

Login And Pay With Amazon – Yesterday’s launch will change the face of retail - jaggs
http://www.redferret.net/?p=40414

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elmuchoprez
One of the things I'm not sure the general public is aware of is that there's
a very high stakes war going on behind the scenes between Amazon and much the
e-commerce ecosystem. As the author points out, Amazon is good at what they
do; maybe too good.

If you're a small e-com retailer, selling your goods on Amazon can seem like
the magic bullet you've been looking for. They can provide you a huge audience
overnight. And if you have a good product at the right price, you're probably
going to do well on Amazon. The danger is when you do well enough that Amazon
takes notice, because if you're little slice of the industry starts to look
too profitable, Amazon will come in and start selling in your category direct.
And they're bigger than you and can do it on a smaller margin. Entire
verticals can be consumed in a matter of weeks if Amazon decides to set up
shop next to you. Amazon is really good at destroying the retailers that they
helped in the beginning.

But it doesn't stop there. Once Amazon squeezes out the small players, they
start acting like Walmart with the manufacturers. They start dictating margins
and pushing down prices. And they can do it because they've monopolized the
distribution channel. Amazon isn't making a lot of friends with manufacturers
lately.

My point is that while this may be a clear win for consumers, it's a very
sticky situation for manufacturers, distributors and retailers. If you go to
most of the major e-commerce trade shows, you'll find that people are actually
quite fearful of Amazon. They're looking for ways to widen the gap, not close
it. Heck, in the past year I've actually started to get contractual
obligations from some major manufacturers that I CAN'T sell on Amazon. They're
mandating that all of their retailers keep their product off of there because
they're scared shitless that it's just a matter of time before Bezos starts
dictating their margins.

For better or worse, I do think Amazon will be successful to some degree with
this project, but there's going to be a lot of behind the scenes fighting to
get there.

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jaggs
Mmm...that's very interesting. Surely Amazon can't do this too much before
eventually attracting the anti-monopoly lobby, or am I being naive?

~~~
webjprgm
Apple iBooks lawsuit by the US government is relevant here. Book publishers
and Apple made a deal to change pricing to an agency model, where the
publishers dictate the price. The US government sued them on the basis of
anti-competitive price collusion. This slapped Apple and let Amazon go back to
it's race-to-the-bottom pricing. In fact the US government is right that
Amazon's methods are the essence of a free market. They are just bad for every
other player and lead to Amazon expanding it's market share and thus making
Amazon more of a monopoly.

Very interesting twist.

It gets bad for consumers if:

1\. Once Amazon has all the market it raises prices.

2\. The price pressure on manufacturers, publishers, and other producers of
goods causes those businesses to fail and stop making their products, or to
produce lower-quality products.

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moutarde
3\. Amazon gives preferential treatment to merchants using their auxiliary
services. They already give preferential treatment to merchants using Amazon
Fulfilment by writing off (at least some of) the bad merchant feedback caused
by fulfilment issues. This effects customers (as well as merchants) because
from the customers perspective failed fulfilment is the same no matter who
does it.

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lmg643
I am a big Amazon.com customer, and I'd be very happy to see this widespread.
I am tired of Paypal trying to use my bank account as the primary payment
mechanism, and having to switch it most of the time. I would love to have more
of my purchasing consolidated in a single place. Amazon also has a fantastic
return/refund policy - would be interested to see how well that ports over to
the payment mechanism.

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peteretep
I have a trust in Amazon that goes well beyond the rational. If something
isn't for sale on Amazon, I probably won't buy it. If I purchase with Amazon,
it'll show up, it'll work, and if I want to return it, it'll just happen. I've
had one or two issues with their Indian customer service via chat, but any
real issues where I ended up getting on a phone, it got solved straight away.

I deeply and truly believe Amazon is on my side, where I believe Paypal is
actively out to screw me.

I will use this service wherever I find it.

~~~
godzilla82
> deeply and truly believe Amazon is on my side, where I believe Paypal is
> actively out to screw me.

Why do you feel so strongly about either of them?

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peteretep
I've had lots of stuff go wrong with Amazon orders, and they have always made
it right, even when it was at a punitive cost to them.

Paypal, there are so many stories of them screwing customers, I don't even
know where to start.

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swamp40
Saurik eviscerated this announcement in yesterday's post about Login & Pay:
[https://news.ycombinator.com/item?id=6516948](https://news.ycombinator.com/item?id=6516948)

~~~
jaggs
That was one 'tiny' merchant's view of the situation. I suspect that Amazon
will be a lot more 'engaged' with larger merchants if it suits their purposes.
I wouldn't write off Amazon strategy based on one first person account.

