
Amazon scooped up data from its own sellers to launch competing products - benryon
https://www.wsj.com/articles/amazon-scooped-up-data-from-its-own-sellers-to-launch-competing-products-11587650015
======
nateburke
About 10 years ago I met the head of IT for B&H cameras in NYC. Among many
things, he was in charge of the hosting for their online store. After he
complained about dealing with physical servers, I asked him if he had ever
considered using AWS ec2 for the website, and he replied that his boss refused
because he believed that Amazon would pull data on B&H products and use it to
compete more effectively.

I'm not sure that Amazon would be able to pierce the veil of the hypervisor
like that, but his instincts were in the correct direction.

~~~
throwaway_aws
Throwaway account for obvious reasons.

In the past, AWS has used the data from third party hosted services on AWS to
build a similar service and in fact start poaching their customers.

Source: I used to be at AWS and know the PM & his manager who built a service
this way. I was hired on that team.

~~~
throwaway_aws
As for talking to journalists, I didn't leave with any ill will and don't want
to complicate my life. I personally know a friend who got involved with
journalists... his past employer came to know about it, sued him... and he
became almost unemployable in the valley.

Edit: fixed a typo

~~~
movedx
> ... his past employer came to know about it, sued him... and he became
> almost unemployable in the valley.

You might have a family to protect. A home to maintain, etc. I understand.
It's scary. But the world doesn't and cannot change for the better if we let
corporations bully us into silence. The world will and does change when brave
individuals, with the support of society, stand up and blow the whistle.

~~~
throwlaplace
Lol exactly what support will you be providing? Will you contribute to paying
this person's salary for the next 10 years? I wish people would quit with the
empty platitudes and the rhetoric.

~~~
movedx
Your comment reminds me of the kind seen from Russian bots. Everything about
what you said matches the algos I've seen. Very interesting.

But yes, I would be happy to contribute to a support fund to support such
individuals.

~~~
throwlaplace
lol yea right now people that call you out on your meaningless blather are
russian bots haha

>But yes, I would be happy to contribute to a support fund to support such
individuals.

cool you can start by donating to absolutely any charity in need right now.

------
theturtletalks
This is the exact reason why Shopify grew rapidly. Sellers knew they needed a
platform where they own the data and could abstract the operations outside of
Amazon seller dashboard.

People also forget that Amazon doesn't have to pay to advertise its own
products, but 3rd party sellers do. This immediately puts you at a
disadvantage if you want your product at the top since you pay seller
commission and advertising fees to Amazon. Next time you want to buy something
from Amazon, I would encourage you to find the seller's website directly or
find them on eBay. eBay charges less seller fees and is not in the business of
selling products directly.

~~~
alaskamiller
With Shopify you don't pay ~20% sales commission to Amazon per se, but you
sure as heck will end up paying for that if not more to Facebook.

Where by FB has no direct incentive, yet. It could be a FB Marketplace PM team
someone has already copied Shopify outright and is just waiting for the right
time to roll that out to all FB user worldwide.

With Amazon Marketplace the strategy has always been to convert customers off
that platform into your own.

Most top listings in most niches/categories are priced for break even
inclusive of the multitudes of keyword PPC campaigns they're running with the
hope that you leave a review and that you actually pay attention to the little
postcard that comes inside the package asking you to register your email
address.

Both games suck tbh.

~~~
Guest42
Does amazon allow seller sites to have lower prices?

~~~
coryrc
Just sell a "variant"

------
CodeCube
So many comments about, "doesn't everyone know they do this?", and "everyone
does this!"

I say there should be an explicit difference between "running a platform", and
"selling on a platform", and never should the two meet. By "platform" here,
and in the context of selling stuff online or IRL, I mainly mean that the
store should never compete with their suppliers ... it's madness and
unethical. If everyone can get a piece of the pie, it makes for a healthier
ecosystem. We should _want_ the rising tide to lift more than one boat.

And yes, I believe this should be regulated at the policy level.

This of course has implications for other forms of "platforms", such as
operating systems, APIs, and clouds; but I'll leave those discussions for
another time ;)

~~~
entee
The major question I don’t have a good answer to is, “Why is this different
than brick and mortar store brands like Safeway signature?”

Surely a part of is is placement, but Safeway could put own brand ketchup at
the same level (and I think sometimes does) as Heinz and still wouldn’t sell
the same volume.

Amazon is clearly getting a big advantage here, I’m just curious about what
the underlying dynamics are that allow them to be so much more successful in
their context than it seems store brands are in other contexts.

~~~
snowwrestler
The difference is that Safeway does not have any other _sellers_ on their
shelves. Safeway buys inventory at wholesale and sells it at retail.
Everything that is sold in Safeway was intentionally selected by Safeway to be
there.

If you see a product on a Safeway shelf, the company that makes that product
already got paid--by Safeway. If Safeway puts a generic ibuprofen bottle next
to a bottle of Advil, that's fine with Advil because Advil already got paid!
Safeway is assuming the risk that those bottles of Advil might not sell
because everyone buys the generic.

Amazon is different--they sell things themselves, but they also offer to run a
logistics platform for other folks selling things. Folks who use this platform
_believe_ (are led to believe) that they are going to direct to consumers, NOT
selling wholesale to Amazon. Amazon purports to be a neutral infrastructure
provider, like UPS or Verizon.

Now, you can say that these folks are naive for believing Amazon about their
neutrality, but it is what Amazon said! Many of these companies would never
have used Amazon for logistics in the first place if Amazon had said "we are
going to use all your data to copy your products and go direct-to-consumer
ourselves with our copies, including placing them above yours in search
results." Who would take that deal?

~~~
granzymes
I don't see as big of a distinction between Safeway and Amazon. The demand for
pain medication is relatively constant, so if sales of Safeway's generic
ibuprofen increase it will come at the expense of Advil because Safeway will
start buying fewer units. The harm is one step removed but is still there.

I think a better argument would be the scale of the data collected by Amazon
vs physical stores. But on the other hand, Safeway has an online store where
they can collect the same information and if they are anything like Walmart
then they also already have startlingly detailed insight into the supply
chains and logistics of their suppliers that surely rivals what Amazon sees if
you use their warehousing service.

I don't think it makes sense to draw a clear distinction between Amazon
generics and Safeway/Walmart generics. It seems like a fuzzy line at best.

~~~
ooobit2
Maybe. One distinction I want to argue is placement: Amazon always places the
Amazon Choice options at the top of the search and product listings. They also
always include them in the "Popular, Editor's Picks, Highest Rated, etc." box
that appears in the middle of most pages on the site. This would be like you
walking into Safeway for a bag of sugar, and as soon as you turn down the
aisle, there's an employee telling you everyone buys the Safeway brand Sugar
or an advertisement with three boxes showing Safeway's as the Most Popular
option, and two others next to it.

Where this gets real distinct is in delivery: Amazon is currently purging its
warehouses of stock from thousands of vendors so it can keep stock of Amazon-
brand and big box brand alternatives to those same products. (See:
[https://www.bloomberg.com/news/articles/2019-05-28/amazon-
is...](https://www.bloomberg.com/news/articles/2019-05-28/amazon-is-poised-to-
unleash-long-feared-purge-of-small-suppliers)) So, the Safeway equivalent of
this would be you going down the sugar aisle and finding exactly 1 or 2 bags
of competing brands with a note that says, "Hurry! Almost out!", and each bag
has 10lb. anchor attached to it. But there's 100 bags of Safeway sugar, and
there's a line of employees offering to carry it through the store for you do
you don't hurt your terribly sore shoulders...

How would you feel if a Safeway associate slapped a tracking device on you
when you walked in the door, and then didn't tell you they were recording
everything you thought while you were working your way through the store?
That's how Amazon.com works. Oh, and if Safeway could just look at your other
recent thoughts and know you fapped about 20 minutes before you walked in the
door? That's also Amazon.

