
Amazon, the Brand Buster - marban
https://www.nytimes.com/2018/06/23/business/amazon-the-brand-buster.html
======
mmt
Notably absent in the anti-trust speculation is how the AmazonBasics brand
does or doesn't get treated differently from other brands with respect to
counterfeits (and other undesirable non-Amazon seller behavior, such as used
items as new).

AFAIK, Amazon prohibits third-party merchants from selling AmazonBasics, which
would mean that the inventory-mingling problem, which has been discussed on
other threads, wouldn't exist.

That seems like pretty clear consumer harm.

~~~
jasongill
Commingled inventory is an option for FBA sellers. You can disable it easily
from your FBA account; I think at this point the "problem" is only for
beginning sellers who aren't aware that it's on by default

~~~
mmt
As sibling comments pointed out, the main problem is for the
manufacturer/brand and for the buyer.

An unscrupulous seller (of, for example, couterfeits) would benefit
significantly and so would not disable the option.

That Amazon themselves don't disable this option (for "shipped and sold by
Amazon.com"), except, effectively, for their own brand, is the suspect anti-
competitive practice.

~~~
something2
Amazon also has something called Brand Registry. Essentially, if you can prove
you own a brand, you can prevent other sellers from selling the same item.
That's how most larger brands protect their listings.

~~~
yjftsjthsd-h
If that works, then why hasn't Apple done it and ended the scrounge of fake
chargers?

EDIT: Or Anker for that matter. Anker is a better example because their main
business is chargers/batteries, so the should care a lot about branding and
making sure there are no fake chargers under their name.

------
dmoy
I don't get this argument. I just went to CVS and bought their white labeled
lotion and some band aids, that were nearly identical in ingredients to the
branded stuff sitting right next to it on the shelf.

My soap at home is similarly target's in house stuff. Half the things I buy
from Costco are Kirkland.

Why do I do it? Because it's like half the price. Just like buying say
AmazonBasics batteries vs Energizer.

~~~
subpixel
The argument isn't that Amazon is making things hard on consumers. It's that
they are killing brands on a battlefield they control absolutely.

Think of it from the brand perspective. CVS pays you to stock their product on
their shelves, so while they compete with you, they also send you money every
month regardless.

On the other hand, you have to pay Amazon to include your products in their
catalog. So while they compete with you, you pay them for the privilege. And
everything you do to innovate, they steal.

~~~
hakfoo
I find, across the board, Amazon often feels like their incentives don't align
with those of a customer.

They're always trying to push Prime (and to a lesser extent their video and
music service) which represents extra clicks to sale. It's a significant auto-
renewing commitment, not a $5 casual impulse add-on-- repeatedly dangling it
in front of me and hoping I misclick into it borders on a dark pattern. I'd
love to see a big one-click "I am not interested do not bother me further"
button.

Everything about their checkout funnel is contrary to modern best practices.
Fields are oddly arranged compared with most other ecommerce sites, and once
you reach a certain point, the normal navigation disappears. I guess this is
designed to trap the user with no way out but purchase, but it makes it harder
to compare items, especially when you're trying to find out on shipping (see
below).

Shipping is a mess to deal with. "You need to spend $25 for free shipping, but
these items don't count". "These items can ONLY be purchased with an order of
other items that hit the free-shipping threshold." "These items can only be
purchased with Prime." There's no easy "estimate shipping" button without
going several pages into checkout. These sort of complexities probably are
engineered to steer customers towards buying the items fulfilled by them to
avoid the pitfalls.

I'd also wonder if their brands "accidentally" do well because of how bad
their product categorization is. Nobody else is selling AmazonBasics products,
so the single listing gets all the ratings and sales volume. Meanwhile, the
name brand has 30 slightly different poorly arranged listings all overlapped.

~~~
autokad
I'm an absolute luddite when it comes to shopping online, but I found Amazon
to be one of the easiest. i throw lots of stuff in my cart, and then pull
things away at the end based off shipping cost/time. I have had shopping carts
open for years. I also like the wish list and buy again options.

When I order an air purifier, amazon reminds me I might need to buy extra
filters, stuff like that. many times i have ordered stuff from websites, and
key components that make what i ordered useful were not part of the order.

------
andyidsinga
the referenced article from Yale Law Journal is very interesting - and discuss
amazon in context of anti-trust laws, what is wrong with those laws and some
solutions.

snip snip ( [https://www.yalelawjournal.org/note/amazons-antitrust-
parado...](https://www.yalelawjournal.org/note/amazons-antitrust-paradox) )

"in some ways, the story of Amazon’s sustained and growing dominance is also
the story of changes in our antitrust laws. Due to a change in legal thinking
and practice in the 1970s and 1980s, antitrust law now assesses competition
largely with an eye to the short-term interests of consumers, not producers or
the health of the market as a whole; antitrust doctrine views low consumer
prices, alone, to be evidence of sound competition. By this measure, Amazon
has excelled; it has evaded government scrutiny in part through fervently
devoting its business strategy and rhetoric to reducing prices for consumers.
Amazon’s closest encounter with antitrust authorities was when the Justice
Department sued other companies for teaming up against Amazon.23 It is as if
Bezos charted the company’s growth by first drawing a map of antitrust laws,
and then devising routes to smoothly bypass them. With its missionary zeal for
consumers, Amazon has marched toward monopoly by singing the tune of
contemporary antitrust."