~~~
saurik
FWIW, they have told me I was one of their largest (I vaguely remember three
years ago "the largest") customers "on mobile", and I was at a level where I
was having nearly routine meetings with at one point a whopping seven people
on their end climbing up the management hierarchy (who would, of course, tell
me they could not provide ETAs on anything being fixed, and over the course of
six months in contact, and now two months since I bothered talking back to
them, still not even the most trivial of fixes have happened).

If you would like to compare how your company will fare in such a situation, I
move a few million dollars a year through their service. I consider that tiny
in be grand scheme of things (so I use that term), certainly in comparison to
Amazon itself, but I am a giant in comparison to most of the other people who
will be looking at their service seriously (I feel like most people who reach
my size prefer not to rely so much on third-party payment networks; in fact, I
don't even want to anymore, and am hoping to start doing direct credit card
billing soon, ironically via PayPal Payments Pro, at which point Amazon is
getting the axe).

But really, the most important points I made are very general: 1) this isn't
new, as they've been in the PayPal-competitor business since 2008, and 2) to
the extent to which this is somehow a new launch for Amazon, it is
demonstrative of a pattern wherein they keep releasing new payment services
without showing how they are related to each other and without having any kind
of feature parity: this isn't a new service... this is a new feature of an
existing service... and that's exactly how companies like PayPal and Alipay
both added it... years ago.

~~~
jaggs
Thanks for the clarification, I didn't mean to be offensive, I was just
quoting your term re 'tiny'.

It looks to me as though the announcement, which may not be new (I'm not sure)
indicates a new marketing push towards smaller retailers, but then I'm not
involved enough to know for sure.

And I would just say that Paypal has an awful reputation as far as their
treatment of their customers, so I would perhaps be a little wary of putting
too much reliance on themr for your switch?

~~~
saurik
I didn't take it as an insult: just a misubderstanding.

FWIW, I have loved PayPal. They actively improve things, tend to be easy to
deal with, actually fix bugs you report (although not immediately, but it does
happen), and I have an account manager who actually gets things done when I
need stuff done. Even before I was large enough to warrant a personalized
person (I currently do like 6-7 million a year via PayPal), I always found
talking to their customer support simple. Frankly, I think most of the issues
dealing with them are because people don't understand the payment processing
business much and end up using PayPal's service for things that you shouldn't
(preorders being a big one, which includes small conferences) and then freak
out rather than attempting to work something out with PayPal (like, I got my
account locked once: somehow I got it fixed in a couple hours).

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ToastyMallows
Didn't they say the same thing about Google Checkout and Google Wallet? Yet
nothing has changed.

~~~
jaggs
Apples and pears? Google does not own one of the world's largest online retail
outlets, whereas Amazon already has its own hugely loyal customer base.
Different?

~~~
webjprgm
Exactly. Google does not have my credit card and I don't want to give it to
them. Amazon already has it. Just like I prefer to use PayPal when I can to
avoid giving a new online merchant my credit card directly, I could now use
Amazon for that purpose.

If I hadn't ever created a PayPal account in the first place then I would have
no motivation to make one. With Amazon I already give them the credit card
info to make purchases on Amazon. PayPal is just a middle-man so I have no
reason to use them already.

Well, except that PayPal lets you receive payments too. Now that I think about
it, I believe I created my PayPal account originally to accept payment for a
website job. Only later did I add my credit card to make eBay purchases. So I
can't completely replace my PayPal account with Amazon services yet.

~~~
ToastyMallows
Google might not have your credit card, but it has the credit cards of 500
million people that have Android phones and purchase apps[1]. I think that's a
pretty sizable chunk of the population. Being able to use Google to buy things
(and digital things) is huge. Yet Paypal still rules as of today.

[1]:
[https://plus.google.com/u/0/+HugoBarra/posts/R5YdRRyeTHM](https://plus.google.com/u/0/+HugoBarra/posts/R5YdRRyeTHM)

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umsm
In our experience, even though amazon has a huge customer base, that doesn't
translate into people deciding to pay with amazon.

On our site, we only monitor Paypal sales, as those are by far the most
abundant.

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jaggs
At the moment Paypal has the initiative because a) it's global and b) it's so
darn easy to set up and use with an email.

But for how long, once word of this Amazon alternative starts to spread?

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cincinnatus
What is actually new here? Pay with Amazon has been around quite awhile.

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thoughtpalette
I just used the Amazon payment gateway on woot.com yesterday and was extremely
pleased how easy the checkout process is.

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franksmule
Isn't this just a rebrand of 'Amazon checkout' thats been around for years?