~~~
sharmi
Another issue. At Safeway, Heinz ketchup is the real deal. No duplicates.

Amazon, on the other hand, has allowed duplicates, cheap reproductions and
false reviews to proliferate. Now the only way you are assured a product is
what it says is if it is an amazon brand.

------
sacks2k
I saw this happening a decade ago, but I had no real proof.

I had a profitable Amazon store in 2010. I found niche products that Amazon
didn't sell. As soon as I started getting traction on any one product, Amazon
would start undercutting me, and my sales would drop to almost zero over the
course of a couple of weeks.

I had near 100% feedback and I had a single customer complaint that I sold
them the wrong product. Within a few minutes of me receiving this claim, my
account was suspended. I had no chance to rectify the situation.

No amount of calling or emailing Amazon could get me in front of someone that
could help me. All responses were an automated rejection.

This was a rough time for me as it was my only form of income and Amazon held
almost $30,000 of my money for 3 months. I ended up having to close my
business and move on, though I did eventually get all of my money back.

I've built multiple successful businesses since then and Amazon has recently
had many business reps try to get me to sign up with a business account,
because we purchase lots of items on Amazon/month. I always try to get them to
re-investigate my old seller account and our email correspondence stops
shortly after this. It's crazy to me that after 10 years and in a completely
different industry, I still can't open a seller account.

It taught me a valuable lesson not to build my entire business on someone
else's platform.

It only gives them more control over you and they will most likely use your
customers, data, and more resources to out-compete you, if you get too big.
Twitter has also done this to their app developers.

My wife runs a small business on Etsy and it's just as bad. They make random
code changes, which bumps listings up or down and you suddenly have no orders
for weeks at a time.

What's even scarier is if a handful of companies run everything we use online.
Will I suddenly not be able to get a home loan for a decade because of an
account closure?

~~~
econcon
Same happens to us but we split sales to Shopify. Any idea if Shopify does
same? It seems their ambitions keeps growing, they started charging percentage
of revenue instead of flat subscription.

~~~
TimSchumann
I've had this thought as well, and certainly there seems to be nothing
preventing them from going down that road. Though at least with Shopify, it's
theoretically easier to move your website to another platform/service or just
roll your own.

I'd say that you're basically at their mercy with regards to the charging a
percentage of revenue though. I mean, that's how all card processors work.

By default I trust Shopify more than Amazon, and in both instances your
business is essentially succeeding 'at their pleasure' so to speak. So I
thought on it for a minute.

I think the main difference comes down to individuals in the business and
culture. I'd elaborate more but I'm not sure I want to write that much
speculative crap on the internet this morning, and I should get something
productive done with my day.

EDIT: Also just realized, that if you look at my spending habits, they 100%
imply I trust Amazon more than Shopify.

------
MichaelApproved
The solution isn't hoping the free market would solve this with a competing
platform. The solution is to create regulations & laws that prevent this
behavior.

You're either a platform/retailer or you're a manufacturer. You don't get to
be both because we see the perverse incentive that happens when it's allowed.

~~~
chairmanwow1
What really is the issue? That Amazon is leveraging its success to be
successful? It's unfair that Amazon is able to see that a product category is
doing well so it invests its own money into manufacturing a product to sell
through its site?

Do you really think that if Amazon couldn't use the data from its own site
that it wouldn't procure it elsewhere? Before any product is developed there
is extensive market research done to get an idea of how much money this
product could make.

Anyone can and does do this, why should Amazon be punished that its data
collection mechanism is cheaper than others?

~~~
munificent
Vertical monopolies are anti-competitive. It works like this:

1\. Amazon clones independent manufacturer's product.

2\. Amazon strangles manufacturer because they can promote their own product
more and have lower overhead because they control the entire chain.

3\. Competitor dies.

4\. Amazon has no competition on this product.

5\. They raise prices and/or lower quality.

6\. Consumers pay more for a shittier product.

~~~
toohotatopic
You forget the other big competitors.

Sun pushed OpenOffice to cut MS's profits from Office

Google and MS are pushing into the Cloud to reduce Amazon's influence

Amazon is creating its own ad network and offering Twitch to reign in Google

Walmart is slowly creating its own global online shopping platform to compete
with Amazon

Should Amazon ever have no competitor, monopoly regulations would kick in. But
usually, all the other big players will make sure that Amazon has enough
competition to not be invincible. It's not fun for small players, but they
obviously don't care enough to organize and take their products off Amazon.

Btw, Amazon does not necessarily have less overhead due to Price's law: [1]

>The square root of the number of people in a domain do 50% of the work.

Should Amazon expand into every business, they would be so huge that all their
efficiencies and more would be eaten up by the overhead.

[1][https://brainlid.org/general/2017/11/28/price-
law.html](https://brainlid.org/general/2017/11/28/price-law.html)

~~~
MiroF
Price's law is of questionable empirical validity, it's more like a useful
guideline/urban legend. On the other hand, there is substantial economic
research demonstrating the harms of monopolies, including vertical ones.

I'm a bit confused. Are you claiming that because of Price's law, Amazon
doesn't actually benefit from it's monopoly position?

~~~
toohotatopic
Almost. I think that Amazon cannot hold a monopoly position in all markets
because its size would be so big that a smaller competitor could compete.

As a consequence, there will be an optimal size where Amazon is serving many
markets, most likely the most profitable ones, thus massively benefiting [ *
], but they leave every other market open.

Depending on the future, this is not necessarily a bad position because low
interest rates could seed plenty of startups which means that competitors
could operate below break even points.

The question is: will Amazon ever reach that position or will its competitors
make sure that all its profitable markets will dry up and its growth will be
limited?

[*] Actually, not Amazon is profiting because the value of that dominant
position would be priced into Amazon shares in advance. Amazon would just
execute its dominant position that its investors had foreseen.

------
whoisjuan
Stating the obvious I guess. All retailers do this and create their own white-
label brands to squeeze profit from well-performing categories. Target, for
instance, is very upfront about it and they have like a gazillion white-label
brands that compete in hundreds of categories, which makes it very gray for
the customer.

Does anyone really think that any retailer launches a competing product in a
category without looking at all their supplier data?

If you want distribution you risk this. The only way to avoid it, it's to do
direct to consumer or having a product that is extremely hard to copy.

~~~
thoraway1010
This is totally false - the number of retailers who have testified before
congress that they don't use seller data to compete against sellers - and then
who go ahead and do just that is basically zero.

Additionally, most other retailers actually BUY the third parties products and
take the risk of promoting and selling it. On Amazon third parties take the
inventory and many other risks and may have to pay amazon to promote their
product.