~~~
HarryHirsch
_It is as if Bezos charted the company’s growth by first drawing a map of
antitrust laws, and then devising routes to smoothly bypass them_

What if that statement was correct? Bezos comes from D.E. Shaw, and it's known
that the old sphinx takes the long view.

~~~
andyidsinga
That's quote is certainly alluring - My initial reaction was similar.

On further thought, based on my experience working with general
managers/executives, I suspect they were following their noses more than
making any elaborate plans.

A big advantage they had (and continue to have), was being embedded in a data
rich software/online context AND the organizational drive to use it to their
advantage.

------
DanCarvajal
As someone who almost always buys generic brand from wherever I shop I'm
pretty aloof to these complaints. Target, Walmart, and Costco all have in
house brands.

The Amazon brand "Goodthreads" Oxfords I wear to the office are very
impressively well made for the price. Compared to the Target "Goodfellow & Co"
ones at the same price there's a higher level of quality and finish. They're
better than the Banana Republic ones I had at half the cost.

~~~
tomjen3
I always do that with toilet paper, soap, etc. If Amazon kills brands, that is
a great thing.

If you need to wear expensive clothing to show how rich you are, donate 10k to
the top ranked give well charity, buy a five dollar t-shirt and I will sew
your reciept on it. Much more efficent than throwing more money on Raulph
Lauren.

~~~
snom380
I wear expensive clothing (without any visible branding) because I'm paying a
company that pays fair wages to their workers and are working on reducing
environmental footprint. Now that company isn't on Amazon, and I don't have a
problem with Amazon selling their own brands, but if they end up making it
more difficult for smaller companies to thrive, I consider it a negative.

------
partycoder
Amazon has full visibility over what is sold on their platform and can sell
directly that directly without extensive market research.

Same with ads. They know what the search terms are and how to exactly target
those ads.

------
pietroglyph
I think this illustrates the unfair advantage pretty well:
[https://www.amazon.com/s/&field-
keywords=batteries](https://www.amazon.com/s/&field-keywords=batteries)

~~~
graton
On a somewhat related note:

[https://www.wsj.com/articles/demand-for-batteries-is-
shrinki...](https://www.wsj.com/articles/demand-for-batteries-is-shrinking-
yet-prices-keep-on-going-and-goingup-1523871000)

I was able to read it via a google search:
[https://www.google.com/search?q=duracell+energizer+high+pric...](https://www.google.com/search?q=duracell+energizer+high+prices)

From the article:

Shoppers are paying more for disposable batteries even though the
proliferation of toys and consumer electronics powered by built-in
rechargeable batteries has reduced U.S. demand.

That is because the two biggest disposable-battery brands, Duracell and
Energizer, control over three-quarters of the market. As both focus on
profits, they are no longer offering deep discounts as they did when they were
racing for market share.

Batteries on average cost 8.2% more than a year ago, while prices in the
overall household-care segment rose only 1.8%, according to Nielsen. At a time
when prices are stagnating on everything from toilet paper to diapers, such
pricing power for a product that is increasingly obsolete has confounded
shoppers.

~~~
ajross
That's my intuition too. I mean, there is obviously the potential for a
retailer like amazon to disrupt existing markets in an unfair way. But _this_
market was _really_ in need of some disruption. Are Amazon Basics batteries so
successful because Amazon is leveraging its retail dominance or because the
existing choices are overpriced?

------
Zak
I'm a little surprised so many people still buy large numbers of alkaline
batteries. NiMH rechargeables are readily available, have a fairly low cost to
get started with a battery/charger bundle, save a significant amount of money
over time and have vastly better performance in higher-drain devices like
cameras and flashlights.

~~~
ams6110
I've tried using rechargeables a few times and it never works out over the
long-term. They get thrown away by people who don't realize they are
rechargeable, you end up with one less than you need, you forget to charge
them, it's just a pain compared to having a supply of disposable batteries
that have a good shelf life and are always ready to use

~~~
snom380
I used to have the same opinion, but modern NiMH batteries have far longer
shelf live than they used to, and the price is low enough that you can afford
to keep some spares in an 8 battery charger ready to use. I do have a set of
alkaline batteries, but I haven't used them in 3 years.

------
nicodjimenez
I think this article is a little misguided. Sure, commodity products such as
Duracell or cheap clothing companies might be in trouble, but such companies
were weak brands in the first place. Their main appeal was low cost, good
enough, and Amazon is just doing the whole low cost, good enough thing better
than anyone. But high end brands like Apple, Nike, Louis Vuitton, Gucci, are
not going anywhere, that's for sure!

