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Amazon wants to control third-party sellers’ product pricing (modernretail.co)
241 points by ilamont 6 days ago | hide | past | web | favorite | 185 comments

Once again a click-bait headline that misses why these companies domination continues to grow.

First - a link to actual FAQ:



This is an OPT-IN offer to sellers who want it.


Amazon will be seller of record. That means Amazon will handle all sales tax issues. That alone is a big win.

Amazon is handling all return costs (huh?). So in short run until that changes another win.

Amazon probably thinks they can do a better job pricing products than sellers, increasing the cut for both parties potentially. I'll let reader decide if amazon has any skills in pricing.

This continues a trend towards automation that amazon has adopted when they think computers can do (on average) a better job than people.

If this is a stupid idea, ebay won't copy it. If it isn't a stupid idea - look for SBE (sold by Ebay) in the future :)

I don’t think the problem here is that Amazon is doing something unhelpful. Of course, they have more information than anyone and can set prices better.

The issue is that (according to legal theories on anti-trust) market control, no matter how helpful, is anti-competitive in the long run. Even if companies don’t have to set their own prices, they would be crazy not to: over-price and they don’t sell anything; under-price and they leave money on the table.

I know those rules sound like we are punishing success and good service but the idea is that if a company dominates, no one will challenge them. The service won’t improve or innovate, new companies won’t be able to scale to prove their ideas. It has happened repeatedly in the past, for beloved services. Thinking about those things dynamically helps.

> over-price and they don’t sell anything

Well, that depends on the service itself. I often buy from Amazon not because it's cheaper, but because I know that shipping will be quick, even if it's imported the charge won't be taken by the carrier with an absurdly high fee, that if something has to be returned it will be easy. I even usually avoid third-party sellers on Amazon because of that, even if they are much cheaper.

> under-price and they leave money on the table

You just said that overprice and they won't sell anything. Seems like the alternative isn't money on the table but nothing at all on the table.

> if a company dominates, no one will challenge them

I think that's the wrong part. If someone can do just as good or better than Amazon, they'll do it. Amazon is the proof itself, there's so many products that still have third party on Amazon itself that compete against Amazon.

This option will just let Amazon have access to a bigger inventory for a lower cost than owning it themselves... That's not a huge advantage. I'm sure their algorithmns are already pretty good to balance the right amount of stock.

Anti-trust is dead. DoJ won’t pursue, and a company like Amazon would probably kill future action in the Supreme Court.

I run a consulting company for Amazon suppliers[0], and that reddit post you linked to was mine.

100% agree with you, the click-bait is totally FUD. This program is not a big deal and won't hurt anyone.

I was actually contacted by 2 different journalist (CNBC,WashingtonPost) and both were dying to turn this into an Antitrust article. I didn't really see it that way but agreed it could help LESSEN antitrust liability by being OPT-IN.

[0] https://www.andersonassociates.net

It is an antitrust issue when discoverability of non sold by Amazon products drops etc.

Interestingly, when selling on eBay currently the initial values for starting bid and buy it now price are autopopulated by eBay. Seems a trend in this direction.

Not sure how this wouldn't be considered price fixing or anti-competitive behavior.

Prices are key to free market efficiencies and market for loanable funds.

Amazon really has a marvellous way of being completely anti-capitalist while appearing as it's golden child, too.

Amazon is a scam. Jeff Bezos has succeeded where Jeff Skilling failed.


Because Amazon moved from selling products (and setting 100% of prices) to inviting competition from new and USED products, including letting those compete against its own listings - we are going to bust them for anti-competitive behavior?

There are entire catagories of product where you can save a ton with almost no loss of function by buying used.

Amazon has lowered per unit cost on everything from ebooks to other products because they have data showing increases in demand will beat out loss of net margin. They've sued publishers to try and drive down prices or be able to set lower prices than publishers want. They will generally accept much lower margins than a corner retail store.

They offer all you can eat books (KindleUnlimited) which dramatically LOWERS the per unit cost of books for heavy readers.

Same thing with Prime, they are driving a far far lower per unit cost with movies and music.

The worry should be that Amazon has been an absolutely ruthless competitor since day one. Good union jobs at UPS may be threatened if Amazon thinks it can do the job cheaper with dirty renta-vans and contractors. Any high margin business out there should be a little worried - for example, pharmacists making $175K+/year should wonder what happens if Amazon does 2 hr delivery of Rx with computerized interaction screening. And this is all clearly anti-competitive?

They have a whole platform around de-skilling and automation. Their warehouse workers are told, literally second by second where to go and what to do - fully sequenced and monitored including discipline. This doesn't strike me as a process that will increase prices.

They also do seem to screw - not their customer, but merchant partners from time to time. Customer says product was defective to avoid a return shipment fee. This is actually pretty common. The warehouse DOES NOT do much screening to see if this is true. The customer is not asked for specific details. I'm sure some customer accounts are cancelled over abuse related to this but it seems likely to be low given the number of folks doing this.

"To ward off concerns over margins, Amazon is offering SBA sellers a minimum gross proceed — which guarantees set profit for sellers based on a set selling price, even if Amazon lowers the price — for each product. The catch: Amazon wrote in its FAQ about SBA that MGP would be revisited “typically once every six months,” and that brands would have seven days to accept the new MGP, or reject it and deactivate a product from SBA."

This is literally price fixing.

Furthermore, Amazon hasn't lowered the price of anything not already in-process of technological price changes (like e-readers); if prices are lower it's because the margins shrank, the quality was reduced or the overall tech advanced without Amazons help.

Since they've earned literally half of their past 12 years of Net Income in 2018 alone, it's difficult to reason how they have cut the cost of anything while not making money, nor producing products through greater economies of scale than existing suppliers, while acquiring billions upon billions worth of logistics assets, another billions upon billions of business subsidiaries, and somehow had enough free cash flow to create robots, pay decent wages (even for shitty work environments) and still provide Jeff Bezos with enough money to buy almost equal number of businesses under the Bezos Expedition banner.

