time it's cheaper to go direct to the manufacturer's or an independent dealer, and you're also much less likely to get fakes or SKU and bin assortment mix ups.
Just last night I just bought a copy of my favorite and very affordable pocket flashlight because I thought I lost it for a few days, and I've been meaning to get a second one as a back up and some extra batteries and stuff.
The flashlight was $30 on amazon, and wasn't enough to clear the free but slow shipping option.
On the manufacturer's site it's $20, the same batteries are roughly half price, and they even have a package deal on some accessories like a magnetic tail clip and a diffuser for barely $3 more, and free shipping for anything over $30. And then they threw in a 15% off coupon on top of that so my whole order came out to about $30 and change including free shipping.
And this is not a small brand. It's well known online and on Amazon, they have a full store front.
Sure, shipping is going to be way slower on this one. I'm probably not going to see it for 10 days at a minimum, and might even be closer to 20-30 days according to online reports. It may be coming directly from China, but if I'm lucky it may come from their own US warehouse
But the shipping isn't always slower especially if ordering from a domestic dealer and business. I got some ebike parts for Christmas and ended up buying them from a dealer in my state. Not only were the prices cheaper, but they had parts that Amazon doesn't even have and had them confirmed in stock, and I was even able to ask questions from the owner and limited staff via plain old SMS and get very timely replies.
And the shipping was INSANELY fast. It was boxed and tagged for pickup and I had a tracking number in under 15-30 minutes or so and it was on my door the next evening. I think it was actually less than 24 hours from hitting the completion button on the online site to opening the box.
And every time I order anything from Amazon I always end up spending more than I really want to spend just to hit the free shipping option, and often would end up buying some stupid, cheap thing I didn't even really want to buy in the first place, like adding in some cheap rechargeable AA batteries. So a similar order would end up being more like $50 to even $60+.
But I also can't help but note that Amazon's free shipping for my last few orders can easily be as slow as 10+ days and a total crapshoot, too. Pretty much every single time I've ordered something on Amazon and used free shipping it went on an adventure and walk about and was at least multiple days past the projection.
posted by loquacious at 12:57 PM on March 3 [2 favorites]
Oh, and I'm not defending Amazon at all with that last comment or disagreeing with the article. Fuck Amazon.
I'm trying to encourage support of competing businesses and direct sales and confirm that there's still some choices left.
posted by loquacious at 1:03 PM on March 3 [2 favorites]
I'm trying to encourage support of competing businesses and direct sales and confirm that there's still some choices left.
posted by loquacious at 1:03 PM on March 3 [2 favorites]
I think that where Amazon currently wins with most shoppers is that they are just so damn EASY.
Counterpoint: it’s fucking impossible to find any specific thing on Amazon anymore unless you do weird search hacks, similar to how to get out of SEO AI spam article hell you have to append any Google search with “reddit”.
Amazon was easy 15 years ago. Now? It’s a bloated monstrosity that lives on through market capture and habit.
posted by rhymedirective at 3:49 PM on March 3 [8 favorites]
Counterpoint: it’s fucking impossible to find any specific thing on Amazon anymore unless you do weird search hacks, similar to how to get out of SEO AI spam article hell you have to append any Google search with “reddit”.
Amazon was easy 15 years ago. Now? It’s a bloated monstrosity that lives on through market capture and habit.
posted by rhymedirective at 3:49 PM on March 3 [8 favorites]
Anybody calling these stuff “junk fees” is welcome to spin up their own store and immediately find out the logistics of an e-commerce business cost real money.
I don’t sell on Amazon for brand safety reasons, but: I can warehouse my product onsite, I have an employee coming in tomorrow morning to pack the 30 orders that came in since she she last came in Saturday afternoon, I can take those orders to USPS, I can handle any customer support issues that came up over the weekend, I can take the raw materials that came in from my Chinese supplier last Friday and turn them into the new 15 SKUs (put in jars/shrinkrap/barcode/take pictures/etc) on my online store.
Orrrrr, I can make less profit by doing almost none of that by going down the “FBA route. Beside packaging my products and taking product pictures, all of that could just be handled by Amazon, Walmart, etc.
posted by Back At It Again At Krispy Kreme at 9:23 PM on March 3 [1 favorite]
I don’t sell on Amazon for brand safety reasons, but: I can warehouse my product onsite, I have an employee coming in tomorrow morning to pack the 30 orders that came in since she she last came in Saturday afternoon, I can take those orders to USPS, I can handle any customer support issues that came up over the weekend, I can take the raw materials that came in from my Chinese supplier last Friday and turn them into the new 15 SKUs (put in jars/shrinkrap/barcode/take pictures/etc) on my online store.
Orrrrr, I can make less profit by doing almost none of that by going down the “FBA route. Beside packaging my products and taking product pictures, all of that could just be handled by Amazon, Walmart, etc.
posted by Back At It Again At Krispy Kreme at 9:23 PM on March 3 [1 favorite]
This is a detailed example of "enshittification" as originally defined (not just "things getting shitter" but the specific cycle of user-base capture followed by 3rd-party business capture followed by screwing both ends over to benefit you as the middleman, and should be read as such.
In particular the crippling of product search to make sure you never get no results, that right there is pure enshittification. Amazon is now doing everything possible to never tell you "we have nothing to sell you" and the consequence is that you can no longer find what you actually want, much of the time.
posted by Aardvark Cheeselog at 8:22 AM on March 4 [4 favorites]
In particular the crippling of product search to make sure you never get no results, that right there is pure enshittification. Amazon is now doing everything possible to never tell you "we have nothing to sell you" and the consequence is that you can no longer find what you actually want, much of the time.
posted by Aardvark Cheeselog at 8:22 AM on March 4 [4 favorites]
I bought a fancy $270 pillow for side-sleepers last night, which I found on Amazon and then checked the retailers' site to see if it was cheaper, and it was the same price but they had a $50 off coupon for first-time buyers (which is presumably almost everybody). My searches for side-sleeping pillows didn't come up with this specific item (which should really have been the first result) but Amazon suggested other search options (I don't remember them doing this before!) and one of those brought it up.
posted by joannemerriam at 10:13 AM on March 4 [1 favorite]
posted by joannemerriam at 10:13 AM on March 4 [1 favorite]
« Older Would you sacrifice the possibility of a better... | We know what the problems are, so what about the... Newer »
This thread has been archived and is closed to new comments
The company's profits - they insist - come from selling AWS cloud service. The retail operation is just a public service they provide to us with cross-subsidy from those fat AWS margins.
This is a hell of a claim. Last year, Amazon raked in $130 billion in seller fees. In other words: they booked more revenue from junk fees than Bank of America made through its whole operation. Amazon's junk fees add up to more than all of Meta's revenues.
posted by Umami Dearest at 6:16 AM on March 3 [7 favorites]