~~~
alfredallan1
Not immediately, no. 10 years back, Duracell seemed a very strong brand. All
it is going to take for LVMH, etc. to start getting replaced is a new
generation of online shoppers seeing Amazon house brands right next to these
and subconsciously associating them together as brands of equal value.

~~~
nicodjimenez
Not going to happen. High end conspicuous consumption products are well
protected against Amazon. You can be a low end brand or a high end brand but
you cannot be both.

------
abandonliberty
Amazon picks successful high margin items and knocks them off.

[https://www.seattletimes.com/business/amazonbasics-house-
bra...](https://www.seattletimes.com/business/amazonbasics-house-brand-
flatters-competitors-but-theyre-not-fans/)

[https://www.amazon.com/Rain-Design-mStand-Laptop-
Patented/dp...](https://www.amazon.com/Rain-Design-mStand-Laptop-
Patented/dp/B000OOYECC/)

[https://www.amazon.com/AmazonBasics-DSN-01750-SL-Laptop-
Stan...](https://www.amazon.com/AmazonBasics-DSN-01750-SL-Laptop-Stand-
Silver/dp/B00WRDS0AU)

Interestingly though, the amazonbasics version doesn't hit the first page for
laptop stands while the Rain version still does.

~~~
civilitty
_> Interestingly though, the amazonbasics version doesn't hit the first page
for laptop stands while the Rain version still does._

I'm curious, does this mean that Amazon doesn't prioritize their own products
in the search algorithm? I've felt that in the past Amazon is usually ahead of
the game on legal issues - like when they started collecting state sales taxes
across the board, years before the Supreme Court ruling. Sooner or later,
we're going to see court precedent and laws regulating search algorithms for
anticompetitive behavior to supplement the more broad antitrust laws so maybe
Amazon is keeping out of it to avoid any problems later. As an Amazon shopper,
I've gotten used to the Amazon Basics icon and I'm sure that alone has
marketing advantages over the Rain product entry.

~~~
ikeboy
They absolutely favor their own brands, often having an entire line called
"our brands" with prominent placement.

------
bshepard
How much do consumers pay in Bezos tax for goods on Amazon? i.e, if the site
simply let consumers buy from Chinese manufacturers (which, in the end, is
what much of Amazon is) without the fee to the owners of the marketplace (i.e,
"Bezos Tax), how much cheaper would it be?

~~~
opencl
Identical bluetooth OBDII scanners: Aliexpress $2.98 shipped, Amazon $10.99
shipped

IME this is a fairly typical price ratio. Sometimes they are much closer
though. Of course Amazon ships it in 2 days instead of weeks. The "Bezos tax"
is largely paying for the very convenient logistics of US warehousing.

[https://www.aliexpress.com/item/ELM-327-V-2-1-BT-adapter-
Wor...](https://www.aliexpress.com/item/ELM-327-V-2-1-BT-adapter-Works-On-
Android-Torque-Elm327-Bluetooth-V2-1-Interface/32767480280.html)

[https://www.amazon.com/Mestart-Bluetooth-Diagnostic-
Scanner-...](https://www.amazon.com/Mestart-Bluetooth-Diagnostic-Scanner-
Android/dp/B01HXGX8V6/)

~~~
Stratoscope
Those are not identical items. Look at the photos: the one sold on Amazon is
much smaller.

~~~
opencl
Oh sorry, the Aliexpress listing includes quite a few variants and the one I
was referring to apparently isn't selected by default. The one on the far left
is the same as the Amazon listing.

But the point is, search for any popular product category on both sites and
you will see largely the same items, with Amazon typically somewhere from 2-5x
as expensive.

------
fru2013
Non paywalled mirror

[http://archive.is/sRijg](http://archive.is/sRijg)

------
anilshanbhag
New York Times with its typical anti-capitalist spin. Amazon Basics doesn't
sell because its Amazon or they used ‘Data That No One Else Has', it is simply
the same product at a cheaper price.

The same is true at Kirkland at Costco, Great Value at Walmart and Signature
at Safeway/Albertsons. You can buy Signature batteries at Safeway. Brands
clearly add a brand tax which is unjustified. They have larger
distribution/scale than store brands, yet they charge more. Market forces are
driving prices down and that is a good thing.

------
karmaseed
In India there's a new government rule that "no one entity can contribute more
than 25 percent to the sales of an e-commerce platform".