The story here is that amazon has testified it does not do something, has
supposedly the "highest ethical principals" \- yet goes ahead and does exactly
that which it said it doesn't do.

Do that not matter to you from a trust / credibility perspective?

~~~
dd36
How would Amazon not use sales data of comparable products to evaluate the
launch of a new white label product?

~~~
archgoon
Amazon agrees that what is being reported goes against their policies.

'"However, we strictly prohibit our employees from using nonpublic, seller-
specific data to determine which private label products to launch." Amazon
said employees using such data to inform private-label decisions in the way
the Journal described would violate its policies, and that the company has
launched an internal investigation.'

~~~
sokoloff
That carefully phrased language could be technically accurate but still allow
them to use seller-agnostic information about the market for batteries or
speaker wire to decide to launch Amazon Basics batteries or speaker wire.

(Which by the way, I’m totally fine with, because there’s no reasonable way to
prove you’re not doing it and any brick-and-mortar retailer is almost surely
doing it as well.)

~~~
t0mas88
It's also ethically fair game to base your decisions to launch a product on
the amount of consumer interest the category gets. Everyone does that.

What they promise not to do is take a look at seller specific data. That makes
sense because it won't get them much extra compared to looking at categories,
and the sellers ethically claim it's their data.

~~~
thoraway1010
Actually - as the article described, they DO spend a lot of time looking at
SPECIFIC seller data for unique products because it gives them LOTS extra that
category details don't provide.

~~~
dang
Could you please stop using allcaps like this? This is in the site guidelines:
_Please don 't use uppercase for emphasis. If you want to emphasize a word or
phrase, put asterisks around it and it will get italicized._
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html).

------
Operyl
I thought this was common knowledge. Don’t the chains like Walmart do the
exact same things?

~~~
sct202
It's a little bit different because Amazon claims to be a marketplace at the
same time as curating its own specific product offering. It would be kind of
like if a mall required all transactions from independent stores in the mall
to go thru the malls servers and then the mall started its own product lines
to sell based on that data.

~~~
ThrowawayR2
Walmart has had their own marketplace for a while. For example, I can order a
HP DL360 Gen10 from a third-party seller on Walmart's site right now.

------
Tiktaalik
The key difference between what Amazon does and Costco/Walmart etc does, is
that regular retail takes the risk of buying the product to resell, prior to
gathering data and considering whether to clone it.

Amazon is able to snoop on all the sales data without any risk.

~~~
acwan93
We sell an ERP catered to distributors and many do sell on Amazon. I’ve always
wondered why on earth they would continue to sell on a platform that’s
constantly gathering their selling data, or even inventory if they’re going
FBA, and eventually try to undercut them if their products sell well.

Their response is usually “I’m making enough money now, why worry about
later?” or “our product category is too niche for Amazon to enter.” It seems
like that kind of reasoning makes sense for traditional retailers like
Costco/Walmart/Macy’s etc., but not Amazon where Amazon virtually has no risk
in listing a product.

~~~
toasterlovin
When your customers say that their product is too niche, they're probably
right in a lot of cases. The argument that Amazon can enter every niche and
cater to every consumer want is essentially saying that planned economies can
actually function. But they can't. Amazon is skimming the highest volume
product categories and that's it. They couldn't manage the complexity of
branching out into every single long tail product.

~~~
PaulDavisThe1st
Not highest volume.

Highest gross profit (volume * margin).

And how would you ever know either of these two (volume, margin) if you were
an arbitrary 3rd party?

Amazon doesn't need to branch out into every single long tail product to cause
severe disruption to a retail sector that is often predicated on low single
digit margins.

~~~
econcon
How does Amazon know margin?

Amazon know volume, Amazon goes to suppliers on alibaba and gives them the
quantity they require and then Amazon figures out what margin they'll be
making if they sell it at the same or lower price than the original seller.

~~~
PaulDavisThe1st
If you can't see volume, you can't estimate profit, and you can't
differentiate which products are worth considering as a primary seller.

Start with volume as a suggestion of which products to investigate for
purchase price with sellers. If you can get the "right" price with the
"appropriate" volume, start selling the product direct.

Also, at Amazon scale, you can estimate margin by looking at price variation
over time and throwing in some well tested assumptions.

~~~
toasterlovin
> Also, at Amazon scale, you can estimate margin by looking at price variation
> over time and throwing in some well tested assumptions.

You really can't. You have to do research and modeling to figure out margins.
There are probably half a dozen factors that determine a product's margin.

------
tcarn
Amazon makes life so hard for their suppliers it doesn't even surprise me. I
once shipped a box of 10 laptops to sell on FBA (retail value ~$10k) and UPS
showed the box as delivered, Amazon checked in the units and showed them
available for sale on the website. Then 24 hours later all of them got removed
saying I sent the inaccurate quantity in the box and none where now available
for sale. The laptops disappeared and I had to do an insurance claim with UPS.
Amazon's support was horrible and made me never want to sell with them again.
Lots of stories like mine on the Amazon subreddit.

~~~
a_wild_dandan
Subreddits tend to wildly misrepresent reality due to survivorship bias.
People generally don't post or noodle through such communities when things are
going well. That's not to say there isn't a significant supplier issue -- just
be aware of the company you keep. I often forget to be critical of the bubbles
I inhabit.

In any case, I do wonder if Amazon's treatment of folk like you would improve
considerably if Amazon had competition. It seems they can push you around
because there are no consequences to pay.

~~~
sacks2k
"Subreddits tend to wildly misrepresent reality due to survivorship bias"

I disagree. If Amazon had great customer service, there wouldn't be a large
volume of people complaining.

"In any case, I do wonder if Amazon's treatment of folk like you would improve
considerably if Amazon had competitio"

I agree with you here. The only two marketplaces that actually get traffic are
Ebay and Amazon. I've tried them all over the years and the rest combined
don't even come close.

~~~
arkades
> If Amazon had great customer service, there wouldn't be a large volume of
> people complaining.

Volume of complainers is an absolute number. Customer service can only reduce
the proportion of complainers. If you have 50 complainers on 100 customers,
bad customer service. If you have 50 complainers on 1,000,000 customers, good
customer service.

You can conclude nearly nothing based on the absolute number of complainers in
isolation.

------
viahoptop
What is the difference between this and the store brands at supermarkets?

~~~
theturtletalks
This is different that Costco selling their own brand vodka or toilet paper
because buyers can see those items side by side when shopping. Amazon has
their products on the top every time and if 3rd party sellers want to be next
to them, they have to pay for ads. Amazon doesn't pay for its own ads so they
can effectively hide their competition.

~~~
dathinab
I believe amazone should pay for their own advertisement to well themsell and
prices should be transparent (amazone has to pay them self what other would
have to pay), _because then they would still need to pay tax_ for this. At
least in countries where taxes are not very low this could make the situation
slightly better. Through not that much better tbh.

~~~
hnick
Yes this sounds like an antitrust situation to me (I know they are not
technically a monopoly but different countries have different takes on these
laws so it's worth considering why they exist).

A phone wholesaler with a retail business will be broken up since it is a
problem for their other retail customers.

This is quite similar where Amazon is acting as both the provider and a retail
customer competing against their other retail (marketplace business)
customers, with a number of advantages.

