
Allbirds CEO on Amazon's copycat strategy - hhs
https://www.axios.com/podcast-amazon-allbirds-e4f77873-b4ad-4b29-94c1-104b793347ce.html
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helen___keller
Allbirds is a luxury brand. Retailers offer cheap versions of luxury brands.
There's little surprise here. Should Ray-Bans complain that Walmart offers
sunglasses that look nearly identical at a tenth of the price?

Amazon has plenty of dodgy business practices, but I don't think this is one
of them.

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kadoban
Just because it's common doesn't mean it's not also dodgy.

~~~
ghaff
Serious question. Why is it dodgy?

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rburhum
Because designers spend an entire year designing what they are going to sell
as their line for the year and when they show it on the runway, Zara takes a
photo and has it mass produced and sent to stores in two weeks. They do this
consistently. It is dodgy.

~~~
csallen
Don't hate the player, hate the game. That's business. The fact that your
designers worked hard is irrelevant. Capitalism is by its very nature
competitive, and it's on you as a business owner to figure out a working model
in a world with fast followers.

It's a bit like complaining that someone blocked your shot in basketball. It's
allowed, those are the rules, do better next time.

~~~
ghaff
If you don’t think this should be allowed (and it’s sort of pointless to argue
dodginess if it’s perfectly legal) you have to logically argue for much more
stringent IP protection.

Added: Of course some protections do exist and I don’t doubt some knockoffs
skirt or outright violate those protections.

~~~
ioror93jf
That doesn’t follow.

One could argue as well we should minimize the draw of purely romanticized
notions that premium things should exist.

Other than inflated pricing pushing more money around in one go than cheaper
stuff pushing a lot of little money around, what does owning premium
accessories get humanity?

Stop manufacturing final products & retail can be just the materials that
enable people to make their own accessories if we’re worried about style
differentiation.

Or we could keep drilling into ideas like yours which will result in more
consolidation of economic activity in the hands of the haves.

Like markets, brands are simply propped up by feels. IMO pretty sick of being
told I need to give a crap about Coach as a business so a minority can
actually design/create while the majority get to deal with their HR and
accounting needs.

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toasterlovin
If you can't succeed because somebody made a low effort, low quality copy of
your product, then you don't deserve to make money. Especially in light of the
fact that Coke has been around for 150 years and is essentially just sugar
water.

~~~
ses1984
Coke actually has regulatory protections in place. They can use flavor
extracted from coca plant through a special arrangement with the dea.

Anyway they sell all kinds of varieties of sugar water, and the margins are
extremely thin.

~~~
dobleboble
Margins are thin?

"Coca-Cola's latest twelve months Net Income Margin % is 23.1%."

"Coca-Cola's Net Income Margin % for fiscal years ending Dec, 2014 to 2018
averaged 14.3%."

[https://finbox.com/KO/explorer/ni_margin](https://finbox.com/KO/explorer/ni_margin)

~~~
supercanuck
They split off Coca Cola Enterprises to achieve this.

[https://en.wikipedia.org/wiki/Coca-
Cola_Enterprises](https://en.wikipedia.org/wiki/Coca-Cola_Enterprises)

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verelo
> Amazon is known for watching what retail products gain traction on its
> platform and elsewhere and then creating similar products it can sell for
> less.

Should we really care? Isn't this what consumers want? Value.

~~~
luxuryballs
Better, cheaper, faster, thanks Amazon.

Plus let’s be realistic any actual good stuff isn’t going to be worth
attempting to copy, say an iPhone or some Burton snowboarding boots.

Amazon computer mice? HDMI cables? Socks? We are just watching commodities
being realized for what they are.

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dinisp89
Allbirds shoes look very very cheap. I stopped into their NYC store downtown
twice. Each time I noticed a ton of glue that had seeped onto the wool when
they glued the fabric on. I thought the first time it was a one-off issue. The
pattern continues. Allbirds really needs to step up their quality. If you look
at the product quality of Merrel, Danner, US Made Red Wing Shoes, it's night
and day! I would never buy an Allbird.

~~~
OnlineGladiator
You're comparing work boots to what are effectively wool slippers with rubber
soles - of course there's a difference in quality because they're not even the
same market segment.

I agree with you they're overpriced, but not for the reasons you stated.