Amazon is a fraud, Jeff was a VP on Wall Street before he became a fake ass tech guru, and he and his cronies have been pumping up the stock price fraudulently as a means of providing cash through the sale of treasury stock and because interest rates have been so low since the financial crisis that investors will let them.

The concern with this and other products is that amazon will drive DOWN margins. THAT is the seller worry / complaint. Driving down margins is not price fixing.

Amazon provides a promise that it will pay folks a minimum price for their products, revisited periodically. That is the same thing any other retailer does with their suppliers.

Amazon current net profit is 4% of sales. This is actually one of their HIGHEST % of sales net income number in their history, they've historically been at 1-2%.

Take healthcare for example. They rarely publish their cash list prices making it extremely difficult to comparison shop, they consolidate local competitors into major network to reduce choice, they adhere to minimum price schedules, they surprise you with all sorts of unexected charges which are difficult to impossible to avoid (out of network charges in an in network hospital). Many of those items are flags of anti-competitive behavior by the way.

Amazon has clear pricing, has introduced a marketplace for competition between types of items (including new vs used) etc. When you see folks going after Amazon and not other much clearer issues of competition (false advertising, the health care industry etc) that should raise a red flag. If you look at whether Amazon or the medical industry leads to more consumer bankruptcies, it's not even close.

The worry should be that with huge sales volume they can put future potential competitors out of business in spaces like a digital home assistant etc by underpricing their products.

Sales of pencil cases etc is not going to be their high margin area, their high margin will be in marketplace / fulfillment and compute fees among others.

This seems like it's moving FBA to "traditional" Amazon retail, with a migration plan that makes sense for people who already know FBA.

Stop selling your stuff on Amazon. eBay is better. If you're too large to sell on eBay, then get out of retail right now, are you crazy? Selling products other people make used to have bigger margins because it was a lot of work (opening and running a store). If your only work is buying stuff wholesale and boxing it up and sending it to Amazon then you, frankly, don't deserve much profit for a few hours of monkey level work.

My brother has an Amazon store. He pulled in about $400,000 in sales last year and saw a profit of close to $200,000 doing exactly what you stated (buying wholesale, boxing it up and sending it to Amazon). Huge margins, I know. However he doesn't work a few hours a day, its more like 9 hours a day driving around to different auctions to buy wholesale. Its a lot of work.

That's not wholesale. Margins like that mean he's buying liquidation.

> Margins like that mean he's buying liquidation.

Not really. https://www.amazon.com/Polyhedral-Dungeons-Dragons-Pathfinde... is selling for $10.98 the same thing you can buy wholesale for $1.50. Of course, you can get it from https://www.krakendice.com/faux-stone-green-jade-dice-set-fo... for the bargain price of $8.95.

https://www.krakendice.com/dice-by-collection/pearl-dice/ is selling sets for $5.95 when the wholesale price is $0.49.

Even after accounting for the cost of shipping, I'm pretty sure these are margins of over 100%.

Where are you getting those wholesale prices from? Do you mean the price you can buy an unbranded generic version? Because that's not wholesale, you can't buy it and sell against a listing that's branded.

In general the products that sell well will have a very competitive wholesale market and you'll be lucky to squeeze out 20% margin. It's certainly possible to get large margins in closeouts if you buy items that aren't popular, but it's difficult to scale that. And that's arguably liquidation anyway.

I'm getting those wholesale prices from hengdadice.com, the same wholesaler those two merchants both use. Factory prices, we can only assume, are much lower.

I don't know what you mean by "unbranded generic version". For reselling purposes, you can order a little card with a design of your choice on it (1 design total, 1 card per set of dice) from hengdadice.com, and both merchants I mentioned do that. That increases the wholesale price by a few cents.

The dice themselves are unbranded in all cases.

HDDais is trademarked. https://trademarks.justia.com/877/27/hddais-87727674.html

You can't sell on that listing legally, unless the goods were authorized by the brand owner.

Wholesale would be buying directly from the brand owner, in this case which would be "Shenzhen Lichen Trade Co.,Ltd.".

I don't know if they'd even sell you but if they did they'd definitely charge more than that.

In the United States, you can resell any product you legally acquired from any source, you do not need the permission of the original producer/brand owner.


No, but it needs to have been previously owned by the brand owner.

You can't buy directly from the factory without the brand's permission. That's counterfeiting.

From your link: "this same doctrine enables reselling of trademarked products after the trademark holder put the products on the market."

In other words, it must have been owned by the trademark holder at one point, and sold by them into the market.

If you identify it with that trademark, ok, maybe that's new to me but seems plausible. You can sell it without mentioning the trademark though.

We're talking about selling on an Amazon listing which has the trademark on it, which isn't allowed. That's what I originally pointed out - that the wholesale price wasn't relevant because it's not for the trademarked product.

... and this is why it's impossible to trust the provenance of anything you buy on Amazon!

The factory is the owner of the brand.

Not as far as I can tell in this case. I listed the brand owner above, which seems to have no connection with the wholesaler mentioned.

The brand owner is a trading company, and buys from factories, but is not a factory itself.

The HDDais brand owner doesn't buy from factories. He buys from Hengda. Hengda buys from factories.

HDDais is living the exact dream mentioned upthread, in which his business consists solely of buying things wholesale and shipping them to Amazon.

No, they're doing private label. It's a very different business.

Nothing's stopping you from registering your own trademark and selling whatever you happen to have on hand under that mark. Ownership of a trademark is free.

What is the difference you're seeing?

I didn't say anything is stopping you from launching a private label business.

The primary difference is that you need to spend to promote the listing because nobody has heard of you.

Oh yeah you're right, doh. For some reason I assumed the Shenzen company also owns hengda.

Amazon prices in shipping.

Retail at prices around $10 is all about psychology.

$1.50 is even a pretty high estimate. I've bought very similar dice sets from china for less than $0.50, and they have to ship them to me with that!

Buying generic from China is not wholesale. Wholesale in this context means buying branded goods, either directly from the brand or from a distributor further along the chain.