Having them forced to provide services at arm's length, at published costs,
with audited public books and no inside information would level the playing
field. They probably already account for advertising "spend" internally anyway
if they're smart, since as another poster alluded they miss out on PPC when
someone clicks on an Amazon product so need to know what it cost them.

------
so_tired
Important line from the article

> a practice at odds with the company’s stated policies...

> .. as stated to congress

~~~
SlowRobotAhead
You want to start a discussion about company stated policies and how each
person feels they do or do not live up to them? That could go on for quite
awhile!

edit: it was mostly a joke, calm down.

~~~
salawat
You're either missing the point or strawmanning, I'm not sure which.

In speaking with Congress, they're stating to everyone that they are there to
act as a platform for third parties. They're a "pass-thru" service.

That implies that while metadata may be being collected, you shouldn't be
looking at it, as it isn't "yours". It would be like a cloud provider going
into business undercutting their client's because they weren't savvy enough to
encrypt their business records. Or the post office going through your B2B
mailings, figuring out your footprint, them becoming a competitor.

You have one job. That's it. Once you start abusing your access to your
seller's transaction data to figure out where to or whether to diversify into
their vertical, there is a fundamental breach of trust, and a very reasonable
case to be made in having exploited something you shouldn't be.

That's the Hobbesian Leviathan for you; you don't need all those little
businesses anyway!

------
archgoon
So this seems to be getting drowned out a bit; but the core issue here is
_not_ that Amazon is creating their own labels to compete with seller's
products. It's that they've publicly stated, including to congress, that they
don't use non-public, seller specific data to compete with them; and now
former employees are claiming that's a lie.

Amazon agrees that, as claimed, this is a problem.

'Amazon said employees using such data to inform private-label decisions in
the way the Journal described would violate its policies, and that the company
has launched an internal investigation.'

------
sharkweek
I’m not an Amazon fan boy, but _I am_ a Costco fan boy, and they do the same
thing, so I don’t really think I can be too upset about this.

Retail is ruthless.

~~~
RyJones
I've lived in Kirkland, Washington, off and on since 1994. It's amazing how
many people all over the world know of Kirkland from Costco branding. For a
log time the reddit tag line[0] was "We're more than Costco!"

[0]: [https://old.reddit.com/r/Kirkland/](https://old.reddit.com/r/Kirkland/)

~~~
sharkweek
Same actually! Grew up in Juanita from ‘89-‘03 then went to UW and have stayed
in Seattle proper mostly since.

I always thought it was funny, as a young kid, that my city’s name was on all
sorts of products, not making the connection.

~~~
RyJones
Nice. My youngest was born in Juanita at our apartment! I like the area well
enough, obviously, to start a reddit about it.

------
throwaway5752
There is going to be a coordinated attack on Amazon ahead of the US
presidential election and it will have valid information and misinformation.
The WSJ will no doubt be involved.

Question why and when old news is being dredged up. For example, is Amazon any
worse than Wal-mart or Oracle or any other number of companies out there? If
something is not contemporaneous news, then why is being being used at the
point in time you are reading it? What is the motivation of the group pushing
that information? Sometimes that is the even bigger story.

------
Cactus2018
Quick link to AmazonBasics

[https://www.amazon.com/s?rh=p_89%3AAmazonBasics](https://www.amazon.com/s?rh=p_89%3AAmazonBasics)

I am happy to buy these products over generics because of the higher quality.
Batteries, paper shredders, water filters, electronics accessories, household
supplies, office products...

~~~
matteuan
AmazonBasics is just one of Amazon's brands. Take a look here:
[https://www.businessinsider.com/amazon-owns-these-brands-
lis...](https://www.businessinsider.com/amazon-owns-these-brands-
list-2018-7?r=DE&IR=T#buttoned-down-mens-clothing-11)

~~~
Cactus2018
"Amazon owns more than 80 private-label brands" !

------
repiret
_every_ major retailer has store brands, and I fully expect they all use their
sales data to inform their generic products business, and all of their
suppliers expect that too. As a consumer, I like that Amazon is upfront about
what products come from their brand. Good luck browsing through the plumbing
and electrical fixtures at Home Depot or Lowes and figuring out what crappy
store brand stuff and whats not.

~~~
PaulDavisThe1st
(1) it's not just about generic products. Amazon uses the same approach to
decide what non-generic products it should become a direct seller of,
potentially (and normally) negatively impacting 3rd party sellers.

(2) HD and Lowes have almost no generic/store brand stuff at all. There are a
few exceptions, and they likely do represent fairly profitable sections of
their overall business. The main ones I am aware of: lighting, ceiling fans,
toilets/sinks, flooring. That leaves huge sections of these stores without
generics.

~~~
repiret
(1) You don't think HD and Lowes and Safeway and Walmart and every big
retailer doesn't use their sales data to decide which products to try to
disintermediate distributors and other middle-men in the supply chain?

(2) I'll concede HD and Lowes have a lot of departments without store brands
[1], but raise you the local grocery store, which doesn't.

[1]: The pattern I see is that the stuff marketed mostly to contractors is
less likely to be infected with crappy store brands than the stuff marked
mostly to DIY'ers. I suspect its in part because pros will learn whats quality
and whats crap a lot faster than DIYers, because the latter only buy a ceiling
fan or whatever once a decade.

~~~
PaulDavisThe1st
Amazon has done a lot more than you describe. Their marketplace has been a
major online venue for _retailers_ not just manufacturers and distributors.
Companies (typically small) that focused on small niches (e.g. triathlon
equipment). Amazon has siphoned off the best-sellers and high margin items
from these sellers, making their businesses somewhere between less profitable
and completely unviable.

The model here is not "Safeway and Walmart and every big retailer [ using
their sales data]". It's more akin to the flagship store in a mall actually
owning the mall, and requiring that all customers check out via their
registers. Every other vendor in the mall surrenders all their sales data to
the flagship, which it uses to decide how to use its own internal spaces to
sell with higher volume and/or profit.

The own-brand stuff that Amazon is doing is dubious, but sure, I agree that
many large retailers do it. Most large retailers do not operate 3rd party
retail marketplaces, however, where they can siphon sales data from largely
unsuspecting 3rd party retailers.

------
sh1ps
Up front disclaimer: this is my own personal conspiracy theory with no
objective proof. I have quite a few pieces of anecdotal evidence to support
this, but anecdotal is anecdotal.

Looking through the comments, everyone is talking about Amazon.com purchases,
but the much quieter, arguably more valuable move on Amazon's part would be to
do this via AWS. If you're running your entire system on AWS, Amazon
immediately knows what kind of scale you're currently running. Depending on
the type of product, they can pretty easily ballpark what your profit margin
is based on your pricing model and all the metrics they have on your
application (which is basically everything).