~~~
magashna
Maybe they should aim for a different market segment then. Common Projects, a
plain but very well made luxury sneaker seems to be doing well. I'd imagine
fighting for scraps against Amazon/Walmart isn't going to go well.

~~~
peruvian
Their market is well off techies/tech adjacent people that don't care about
fashion and just want to be comfy (Allbirds are the butt of jokes in any men's
style community).

They can't price their shoes too high because their market would scoff at
paying more than $~150 for shoes. This market also won't care about where the
material is sourced from or who makes it.

Allbirds made a cheap product people can easily copy, so they did. Shrug.

~~~
dzhiurgis
My biggest problem with them is they wear out in less than a year. Extremely
unreliable...

That said, if you love merino - check out Icebreaker...

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40acres
Abstractly, the question at hand is this: is a retailer that sells its own in
house brand anticompetitive due to the information it has on potential
competitor sales?

Other large retailers: Target, Walmart, etc. have a higher percentage of in
house brands for sale than Amazon. So on this argument going after Amazon
means you need to decouple retailers from in house brands across the board.

Even the concern about search placement has concerns, as shelf space in the
store can be viewed as a analogous to search pages.

~~~
readams
I think most people don't know that shelf space is actively sold by the
stores. They imagine the stores go out and find the best products to display.
That's not what happens.

~~~
criddell
That's not always true. I don't think it would matter how much Amazon money
offered Apple, they aren't going to install an Echo end cap.

~~~
sct202
Yeah, the person above you makes it sound like stores just have giant Dutch
auctions for space when it's more like negotiating terms to a contract after
they've already passed other qualifying steps.

~~~
readams
[https://en.wikipedia.org/wiki/Slotting_fee](https://en.wikipedia.org/wiki/Slotting_fee)

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timothyjames
This is pretty ironic given that allbirds are very much a derivative of Nike
Roshe Runs which were popular at the same time Allbirds was founded.

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oh_sigh
I own a pair of all birds. I think I paid around $100 for them. I wouldn't be
surprised if the actual cost of the shoe was around $8.

Amazon is a margin-eating business("your margin is my opportunity"). You can't
expect margins like that to just go on unmolested from anyone. I'm honestly
surprised Amazon hasn't done more of this - e.g. in the makeup industry which
has notoriously high margins.

~~~
dfcagency
It's more around $25-$35 when you factor in all overhead.

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bernierocks
This is why I stopped selling on Amazon. It's compelling because there's a
built-in customer base. But in the long-run, they will use your selling data
against you and eventually attempt to put you out of business by finding a
cheaper supplier.

~~~
toasterlovin
We have built a good business selling on Amazon in a product category where
the competition (including Amazon Basics) is half of our price. If all you
bring to Amazon is something that is undifferentiated and can be easily
copied, then it'll be a race to the bottom and you'll lose to factories in
China selling direct or players like Amazon who can achieve massive economies
of scale.

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snarfy
My problem is when the oligopolies hurt the market with these practices.

I used to buy boxes of nitrile gloves from Home Depot for painting. Then they
started carrying 'HDX' brand nitrile gloves. Then they stopped carrying all
other brands of nitrile gloves.

I'm not sure the practice is the problem, or the oligopoly. I would shop
somewhere else, but where am I going to shop? Lowes?

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peruvian
I'm not going to defend Amazon or capitalism as much as others in the
comments, but Allbirds are fairly cheaply made shoe sold at a high price to
well off tech workers or tech-adjacent workers. It was only a matter of time
until someone that can eat the margin (Amazon) stepped in.

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WooShoa
This is what happens when the internet is essentially taken over by the walled
gardens of "platforms" where the only choices you have are the ones your
masters in charge of the platform you have subjugated yourself to allow you to
have.

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kevmo
Amazon needs to be broken up.

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jbverschoor
Well. allbirds has serious supplychain and production problems. This is their
own fault