You also can't scale up the cheap UPU subsidized China Post + USPS shipping. It's for small quantities only. Order ~10+ and they ship via much more expensive means. Try and order a bunch one at a time and customs will catch on and seize them.

Why would customs care? Nothing in the package is an illegal substance

The UPU shipped items haven't paid customs fees / duties (or typically have WAY understated the value)..it's an exception for samples/gifts/etc. If they know you're shipping quantities, they want their money.

This is why some items on AliExpress either won't let you order more than quantity 1, or switch to FedEx only shipping if you increase the quantity.

Maybe his profit quote was vague or excluding Amazon fees. That's not that far off without having to do liquidation. Which is also a viable way to make money selling on Amazon.

Amazon fees using FBA typically run around 30% depending on average price. More if you do private label and have to pay advertising.

Talking about gross profit without including fees is effectively meaningless.

My rule of thumb for a successful wholesale business is 50% cogs, 30% Amazon fees, 20% margin. There are companies that do a lot worse, and I'm sure some that do better but it's extremely difficult to beat 30% margins at any kind of scale without doing liquidation, getting some lucrative exclusives, or otherwise find a very uncompetitive niche.

Source: have done several million in sales across hundreds of thousands of units on Amazon in the last few years.

You were higher volume than I, and my Amazon fees across the board ran about 35%, so I completely agree with your assessment. However I was buying liquidation and my cogs tended to be lower, although my processing time/expense likely higher to compensate.

Not only is that a lot of work, as you mentioned, but it is very volatile and a constant hustle to find the right products at the right price. And as soon as you find a good product to sell at good margins, you have to be moving to the next product because a wave of sellers, both legit and counterfeit will soon move in and start to encroach on your margins.

Even the sources of auctions are a constant whack a mole. Any consistent auction source soon gets overrun with a constant supply of newbie buyers that overpay for anything and everything just to try and make their trip worth it.

I used to frequent postal auctions for products to resell. Then the droves of bloggers and wantrepreneurs started moving in.

I stopped going when people started bidding up the price of MacBooks of unknown provenance to higher than retail.

You keep thinking, well these guys are going to lose their shirts and never come back. They don't come back. But 4 more will take their place the next month.

> Huge margins, I know.

> Your margin is my opportunity.

I don't your brother's business to last forever. While I'm happy for his accomplishments, I hope he's thinking about the competition from above.

It sounds like his brother is one of those who identifies those opportunities. I think he'll be fine.

Nothing last forever, one strategy is you milk it as much as you can till it dries then move on to the next endeavors.

what is he selling?

9 hours a day of driving pays every other job about 1/5th what your brother makes. Not advocating a race to the bottom, but expecting to clear 200k a year by driving around to auctions all day is still insane relative to what other people make doing similar work.

Are you serious? He's not being paid to drive around. He's being paid to go to auctions, analyze the price of things being sold in large quantities, and decide if there is a business opportunity to sell products in a different market. He then ends up with a large inventory that he must sell, otherwise he is stuck with unsold inventory (risk). He also has no guarantee that the aunction will be selling the same products the week after, so it seems like there is a scarcity risk as well (not having a homerun product to sell constantly)

This is what the retail business is.

He's not just "driving around".

Yeah, this whole thread is based on a false assumption, that the work he does is "easy and equivalent to driving around." It's not easy or trivial to start a business, plus he assumed risk up front.

That's like saying "Property owners just sit around and collect rents, so they shouldn't make any money." It totally misses the point of using capital to invest in and maintain real estate, which is not "sitting around" at all - it only becomes easy after you've done a significant amount of work to make it so.

Real estate is a very poor example considering countless cases of landlords neglecting repairs and maintenance. In some states in the US, there's little or no accountability for this.

Sounds like confirmation bias.

I've watched some YouTube videos about various arbitrage schemes, including refurbishing. It rarely makes sense at a small scale, but if you can get enough product, you can eliminate the waste by scaling up.

I can watch videos/read blogs about how to duplicate a specific win, but by that point so has everyone else and margins drop.

A few people who find the deal early can make a ton, and they get paid well for knowing what to look for in a good deal. Even then, I'm sure pretty much everyone who does well with this has plenty of stories where they lost big, and they only win on average. It's the same as stock picking; investors don't get paid well to watch their investments tick up, they get paid well for finding the bargains, and sometimes an investment opportunity is too good to be true.

I find it interesting to see this similar kind of behavior in video game economies like with Path of Exile. There are people who spend all day looking for good deals or opportunities, and essentially buying and reselling, maybe with some minor tweaks. These people tend to be the wealthiest in the game, with far more in-game currency than people actually playing the game.

I think a big part of that is because most people don’t care at all about economics in a video game. When you’re mostly competing with children and people who just want to game and don’t care about being rich, putting any sort of organized effort toward getting rich becomes substantially easier. EVE is like this too. These people are also often derided as “not actually playing” the game.

Exactly, he gets the risk premium. One of the most straightforward ways of making money in markets is being compensated for bearing risk. This is a systemic factor and will exist no matter how many people are doing it. That’s not to say it will always be so lucrative, but in general he will always get compensated more than someone who is merely dropshipping.

Yeah, but his brother has also taken up a lot of risk. There's a much greater chance he could be out of business with absolutely nothing, or worse, he may buy batch of items that gets destroyed, and worst, doesnt sell. The additional income is to compensate for the risk.

This is why Amazon handles the logistics for so many third-party sellers rather than simply buying their merchandise and reselling it. They get the little guy to assume all of the risk. Unsold products? Your problem. Some kind of defect? Your problem. All Amazon is on the hook for is shipping (and warehousing, although the cost there is a bit more abstract).

And when they are handling the logistics, they also get the benefit of just giving a full refund for whatever reason they like. It's nothing out of their pocket, and it makes them look good to the consumer. So, why not?

They also get to look at all that sweet data and if any one product or group of products starts to look too good for those small 3rd party sellers, they aren't afraid to just drop right in on top of everyone and push their own product to the buy box everytime.

After which they will drive away most of the 3rd party sellers before starting to creep the price upward.