The application of this data could be used for acquisition targets, deciding
which products to build into AWS, ongoing competitive analysis when they do
build those competing products...

~~~
crazygringo
This doesn't pass the smell test for me at all.

First, Amazon has no idea whether you run your whole business on AWS or only
5% of it. Second, different businesses have such vastly different computing
requirements, which make up drastically different percentages of budgets, that
there is virtually no signal here to figure out profits.

You're going to be _far_ better off just looking at publicly available data --
funding, employees, pricing on the website -- and having a business analyst
put them together.

------
dunkelheit
Wow, lots of comments stating that it was common knowledge, but some fact
doesn't become common knowledge simply because everyone knows it. Everyone
should also know that everyone knows it and know that everyone knows that etc.
which only becomes true after the article is published. The situation is
materially different - this is illustrated e.g. by the famous 'island with a
blue eyed population' puzzle:
[https://en.wikipedia.org/wiki/Common_knowledge_(logic)](https://en.wikipedia.org/wiki/Common_knowledge_\(logic\))

In this case one of consequences could be that previously during negotiations
with Amazon suppliers couldn't effectively use the fact that Amazon would
scoop them (even if both parties knew that it was true), and now they can.

~~~
jader201
> Wow, lots of comments stating that it was common knowledge, but some fact
> doesn't become common knowledge simply because everyone knows it.

Common knowledge: something that many or most people know.

[https://www.merriam-
webster.com/dictionary/common%20knowledg...](https://www.merriam-
webster.com/dictionary/common%20knowledge)

~~~
dunkelheit
Sure, not going to quibble about word choice. The point is that many comments
are like "so what, everybody knew this", but there _is_ a material difference
between "everybody knows" and "everybody knows that everybody knows".

------
jadeddrag
Is this any different than what other stores do with their own store brands?

~~~
mywittyname
Because it amounts to IP theft.

It's one thing to see that unbleached toilet paper is selling well, and
getting a supplier to sell you a store brand version. But it's completely
different to see that a particular office stand is selling very well,
determine that it has a 20% margin, and have someone build an identical
product which you sell 5% margin.

If you look at many Amazon Basics products, they are clear ripoffs of existing
products. To the point where they are indistinguishable from the images. I was
looking for a Lodge braisier just yesterday and saw that AB produced an
identical product, down to the unique blue color Lodge uses in their enamel.

I guess you could go through the trouble of suing Amazon, assuming you had the
resources. But then you'd be booted from the platform and they'd still be
selling your knockoffs for years.

I think it's fine if Amazon sees that cast iron cookware is selling well and
decides to enter that market. What's not fine is to blatantly steal the design
of the best selling product in a category, then make your ripoff more visible
on your site. At least make an _attempt_ to differentiate the product.

~~~
ThrowawayR2
> " _It 's one thing to see that unbleached toilet paper is selling well, and
> getting a supplier to sell you a store brand version. But it's completely
> different to see that a particular office stand is selling very well,
> determine that it has a 20% margin, and have someone build an identical
> product which you sell 5% margin._"

Those two sound like the exact same thing to me. There is no real difference.

It even happens between electronics manufacturers; you'll see a company
noticing a competitor's product is successful, dissecting it to figure out the
manufacturing costs and estimated margin, and tailoring its product line to
provide a competitive product.

(Aside from all that, I though HNers didn't believe in IP?)

~~~
mywittyname
Well, you can patent or trademark designs. And our legal system protects the
holder of those patents and trademarks for good reason. Amazon is able to
leverage their position in the market to abuse suppliers and get away with
illegal behavior because the suppliers lack the resources to fight Amazon.

There's a difference between a clean room design that takes inspiration from a
product and an identical copy. I can write and perform a song in the style of
The Beatles, but I cannot write and perform "Hey Jude" without paying
royalties.

------
kregasaurusrex
Oftentimes this is done to circumvent paying patent license fees- for example
if a patented component in a BOM would cost 75 cents per unit from the
manufacturer, and the in-house team found a way to perform the equivalent
function for 15 cents then it would instantly allow your product to undercut
the competition. In Amazon's case, all it takes is a query to find high margin
items in which knockoffs can be made and self-promoted to eventually outrank
sales of the original item.

~~~
jacobr1
Another approach ... they could also identify which products either have wide-
supplier diversity for the same thing (commodities) or narrow supplier density
with many branded variants (OEM suppliers). In either case, they can go direct
to the manufacturer without ANY innovation, slap the label on, and cut out the
middle-man/sub-retailer costs. I think Amazon, in particular, has a team
analyzing these factors as input into their sourcing (on top of general
considerations like margin).

------
acwan93
Sometimes I wonder if Shopify’s long-term plan is to do something like this.

It's probably the leading direct-to-consumer platform out there right now,
it’s touted sometimes as the anti-Amazon. The leading D2C brands I’ve seen are
on there (Allbirds, Atoms, Untuckit) as well as random drop shippers. Shopify
is also expanding into a fulfillment network too:
[https://www.shopify.com/fulfillment](https://www.shopify.com/fulfillment)

~~~
toasterlovin
I think they _want_ to do something like this. The problem is that Shopify has
zero traction with consumers. Until they solve the problem of getting
consumers to search for products on their platform, they'll have no success.
That's a tall mountain to climb.

~~~
acwan93
Yeah I mean, the brands themselves have generated a lot of buzz. But the
average consumer still doesn’t know what Shopify is.

------
mensetmanusman
Based on how much Amazon will grow during this pandemic, I wouldn’t be
surprised if they are cut up by government to reduce their power to destroy
any competitor.

~~~
oehpr
has there been any antitrust activity in the united states recently? Like...
past 10 years?

Particularly given the current administrations disposition, I think pinning
your hopes to anti-trust is like financially planning around lottery tickets.

~~~
JumpCrisscross
> _has there been any antitrust activity in the united states recently?_

Yes, lots [1][2]. (I count fourteen cases year to date.)

[1] [https://www.ftc.gov/enforcement/cases-
proceedings/terms/217](https://www.ftc.gov/enforcement/cases-
proceedings/terms/217)

[2] [https://www.ftc.gov/news-events/press-
releases/terms/217](https://www.ftc.gov/news-events/press-releases/terms/217)

~~~
oehpr
I mean, no one's concerned amazon is going to merge with someone, my god I
hope the FTC would block that. But I think the grand parent comment and I are
talking about breaking up gigantic pre-existing monopolies. Not any general
activity that can be categorized under "anti-trust"

------
hn_throwaway_99
All the platforms do this. Many of the big online travel agencies
(booking.com, expedia, etc.) are some of the biggest buyers of AdWords (or at
least were before coronavirus), spending billions on Google. Last fall
Expedia's stock tanked (again, before all the coronavirus stuff) because
Google's search results started including the ability to go through directly
to booking sites without going to an OTA.

------
sharemywin
why marketplaces are able to compete with their sellers is beyond me.

~~~
dec0dedab0de
Why sellers would use a market place that is obviously going to compete with
them is beyond me.

~~~
542458
Because for any individual seller there’s a heavy short/medium term advantage
to using the marketplace in the form of dramatically increased reach and
simplified logistics.

------
olivermarks
Anti trust and anti monopoly oversight is urgently needed. Amazon is growing
like a rapidy mutating weed on coronapocalypse fallout and the centralization
is rapidly getting out of control imo.
[https://slopeofhope.com/2020/04/locking-in-amazon-
gains.html](https://slopeofhope.com/2020/04/locking-in-amazon-gains.html)

------
jwiley
I worked for a small health products reseller around 2008 that had stores on
Amazon, Yahoo (when that was a thing) and other marketplaces. It was well-
known that any exclusive distribution deals between the health products
reseller and manufacturers had a very short life: if the product was
profitable Amazon would go around the reseller, negotiate a better deal, and
sell it themselves.