Sounds like his brother doesn’t expect anything, but rather, understands hustle.

To say he makes 200k driving around all day is like saying senior developers make 200k playing with computers all day.

All you do is type a few words on a keyboard!

What a load of success-envy!

It’s not the driving that he is making money on. It’s the risc of being able to buy the stuff and the know-how of what to buy.

Nine hours a day of staring at a computer screen and typing something from time to time pays every other job about 1/10th what programmers make.

Not advocating a race to the bottom, but...

(Go ahead, you can fill in the rest.)

It shouldn't be surprising it's more profitable though because it's not just transport that their brother is doing it's transport in service of the real business which is essentially retail supply.

For all the people concerned about Amazon's business ethics here, stop buying your stuff on Amazon too. It used to be that Amazon had solid products and eBay was just a bunch of random sellers selling random things of unknown quality. Now Amazon is more like the latter than eBay is.

I love using eBay; it puts a bit of excitement back into e-commerce when you get packages from overseas -- the stamps, the names, the exotic goods. This year I ordered from 4 different countries things that weren't available in the US. But most products on eBay are shipped domestically, and they won't slow-roll your shipping for a week because you didn't pay for Prime.

eBay is too high barrier for me. For Amazon- the fact that shipping is fast and cheap/free and returns are easy outweighs any other seller for me.

My ebay thought process, which makes searching a chore..

- Returns will probably be a hassle so I really better want it. - Is it buy it now or do I have to bid? - Exorbitant shipping price or it's "freight" with no price - Shipping may require signature and I have to be at home - Checking seller reputation - Checking seller location

Agreed - though recently I've had several packages from Amazon delivered FedEx with Sig Req'd. Can't seem to find a way to refuse this kind of shipping - FedEx regularly misses deliveries (just two weeks ago I had a signature required package where the driver left a note on my door...despite the front door being open, with me VISIBLE in the kitchen through the open door. I had my back to the door and was cooking lunch, waiting for the package, and the driver just noped out).

Exactly! On Amazon I know I can get (most) anything I buy delivered very quickly and I can return anything without a hassle. eBay, on the other hand, presents an entirely different and multivariable risk model to the consumer.

It's a completely different experience.

I returned to ebay after years of absence when I wanted a replacement wallet just like one I had 10 years ago. I found it for cheap, it shipped, it was brand new in its packaging. I couldn't have been happier.

Since then I've really re-awoken to ebay and tried to get in the habit of looking there and not just on Amazon. So I would second the parent's comment. I could even see there being an ebay revival.

eBay is great for anything cheaper than around $5.

Because Amazon pads the price of everything by about that much to cover the super fast prime shipping.

> If your only work is buying stuff wholesale and boxing it up and sending it to Amazon then you, frankly, don't deserve much profit for a few hours of monkey level work.

This line needs to stop - it's flat wrong.

It's not monkey level work - and it's exactly how the entire manufacturer-distributor-wholesaler-retailer relationship has always existed, and it brings obvious significant value to the entire chain, all the way down to you, the customer.

The only difference is the end customer is now more aware, or thinks they're aware, of the chain. Nothing has changed - and it's not going to change. There's too many things and doodads out there in the world that people want to buy for any single company to procure and manage them all.

My wife tried both at the same time.

Same products, pricing, conditions, number of listings - similar effort per platform.

Amazon outperformed eBay by more than two orders of magnitude, so after 12 months she discontinued eBay sales, because daily Amazon sales started exceeding annual eBay sales.

These days people don't even wan to box it up. They contact the manufacturer and ask them to ship the item direct to Amazon, on their behalf. And they complain when they don't get a big enough discount…

But it gets even worse. They will send you a spreadsheet and ask you to fill it out… with all the information Amazon needs so that it's easier for them to upload into Seller Central.

And in the event of damage or customer service? They tell the customer to reach out to the manufacturer.

90% of Amazon sellers are just leeches. You can pretty easily make money doing it though. A lot of manufacturers still aren't savvy to the game. I had a company that literally had "Arbitrage" in their name reach out to me the other day.

Why aren't the manufacturers selling directly through Amazon?

For many manufacturers, a great deal of their sales come from distributors (the great majority of retail is still brick and mortar).

They can't compete with their customers. Many manufacturers have started selling direct as well, but they usually sell at a bit of a premium to avoid undercutting their own customers.

It's just bad form to do that. And large retailers like Walmart will usually stipulate that you can't sell it cheaper direct.

I think the main reason is that Amazon won’t buy their items at a reasonable price due to what I can only call “price corruption”.

Basically, third party sellers find a way to get a wholesale discount and then sell it through Amazon for a bit more. So the price on Amazon is artificially low. Say you have a $10 item. Maybe your wholesale price is $5. The third party seller puts it on Amazon for $7. Amazon sees this. Now Amazon only agrees to pay you $4, because to them the $10 price is irrelevant. $4 is too low, so you don’t accept and Amazon doesn’t buy from you.

Now, you can sell yourself on Amazon, but then existing retail partners get mad because suddenly you are selling the item for $5 to compete with the arbitragers. I’ve even found some relatively large retailers selling on Amazon under dummy companies to hide their name, but still be able to profit off their high wholesale discount.

Things are changing. But it can be a slow and painful process for small manufacturers.

eBay takes 10%. It’s customer support is just as bad.

It is only bad for the sellers. If you are a buyer, it is great. You get your money back and get to keep the item unless it is a super expensive item.

Plus PayPal takes another 3.

It is possible to pay with credit card (which also takes %).

That amazon FBA "side hustle" stuff you see on youtube isn't as lucrative as it used to be. More people are doing it and the prices drop quicker on the hot items.

> eBay is better

...for what? It's a miserable place to look for stuff, miserable to pay for, miserable to remediate conflict. If you're lucky you'll get what you pay for with no hassle. I can't imagine ever buying a commodity on ebay that I could get from another online retailer.

I can't imagine being out here expecting large internet stores to give a shit about my problems. That ship sailed a long time ago--buy local or accept the shittiness.

> If you're lucky you'll get what you pay for with no hassle.

Well, then I've been "lucky" thousands of times over!

The other question is: better for whom? Ebay is less curated than amazon so sellers have more freedom. Sometimes this freedom results in a worse buyer experience.

> With SBA, Amazon also exerts control over the product’s sale price, by dynamically pricing products to make sure Amazon’s prices are lowest.

> Since only brands in Amazon’s Brand Registry can apply for SBA, the pitch is that SBA will guarantee that the brands themselves won’t be priced out of ownership of Amazon’s buy box by other gray market sellers that focus on undermining retail prices. The buy box all but ensures the product listing on Amazon that will get sold over competitors, and sellers “win” the buy box by offering the lowest price.

> To ward off concerns over margins, Amazon is offering SBA sellers a minimum gross proceed — which guarantees set profit for sellers based on a set selling price, even if Amazon lowers the price — for each product. The catch: Amazon wrote in its FAQ about SBA that MGP would be revisited “typically once every six months,” and that brands would have seven days to accept the new MGP, or reject it and deactivate a product from SBA.

So basically, Amazon always promotes the cheapest products, and they'll automatically lower your product's price to make it cheaper than the knockoffs. You get a guaranteed profit no matter the price, but that can also lower every six months.

This strikes me as a bad deal for sellers.

It's literally what every mass retailer does. CVS, Walmart, etc will use their power to decide your shelfspace/merchandising, combined with private label products and a pipeline of new branded products in your category (e.g. ever wonder why so many new jerky brands pop up and disappear overnight?), to put downward price pressure on you until your margins are razor-thin. This isn't that different. Anyone who has worked in/adjacent to retail understands how cutthroat the industry can be.

Retailers also force suppliers to buy advertising in their owned media channels (e.g. in-store and online) as another way to squeeze them. Amazon is doing/will do the same.

> ...put downward price pressure on you until your margins are razor-thin

And consumers benefit. This is the power and peril of the free market. Everyone loves competition as a consumer and hates it as a seller.

I include folks that sell labor aka employees.

I don't feel like I benefit from a new brand of jerky brand with razor thin profit margins every week. It makes me wonder about what kind of crap is in the jerky, in fact.

Consumers might benefit if mass retailer accumulates liability when it does this but the mass retailer shoves it right on to the party with the razor thin margins.

Competition in commodities is great for consumers. The huge problems appear when the "commodity" isn't -- when some offering is inferior in some usually hidden way (including externalities).

Keeping prices high doesn't protect against that - a counterfeiter will happily sell at a high price, and a traditional supplier might cut quality in theory supply chain to increase profit.

The only solution is to have vendor and supply chain transparency (buying local, and supply chain offering video monitoring of their operations, maybe some Blockchain for tracking shipments end-to-end?), and to be willing to pay for the monitoring and for the quality you ask for. But at the end of the day must consumers talk a good game and then would buy whatever is cheapest or slickest marketed regardlesss of inherent quality or externalities, so it's more efficient to skip the charade.

> But at the end of the day must consumers talk a good game and then would buy whatever is cheapest or slickest marketed

Totally agree. Talk to your local CSA farmer if you want to hear about the difference between what people say they want and what they actually spend money on.

There are plenty of retailers that go out of their way to fight against the race to the bottom, charging a bit more and taking a bit more care to ensure they only stock good stuff. Amazon even owns one such store, Whole Foods.

If other people would prefer to buy dirt-cheap jerky from whoever can offer the lowest price this week, I don't see why it's bad to have stores catering to them too.

> Amazon even owns one such store, Whole Foods.

The quality at Whole Foods has gone down fast since Amazon took over.

Whole Foods sold itself to Amazon because they were starting to see a market that prefers alternatives. Prices had to come down for it to survive, and you can't lower prices on expensive product.

And that's assuming product quality is really lower. The only evidence of that I've seen is anecdata.

The stores look nicer at least. Great lighting!

>I don't feel like I benefit from a new brand of jerky brand with razor thin profit margins every week.

Then find a brand or local business that makes what you want. You'll pay out the nose online probably, but I've found a modestly priced local place that makes great jerky because as you said the store stuff is...not great, and questionable.

Retailers buy from vendors and assume the costs of their own business (warehousing, sales, etc.). They assume certain responsibilities regarding the products they sell in their stores. In this case, Amazon is pushing all the costs back on to the vendor, for whom they only provide some distribution service.

It's common practice for retailers to push many of those costs (as many as they can) back on the suppliers.

For example, Walgreens expects ITS VENDORS to stock the shelves, cycle expired product, and install and replace in-store advertising. Walgreens doesn't do it themselves.

And as for sales, often a supplier is required to buy back stock that goes unsold after a period of time. It's crazy, but that's how much power retailers have.

Oh sure, I work in publishing and that sort of thing goes on. In the old days of mass-market distribution, the guy on the truck would be the one putting books in the racks, and taking back the returns (or the ripped covers). Returns have been a thing for decades. A system of coop payments decides who gets good placement in the store. But in the end, the retailer is paying the vendor for goods sold.

Precisely this, Amazon is not the same as retailers. Amazon may have warehouses but it doesn't purchase and hold inventory the same way CVS or WalMart does.

Sounds this solution only exists because Amazon allows itself to be flooded with knockoffs in the first place. Funny how that works.

Amazon is paying dearly for that which is why amazon is getting so strict on sellers these days. Also the overall shopping experience on amazon is going to hell. Just look up something like a USB battery pack. You'll see dozens if not hundreds of dubious weird sounding packs for sale. I'm convinced that half of them don't even hold the amount of energy they claim to hold.

That's absolutely been my experience as well. I used to shop a lot on Amazon around 2007. I've seen the decline firsthand. These days I treat it like a (somewhat) American Alibaba when I'm looking for cheap stuff where the idea of "knockoff" almost doesn't even really apply. Last thing I bought was some connector pins and what I expect to be harbor freight quality crimping pliers.

If I'm spending serious money, it's not going to be with Amazon.