Fast forward to today, and companies that are direct competitors with Amazon
(like Netflix) are completely committed to AWS. Amazon is watching, learning,
and evolving from every piece of data they can get their hands on. What better
way to learn about your business model than to watch them being tested and
deployed on their infrastructure?

I'm not specifically pro or anti Amazon...but I find it surprising the C-suite
of most organizations seems content to think of AWS as a separate business un-
related to the business that is actively trying to corner the market they are
competing in.

------
wintermutestwin
How long until the headline is: "google datamined your emails to detect and
squash disruption to its business models?"

~~~
sneak
Does this count?

[https://www.theguardian.com/us-news/2020/feb/26/gmail-
hiding...](https://www.theguardian.com/us-news/2020/feb/26/gmail-hiding-
bernie-sanders-emails-google-inbox-sorting-consequences-2020)

------
8bitsrule
Ethically, I don't see how this is much different from hiring someone at the
lowest possible wage, then using the hours and vital years of their lives to
enrich oneself. In the end, one either cares as much about the welfare of
those in one's employ, or just uses them as tools in some Pyrrhic victory.

------
yesplorer
Is there any Business to Consumer intermediary/platform that doesn't do this?

All big retailers (Walmart, Costco, etc) Apple Google Amazon.

Once you sell or distribute through a marketplace where they also sell or
offer products to the same audience, expect the best ideas to be copied by the
platform owners.

That's one of the downside retailers have to deal with.

------
ironfootnz
Like any soft vendor on the marketplace, They launch products of their own
based on the others.

It reminds me one of the post I've seen here [https://www.inc.com/sonya-
mann/aws-startups-conflict.html](https://www.inc.com/sonya-mann/aws-startups-
conflict.html)

------
neonate
[https://archive.md/7cdD3](https://archive.md/7cdD3)

------
bigbossman
This is not only obvious, it's Amazon's explicit strategy to have their own
products listed alongside 3rd party products. It's been that way ever since
they made the then-controversial decision to launch a 3rd party marketplace
business in 1999 to compete vs eBay.

~~~
PaulDavisThe1st
The competition with eBay started before 1999, and 3rd party sellers was not a
major part of the strategy nor was it really concerned with eBay (which is
1999 was literally NOTHING but an auction site).

Amazon had its own "auctions" site in the late 1990s which many people forget
even existed (it's one of the few things that Amazon tried and failed at).
Bezos knew that eBay was a problem as soon as they emerged, and worried that
Amazon would never compete effectively against them. In many senses, he was
right.

How do I know this? I worked with Bezos in the legendary "garage" in Bellevue,
WA.

------
kbos87
The fact that Amazon can argue they don’t do this with a straight face tells
me that they have no fear of regulators and feel confident they can get away
with just lying about it.

Any observant Whole Foods shopper can see this happening over the arc of weeks
and months. New products from small brands show up on the shelves at Whole
Foods. If they sell quickly, it’s only a matter of time before a Whole 365
knock off shows up in the exact same spot on the shelf with similar packaging
and a lower price. The predecessor brand is relegated to a low visibility
location nearby, and eventually disappears altogether. They don’t even try to
hide this practice, they just say they don’t do it.

------
animalCrax0rz
Given Amazon's willingness to spy on their business customers (traffic data in
this case), should I be worried to deploy code on AWS that has high IP value
in source code form (JS, Python, etc) or bytecode (Java/C#, which can be
easily decompiled). I ask this because I noticed on AWS EC2 the default
behavior is that Amazon produces the private/public key pair (as opposed to
having the user add their SSH public key) so if they wish, they can access any
code I deploy. Let's say I make a product on AWS that competes with a current
or future product of AWS itself, and let's say it gets a ton of traffic,
should I be worried? Should I be using only native binaries? (C/C++, Go, Rust,
etc) ??

------
johnnyballgame
Amazon is a cesspool of scammers now. I created a listing for a physical book.
I have yet to send a single book out to anyone and there are already two
sellers trying to sell the book on the listing I created. And one is listed as
a "collectible"!

~~~
riazrizvi
Not sure I understand. Are you saying you are the author of a new book, you
haven't sold any copies yet, you created a listing for your book and people
are offering to sell it as a collectible (presumably as an arbitrage where
they'd fulfill on your book)?

Or did you create a new listing for someone else's book, that others might
credibly own already?

~~~
johnnyballgame
Author of a brand new book no one has any copies of yet.

~~~
riazrizvi
Hmmm, why not jack up the price of yours and immediately buy one from the
scammer, just as an experiment?

------
Aissen
This type of practice right there is why there will always be a place for at
least one cloud competitor. No company that is slightly invested in retail
(directly or indirectly) want to increase Amazon's profitability by paying
AWS.

------
rkagerer
_Amazon draws a distinction between the data of an individual third-party
seller and what it calls aggregated data, which it defines as the data of
products with two or more sellers_

Oh, definitely. Two sellers is "aggregated".

------
Upvoter33
Any seller will do this, it is natural. Watch how WholeFoods for years has
replaced successful independent brands with "365" competitors. Any seller will
act this way; only regulation will prevent it.

~~~
SlowRobotAhead
Regulation would not prevent Whole Foods and “some independent company”
sharing data and producing these white label products to be sold exclusively
at Whole Foods.

This very easily defeated regulation is a perfect example why they aren’t a
silver bullet. Throwing your hands up and saying “just make government fix
everything” isn’t realistic, there is overhead and cost and bad precedent in
that.

------
erentz
This reinforces the belief I have that antitrust regulation of online
companies needs to force them to pick between being a platform or being a
store (or publisher), but they're not allowed to be both.

------
JoeAltmaier
Of course they do. Like everybody else. Who doesn't do market research?

~~~
michaelt
Some companies foster cordial relationships with their partners by staying
strictly in their lane.

For example, ARM licenses CPU core designs to chip manufacturers, but they
don't make their own chips, as doing so would turn their customers into their
competitors.

Businesses like contract manufacturers are similar - Foxconn wouldn't start
making their own smartphone.

Of course, not every company takes that approach.

~~~
aguyfromnb
> _Some companies foster cordial relationships with their partners by staying
> strictly in their lane._

That happens to be ARM's business model at the moment. It isn't guaranteed to
be their model tomorrow, nor are they doing it be friends with partners.

------
crusader76
"Amazon.com Inc. employees have used data about independent sellers on the
company’s platform to develop competing products"

Don't brick and mortar stores do this too? Not sure how popular "own brand"
products are in America but in Europe grocery stores will sell "own brand"
produce at cheaper prices. How do grocery stores choose what products to sell
under their own brand, surely this is based on how well certain products are
selling?

------
downrightmike
Didn't anyone read Brad Stone's book? This is Amazon's play. Jewelry was one
category they had trouble making work, but many other categories fell to them.
They did it with Diapers.com and really everyone they wanted to acquire. And
really the only thing keeping the regulators off of them is that it doesn't
harm the consumer because prices are kept low. That's really the only test for
antitrust cases to proceed because of a slippery slope.

------
Spooky23
I wonder if issues like this combined with the COVID crisis will impact
customer and supplier behavior?