It’s not only knockoffs. A friend of mine works in CPG and their company’s biggest problem with sales through amazon is that they sell at a loss to compete with grey market sellers who are selling stolen at a much reduced price.

You cannot “compete” by selling at a loss, unless you’re competing for the first spot at bankruptcy court.

Whenever I hear about someone selling at a loss, I automatically assume that either they’re buying market share as a long bet (e.g. typical new gaming console) or more commonly misrepresenting the actual economics (e.g. car dealers neglecting to mention all the rebates they get off their supposed price).

The other common case (not applicable here) is a loss leader: sell something at a loss in the hope that the customers it attracts will buy high-margin items at your store instead of the one they usually frequent.

There are going to be times (a few days or weeks) where sellers think they can "outlast" the competition in a price war.

You're basically betting that the other guy doesn't have the stamina to survive at this price.

Of course, if what the OP says is true, if the other seller has a much lower price point than you do, you can't outlast them. They could still be making a profit at $20 while you're losing $5 per unit trying to push them out.

Think about inventory holding costs. Not only do you have capital tied up in that product in the warehouse, but you also have the opportunity cost of not being able to stock something else to sell.

And to your car dealership point - the way it works for GM at least is that GM sets sales goals for their dealers. Dealer X's monthly sales target is 75 vehicles. They will happily sell lets say vehicles 73, 74, and 75 on August 31st to get their $20k bonus for the month of August. They might not be misrepresenting their supposed price like you think. Also, the same concept of inventory holding costs applies really well for car dealers. It's purely an inventory turnover business. If your lot is full of fusions and you can sell 2 f150s in the time that you can sell 1 fusion at similar profit, you're going to want to get those fusions off the lot potentially at a loss so you can sell more f150s.

I work at a CPG and another issue we have to deal with is an individual having an "in" at a distributor and being able to purchase our products at rock bottom prices. We can usually track these people down, but they can really throw a wrench into an ASINs profitability for a while.

How does this work? By "our products" you mean products your company produces, right? Are you sending the products to the distributor at a price that is too low to make a profit? Why does it matter to you whether they products are bought directly from you on Amazon or through one of your distributors and resold on Amazon by a third party?

There's a couple reasons it matters. Unauthorized third parties rarely care about representing our brand correctly. When a consumer has a problem with a product they received the first person they blame is the brand, not realizing they bought it from a completely separate entity. The product breaking during shipment, the customer buying at a price just to go back and check days later and see a lower price, the product being expired...All of these things are outside of our control, yet as a brand we take the blame.

In my particular case, there is an "anti-FBA" culture at the company I work for. No one can sell our product for as cheap as we can because we make it. However, without access to FBA, it's much more difficult to have complete control over your pricing on amazon. With complete control over pricing you can ensure that your margins will be better than whatever distributor pricing is. Also the competitiveness of our products on the platform against other brands is directly affected by how much the seller (either us or an unauth)can afford to sell the product to the consumer. If a competing brand sells the same thing for cheaper, they will get more sales and thus more market share.

I say "my particular case" but in reality I know of several CPG companies where the anti-FBA culture exists, even though it is the most advantageous approach to selling on amazon with regards to pricing. I wrote this kind of fast so I hope it all makes sense.

This reminds me of a time I needed a blower fan for my refrigerator and Amazon’s recommended one for next day delivery seemed suspiciously underpriced. I ordered it despite my trepidation that the item was going to be made out of silly putty by a Chinese pirate. Upon receipt, I discovered the serial number was filed off and I rested assured that it was a quality OEM but probably stolen. The motor is still working great which is more than one can say for Amazon.

> This reminds me of a time I needed a blower fan for my refrigerator and Amazon’s recommended one for next day delivery seemed suspiciously underpriced. I ordered it despite my trepidation that the item was going to be made out of silly putty by a Chinese pirate. Upon receipt, I discovered the serial number was filed off and I rested assured that it was a quality OEM but probably stolen. The motor is still working great which is more than one can say for Amazon.

Did you notify Amazon or any authorities about this? Would be curious to hear the response.

I didn't. My sense of disgust and disillusion was heightened by the fact that it was an Amazon recommended product. Of late, I am more and more spare about shouting into the wind.

It's common for people outside of retail to focus on margins and ignore turns/sales velocity when considering retail issues, but it misses a lot of the reasoning. Obviously consistently making a loss on a product is a bad idea, but making $1 per sale and selling one per day produces more income than making $5 per sale and selling once per week. On Amazon if you don't "win the buy box" your stuff doesn't sell, or doesn't sell as frequently. What Amazon is trying to do for sellers is ensure that doesn't happen to them, and ultimately is likely to increase their income even if it reduces their margins. Fixing a minimum margin for six months actually seems quite reasonable to me, it gives sellers a chance to make inventory plans on a practical time scale while also ensuring that Amazon doesn't have to absorb any losses indefinitely.

For an opt-in program, how is that a bad deal? Either being the lowest price seller isn't worth it (and so you don't care to opt in) or it is, and you spend a lot of effort to constantly deal with price fluctuations (at which point you want to opt in and get covered by the minimum profit limit..)

> This strikes me as a bad deal for sellers.

...but a good deal for buyers!

The headline is pretty misleading and I have not seen people in the seller community interpret it in this way. SBA is just a different way to sell. They're not getting rid of the other options. It can be a good option for some kinds of brands. You would probably not pick the option otherwise.

Also big nitpick here: gray market has a specific definition and this author misuses the term. The sellers he refers to are not necessarily selling gray market products. Another inaccuracy is that you win the buy box by having the lowest price. This is not true. Any experienced Amazon person could tell you that it is a blend of price, fulfillment method (prime or not), delivery latency (is this offer for a product that is in a warehouse physically close to you), and seller feedback rating.

SBA is actually a good idea from Amazon and they even put in some volatility protections for people who enroll. It is also a good alternative to the Vendor program with some of the benefits without some of its headaches.

If you look at it from the perspective of it being a better alternative to Vendor for some brands, it makes a lot more sense. It is not pitched to conventional sellers who stock tons of brands. It's pitched to brands who want to sell direct to consumer on Amazon. Historically Vendors have also gotten the kinds of indirect marketing benefits that are being pitched to new users of SBA, so even that is not actually a big change.

For example, Vendor products (those shipped and sold by Amazon.com) have always received a massive buy box benefit even if the price is not the lowest. In the weighted buy box system Amazon has always assigned itself a massive bonus score. So in that there is not much that is changing.

Naturally, "incremental bureaucratic change pitched to brands as a middle ground between two existing bureaucratic programs at gargantuan mega-company pitched to other faceless corporations" is not that interesting of an article. This type of opt-in program would work for a very specific type of company and isn't really indicative of a big upcoming change of how the whole thing works.

Great quote: “But Amazon is smart and they know when your — for lack of a better word, addiction — to Amazon increases. Once Amazon is 20% of your business, it starts to claw back that profitability.”

This is not true in my experience. I work for a medium sized CPG in their eCommerce department. We were clearing many millions of dollars through Amazon 1P a couple years ago, but it was nowhere near 20% of our business. Amazon asked for ridiculous price cuts and we walked away. It hurt but there's no point in selling on a platform through which we are not profitable.

On a personal level I hate Walmart and their business practices. Not much of a fan of Target either. But, on a professional level, I'm excited to see their marketplaces take off. Amazon is absolutely horrible to work with and their tools for sellers are obnoxious at best. I'd love to see some real competitors in this space.

How do those conversations typically go in the real world? Is it an actual meeting w/ a buyer agent there? An automated message?

If a live conversation is it a fairly hostile "look at all the sales we're driving for you. Give us this price or they go away because we have all the leverage here"? Or is it a bit more of a back and forth?

Curious to hear any real world examples of how that typically goes.

I think you just proved the OP's point. It was nowhere near 20% of your business, so you could walk away.

I feel like OP's quote was saying that the "seller" is beholden to amazon because it's 20% of their business. Amazon realizes this and then puts the proverbial squeeze on them and forces them to lower their prices. What I was saying was we were nowhere near 20% and amazon still tried to squeeze us to a point not being profitable. So what I'm contesting is that amazon is smart about when they try and get more money out of you. They are trying to do it constantly on the 1p platform regardless of the size of your involvement with them.

Ah, gotcha. Thanks for clarifying.

But Walmart does the exact same thing to their suppliers. They attract suppliers with dangling sales numbers in front of them. Next year they demand the suppliers bill of materials and tell them the exact price they are going to pay and not their problem if they can't meet it.

I have a relative who has a farm that sells products wholesale to a large supermarket chain (not Walmart). One of the supermarket's tactics: place huge orders from you so that you have to ramp up production and invest in new equipment, labor, livestock, etc, and then, once you're ramped up, they stop ordering as much so that your supply is significantly higher than demand and they can dictate very favorable pricing for themselves.

If taking orders in that volume require significant investment, wouldn't you make sure they commit to the order volume over the next N years until the capital investment is paid off?

Many "mom and pop" and "small" and medium businesses fall for it. They simply aren't used to implications of what Walmart or large retailer scaling will require or do to them.

If you want a benchmark for "ethical and well liked company that is not chronically plagued by anti-trust concerns" Walmart probably shouldn't be your reference point.

Walmart is well liked by the people who shop there.

One data point: I have to shop there sometimes and it is the opposite of well-liked. It's a last resort. The employees are miserable, the shelves are disorganized (trash, items in wrong places, just a mess), and the customers are impatient and angry. They do have self-checkout at least now which helps a bit with my biggest complaint (the checkout lines taking forever), but definitely not a place I'd call "well liked". My above criticisms apply uniformly to the 3 Walmarts in my area.

Do you live somewhere decently upscale?

Walmart in upscale areas tends (in my unscientific observation, n = approx 10) to be full of people who are working there and shopping there as a last resort and it shows.

I'm in the immediate city suburbs wherein there are some middle to upper-middle class areas with lower income areas right next to them. Interesting thought, but it doesn't play out at least in "my" Walmarts. The Walmart in the lowest income area is the worst in my case. Aisles where there's no order whatsoever and things like a full unopened jug of milk sitting on the shelf (that's warm) like someone just changed their mind, but no employee ever noticed. Perhaps there's something to be made of the fact that this low income area is right next to higher income areas (creates resentment maybe(?)...just spitballing here).

My even more unscientific observation (n = 2) - I live near two Walmarts, one of which is in a more upscale area than the other. The one in the upscale area is the better Walmart in terms of cleanliness, keeping things in stock, etc.


>The recently published 2017 American Customer Satisfaction Index (ACSI) for retail stores and websites shows that customer satisfaction is down slightly overall from a record high posted in 2016. The retail sector slipped 0.3% overall from an index score of 78.4 to 78.1.

>Department stores and specialty retailers lost the most ground, likely due to continuing satisfaction from shopping online. Walmart Inc. (NYSE: WMT) dropped one point to 71, the lowest among the department/discount stores included in the survey.

>Among supermarkets, Walmart again finished dead last with an index score of 73 versus an average of 79 and a high — for Publix — of 86. Costco scored 83 while Kroger Co. (NYSE: KR) and Amazon's Whole Foods both scored 81.

>Walmart also was the lowest scoring retailer for health and personal care stores, with an index score of 75 against an average of 79. Sears' Kmart stores tied with Kroger for the top score of 80.

The really interesting dynamic would be if a seller doesn't participate in this program, but its competitor for a similar, essentially non-differentiated product does (or more than one competitor) and Amazon optimizes pricing according to what the non SBA-seller is charging. As sales of the SBA product picks up, network effects kick in for search, detail page carousels, and recommendations to customers with similar profiles to the buyers. The non-SBA seller is forced to manually reduce prices, or lose a huge chunk of market share.

The key here would be product differentiation, reviews, external marketing, or something else to keep sales up. But for sellers competing on price, SBA could be a disaster, regardless of participation.

So the same exact thing that Walmart does? You know, the retailer that's bigger than Amazon?