For me, Amazon has been a shitshow for the last month. For in-stock product,
they project delivery for Memorial Day and deliver in 24 hours, or promise
prime and deliver not-so-much. Other retailers seem to be fine. Target,
NewEgg, Walmart, etc seem to be fine. Small online retail seem to be fine.

I wonder that their awful practices are biting them now... once they hit a
bump the whole system jams up.

------
zitterbewegung
From what I have gathered at various user group meetings Scraping online web
prices is pretty much done by everyone in the industry to provide for
competitive pricing. It looks like Amazon took this up a notch.

On the other hand at least for Amazon's first party products you don't have to
worry about them being counterfeit and I haven't had a bad experience with
what I have bought from them (HDMI cords).

------
sharemywin
I guess they just cut their affiliate commissions too.

~~~
mtnGoat
ebay did too. :(

i know a number of people that derive decent income from those affiliate
channels that are scrambling right about now.

------
econcon
As someone who sells on Amazon India, we made huge money on Amazon India.

Our process is rather simple.

Buy 100 units of some new promising product from Alibaba, list it on Amazon.
Work on our marketing copy.

If it sells well, optimize packaging and sales copy, increase price and order
1000 units.

Then rise and repeat.

You'll be suprized how low is the competition on Amazon India and how high is
the volume.

It seems local sellers are clueless for now.

------
mtnGoat
so did a lot of retailers. Walmart, Target, REI, every major grocery chain,
etc. have all done it. IMHO, this is just business as usual, not sure why it's
worth pointing out that Amazon did it when others have been doing the same for
years.

Direct to Consumer is the way of the future, only way to protect your brand,
sales numbers, and other proprietary infos.

------
dchyrdvh
At the same time, Amazon makes its corporate employees sign non-competes and
actually sues former employees from time to time.

------
awad
A point that I have not seen mentioned while skimming through the comments is
that the relationships between traditional retailers and their brands is one
of buyer <> wholesaler (in simple terms, I understand there are complexities
here) and that in itself is different from Amazon Marketplace (as compared to
sold by Amazon.com).

------
ChuckMcM
The obligatory, "I'm shocked I tell you, shocked!" but unlike say the
"Kirkland" brand at CostCo, this is more like UPS using the data it has on
what is being delivered to peoples houses to start stocking their trucks with
things people order often[1].

[1] Maybe the next step after food trucks is "mini-mart" trucks.

~~~
WrtCdEvrydy
Mini-mart trucks used to be a thing with ice cream trucks a while ago... they
use to sell laser pointers.

~~~
ChuckMcM
Good comparison, except in this case it would be like, "Hey we've been
delivering USB chargers to all of your neighbors, why not get one from the van
here, same quality, lower price and you get it right now? How about it?"

------
thunkshift1
This was banned by india in december. It got a lot of press about
‘uncertainty’ when that happened.

[https://www.cnbc.com/2019/02/05/amazon-how-india-
ecommerce-l...](https://www.cnbc.com/2019/02/05/amazon-how-india-ecommerce-
law-will-affect-the-retailer.html?new)

------
mlcrypto
Invent and Simplify Leaders expect and require innovation and invention from
their teams and always find ways to simplify. They are externally aware, look
for new ideas from everywhere, and are not limited by “not invented here." As
we do new things, we accept that we may be misunderstood for long periods of
time.

------
saadalem
Those were the dirtiest business tactics of Amazon Nobody can beat Amazon’s
margin. Amazon “invites” you to sell on their marketplace. You hustle. You
innovate. You test the market. You risk your time and money. Until FINALLY you
nail it! After weeks or months of hard work you finally find the right product
at the right price… SUCCESS! You start making money! Everything is amazing…

But “someone” has been watching you! The “owner” of YOUR customers has been
collecting ALL your data. Watching your progress, your growth, your
competitors, your margins, your shipping costs, etc. THANK YOU FOR
PARTICIPATING! Amazon will copy your product. Add their private label “Amazon
Basics” to it. Sell it at an unbeatable price. Attach FREE Amazon Prime
shipping to it. Position the exposure of their product on their website better
than yours. In a matter of days, you will be OUT of business! THANK YOU FOR
PARTICIPATING IN AMAZON MARKETPLACE!

~~~
Tostino
It's almost like there should probably be some oversight on one of the most
powerful entities on the planet to stop these anti-competitive practices.

~~~
missedthecue
Is it really in the spirit of anti competitive laws if the consumer wins?

This is more like one business owner (FBA seller) trying to sic the
authorities on their competition (Amazon Basics) in order to keep a
competitive advantage. This seems more anti competitive than what Amazon is
doing

~~~
Ensorceled
Yes. Anti-monopoly laws are about overall society health, not just consumer
protection. Having only a few large companies controlling large segments has
massive negative effects on suppliers, employee wages, etc. etc.

~~~
xyzzyz
You might wish that this was the case, but in the US, the anti-trust law
doesn't work this way.

The law doesn't prohibit monopoly by itself. Monopolization is only prohibited
if it restrains trade, or if the monopoly position was improperly gained. If
Amazon attains monopoly position through superior products, innovation, or
business acumen, it is very much legal in the US[1].

I think it's hard to argue that Amazon undercutting the participants in its
marketplace is restraining the trade: the complaint here is, as I understand
it, that through better knowledge of the market, and better integrated and
more efficient platform, it is able to offer same or better products at lower
prices. I can't see how it restrains the trade, according to how FTC
understands it. It would only be illegal if Amazon did sold these products
below their own costs, and then planned to recoup the losses by raising the
price after the competition is gone. I haven't seen any evidence that this is
what's going on.

[1] - [https://www.ftc.gov/tips-advice/competition-
guidance/guide-a...](https://www.ftc.gov/tips-advice/competition-
guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined)

~~~
Ensorceled
Obtaining a monopoly via legal means is irrelevant if there is then
monopolization, the examples given in this thread of "product tying" via
Amazon Prime, essential facilities denial via superseding with their own
products, and predatory pricing via not having to pay platform fees are all
restraining trade.

Whether these could be sufficiently proved is a whole other matter.

~~~
xyzzyz
> the examples given in this thread of "product tying" via Amazon Prime,
> essential facilities denial via superseding with their own products, and
> predatory pricing via not having to pay platform fees are all restraining
> trade.

If you don't trade on Amazon's platform, you're not affected by any of these.
You might as well complain about Safeway's (or whatever grocery chain operates
in your area) anti-competitive practices, because Safeway will also do product
tying via membership card, rewards and coupons, deny you facilities to put
your products on their shelves, and won't pay carrying fees for its own store
brand products.

Sure, it might be much harder for you to compete with Amazon if you can't use
its platform, but then the argument is that the Amazon is too competitive, not
anti-competitive, and that is in fact legal (and a boon for customers).

------
Ididntdothis
I am believing more and more that these big companies are really bad for the
economy and size should be discouraged. In the short run they can be very
efficient and create cheap products for consumers but this comes at the cost
of killing innovation that may come from smaller players.

------
outside1234
They are doing this with AWS as well.

~~~
DenisM
Any details you can share?

------
c3534l
I've heard about these kinds of practices anecdotally. We really need some
anti-trust action in the US. We have these laws that give the federal
government a lot of power to force companies to play fair, but we don't use
them because of politics.

------
csunbird
It is actually illegal in EU, I wonder the implications of these actions for
them.

~~~
malandrew
Learn from US businesses and launch same white label product in Europe. This
avoids running afoul of taking advantage of any data on European Amazon
sellers.

------
rhacker
Same thing happens on Etsy. You work hard, get your product out there. You are
successful. Then, 100 people copy you. And you tank. And copyright, trademark,
and patent laws all fail you miserably.

------
brentis
Years ago I said amzn should buy shopify or another vendor, host it and get
transaction revenue for those anti-amzn. Would have been huge. Similar to how
people use insta thinking its not FB.

------
DLA
Target and probably other physical retailers do the same exact thing. Bring a
product line in. See how it sells. Replace that with a white label brand they
own once data proves a winner.

------
coolswan
In long-run, I predict that sellers de-listing because of this and moving
elsewhere will have not been worth whatever money it is they will make as a
seller on their own platform.

------
WFHRenaissance
Good. Once Amazon has gobbled up all competition, we can have one reliable
place to buy every thing we'll ever need. All detractors are impeding on the
approach of utopia.

~~~
acka
Let's call those happy customers the Eloi, and call the Amazon employees (who
are by then manufacturing everything) the Morlocks. See where this is going? I
for one don't want to be living in that timeline.

------
kevinthew
This is probably illegal via antitrust law -- it's inherently anticompetitive
-- and just hasn't been tested. Another example of Amazon being an unethical
company.

------
throwaway55554
Don't grocery stores do this with own-labeled items?

~~~
ProAm
Grocery stores dont prevent you from selling your product elsewhere for
cheaper.

~~~
DenisM
Does Amazon? Any details you can share?

~~~
ProAm
Yes amazon does, its widely reported.

~~~
DenisM
Not anymore I guess?

[https://www.cnn.com/2019/03/11/tech/amazon-price-
stipulation...](https://www.cnn.com/2019/03/11/tech/amazon-price-
stipulations/index.html)

~~~
ProAm
Interesting, looks like it took the FTC starting an investigation for this to
stop.

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xibalba
This is completely unconscionable. I've reached the tipping point in my
opinion of Amazon re: antitrust. Set the dogs loose on these bastards.

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fuddle
They also get free advertising, while every merchant has to pay $1+ cost per
click on the Amazon advertising network to advertise the same product.

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DonnyV
Is anyone really shocked by this? Number 1 rule when building a business.
Never build one on someone else's platform. Never ends well.

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samstave
Not related to this particular story, but:

You are transparent. I see plans within plans.

We are coming after you.

And if you on HN, reddit etc? understand this, either join or be fearful.

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ngoel36
Is this any different than Walmart selling Great Value products, or Google
putting its Flights module first on the search results page?

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marcrosoft
Of course they did, and what’s wrong with it? Regular brick and mortar grocery
stores do the same thing. It’s called private label.

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ivan_ah
Paywall bypass [http://archive.is/7cdD3](http://archive.is/7cdD3)

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davesque
This has been happening for years. I personally remember hearing people
complain about it as far back as 2010 or 2011.

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lisamillercool
Amazon is the worst company when it comes to ethics. They don't even pay
taxes. Horrible company.

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jankyxenon
This is not that different from smartphone OS makes building functions from
popular apps into the OS

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woranl
Jeff Bezos has once said, “Your margin is my opportunity”. Well... don’t said
he didn’t warn you.

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echan00
The title of the article says it all. I mean what do you expect? This is just
business.

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perfectstorm
isn't this what Costco, Walmart are doing? I thought this is pretty common in
the retail world - i.e to cut out the middle man and price it just below the
name brand so people buy the store brand because it's cheaper.

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g8oz
Relevant to this: Lina Khan's influential analysis - "Amazon’s Antitrust
Paradox" [https://www.yalelawjournal.org/note/amazons-antitrust-
parado...](https://www.yalelawjournal.org/note/amazons-antitrust-paradox)

------
jsdwarf
And? Every supermarket chain does this... First they look for good-selling
brand products in their assortment, then they launch a very similar product
under their own house brand following the "80% of the quality for 50% of the
price" principle

------
yalogin
This is not something unique to Amazon. Everyone does it. Costco, Target and
even smaller ones do it. However the problem and scale is magnified because
Amazon has a monopoly on online shopping so given their volume they can always
undercut everyone else.

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tjholowaychuk
They've been doing this for ages, it's nothing new haha

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Giorgi
Is this surprising though? Bank owners do this all the time

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econcon
Who knows if Shopify employees are not doing it privately!?

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jacknews
no shit

we're in the era of 'all out competition', rules be damned

look at China

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edtruji
That’s the reason Walmart use Azure Cloud and Not AWS.

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stevemadere
Surprise Surprise. So did HEB, Safeway, etc.

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shabuta
Isn’t this what Walgreens, CVS or even Costco do? It’s called capitalism. When
you want to invest, build and grow the channel then you can do the same. Not
totally sure why people think this is unfair.

~~~
rosywoozlechan
Well, there are antitrust laws, aren't there. So it's not that straight
forward.

------
api
Apple does this with apps too.

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MagnumPIG
Breaking news: Amazon is evil

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MisterBastahrd
How Wal-Mart of them.

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vinniejames
"its own sellers" aka its own data, why the surprise here?

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xmly
Why is this news?

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AtomicOrbital
If true this is Crony Capitalism at its finest ... I almost think a competitor
planted operatives inside Amazon to pull this off - Pure Evil

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fishingisfun
nothing new. Read the book about it and it mentions this process on virtually
all the categories they list for selling

~~~
dredmorbius
What book?

------
vadasambar
Am I the only one who could not access the article because it sits behind a
paywall?

------
dmtroyer
duh.

------
cocktailpeanuts
Thanks for the enlightening insight, captain obvious.

Every single platform company, whether online or offline, does this. Apple
does this with their appstore. Microsoft did this with their windows platform.
Every retail or grocery store does this by developing their own native brand
that blatantly copy existing products but with a bit lower quality and lower
price.

Is this good or bad? Well this is how the vendors are forced to innovate, and
that's good for the consumers! If we just all become social justice warriors
and shame all these platform companies to do nothing because their products
shouldn't hurt others like a bunch of communists, then it is US, the
consumers, who lose from this. And even these social justice warriors, at the
end of the day, are all consumers.

I also find it weird how they say Amazon "scooped up data", when all that data
has been on Amazon's own server all along, voluntarily.

~~~
mthoms
Important line from the article

> a practice at odds with the company’s stated policies...

> .. as stated to congress

(per the comment of user "so_tired" above)

------
SlowRobotAhead
Hmm, I see a lot of people here mad and arguing for regulation to stop Amazon
from making their own white label products, but it seems like selective
outrage.

When the discussion is about censorship online (demonetizing, blocking people
who they don’t like but have done nothing against explicitly stated rules,
banning anyone critical of the WHO) the argument often becomes “They’re a
private business, they can do whatever they like and you don’t need to use
them”.

How is the solution if you don’t like what Amazon is doing with white label
products (that almost all major retailer does) to just not use Amazon?

Even if you consider Amazon a monopoly, they don’t prevent the name brand
product from being sold there. If they did it would be a similar issue.

This really seems like a Rorschach test for a political ideology.