It is terrible but they aren't exactly breaking new ground here.

Walmart is the retailer. With third party sellers Amazon is not. So they sidestep sales tax (in the UK anyway) and various consumer protections. With this change Amazon becomes the retailer in all but name. I hope the tax authorities and consumer groups take note.

Amazon doesn't pay sales tax? Amazon collects and remits VAT in the UK and across Europe.


They also started billing advertising services through a separate UK branch with UK VAT. However, they're definitely not big on corporation tax: https://www.theguardian.com/technology/2018/aug/02/amazon-ha... (Aug 18)

Walmart also has third party sellers.

Not in their stores they don't.

Does that matter when we're talking about online retail? Walmart the physical store might as well be a separate business.

People are mixing up Walmart's retail practices with their online practices.

Walmart's retail arm will squeeze water from a stone. However, their online division actually works with suppliers since they're still trying to compete with Amazon and eBay.

For now.

Yep, there's absolutely no reason they won't squeeze the online sellers later. They already have the precedence with their stores and suppliers. Shit, once they get the ball rolling with their online shop, they could even find products to kick the sellers out and negotiate with the suppliers themselves (the most likely result long term).

So basically you have to manage your own inventory for Amazon, pay Amazon for fulfillment of orders of your product, pay Amazon for storage of your product, and also let Amazon control the pricing to get preference on the buy box. I can see that there may be advantages, but it seems like an awful lot of the burden is shifted to the vendor.

Edit: On second thought, if Amazon has dynamic control of the pricing it may be difficult for the vendors to accurately forecast and stay in-stock.

Don't forget, if you're successful, Amazon will create their own version of your product as "Amazon Basics" and you lose.

Many amazon basics products are just white labeled products. Amazon isn't actually spinning up assembly lines

No but Chinese companies will be happy to spin up assembly lines making a product identical to yours and undercut your product, while Amazon slaps on the 'Basic' brand and pushes it to the top of the rankings.

They totally have relationships with multiple tier 1 manufacturers and have teams pouring over data to pick products to undercut. I hate it when people say this, but I don't know why you've been downvoted.

Yup, sellers need to look very carefully before they decide to sell with amazon. I used to sell on that platform but pulled out. At the end, I wasn't even making money on my sales after fees, shipping etc. Also amazon shoppers are overly picky about product quality and amazon just bends over backwards. That's what really nailed the coffin for me. Now I only sell on ebay and I suggest other sellers to do the same, especially if your margins on amazon are low.

> Amazon exerts control over the product’s sale price, by dynamically pricing products to make sure Amazon’s prices are lowest.

I believe their automatic pricing checking engine only bothers to go to work when it notices a sudden drop in sales of a product. Otherwise, their 'dynamic' pricing seems to try to increase the price as often as possible!

SBA is an interesting offering meant to address long tail brandowners who can't qualify for vendorcentral now that they raised the requirement for it to be ~$10M/year. That's all, nothing insidious here, Amazon is just trying to recapture some of the long tail it cut off earlier this year when they stopped buying direct from small vendors.

This is not a good thing for boutique shops selling premium goods because Amazon will not respect your MAP. This is a reasonable deal if you're selling commodity CPG items and less sensitive to MAP but are not a big player.

Source: low eight-figure seller on Amazon, had a few manufacturer/wholesaler friends get booted off vendorcentral during the VC purge earlier this year.

"To participate in the program, called Sold by Amazon, sellers have to already be enrolled in Fulfilled by Amazon..."

Not to be confused with Fulfilled by Amazon Donations, which will donate unsold merch to non-profits instead of trashing it.


This is an example of something fishy: https://www.amazon.ca/dp/B00JE36GLQ/?coliid=I3I52QIK9800LI this is a $40 coffee maker offered at $2 (plus $15 shipping) from a newly created shop.

Another example of fraudulent products is posting an existing ($10) book at $100 and have it at the top of the results because they changed the publication date with a fake one.

Looks like he got one victim already:

"Still have not received my package even after paying for expedited shipping. Order was shipped 4 days after ordering. I would like a refund for payment of expedited shipping."

Seller now has a 0% feedback score so it is pretty obvious to any buyers that the seller is garbage. The real interesting thing though is the buyer is complaining about a refund on the review so it kind of leads me to believe that the buyer doesn't know how to do a refund lol?

Amazon should just distribute everything themself and market financial instruments tied to prices and quantities (gambling on retail).

I think this addresses two problems:

1. Allowing brand owners to completely remove 3rd party sellers and sell directly on Amazon without much effort

2. Helping new sellers to sell at least something; these days one has to immediately subscribe to some realtime algorithmic repricer if they want to get buybox for/sell a single item; this makes algorithmic repricer a part of SBA

More accurately, Amazon wants third parties to pay for carrying their inventory...

(which isn't always a bad idea, mind... especially at the beginning, before Amazon whittles away at the margin)

Am I missing something, or does this render “Ships and Sold by Amazon” useless as a heuristic for receiving an authentic product since sellers who opt into the program also receive the label?

This is just a way of amazon moving the carrying costs of merchandise off of its balance books and on to someone else's, without the complexity of a floor lease. It mostly sounds like a win-win.

Not surprised, they already do this with ebook. You sell your book for $10 or less you get 70%, you sell it for more, you get 30%

It's for sure true that an algorithm setting the price instead of a human is going to increase sales and be beneficial to both the retail seller and Amazon, but where does it end?

Right now it's optional but it's clear that it's only a matter of time until it becomes mandatory.

I think these companies, especially Google & Amazon are only going to stop when they are split apart by the government due to monopoly concerns.

What an awful title, people should stop using logical fallacies to label their argument.

Less slippery if they keep both a user rating and an Amazon rating.

I mean we all remember what happened to the Grand Exchange right

Illegal in Europe

HN Monday: "It's an atrocity when Walmart/Amazon use their monopoly/sony power to force down supplier prices. That's unsustainable, destroys market signals, and hugely disincentivizes the production process for goods."

HN Tuesday: "It's awesome when governments use their monopsony power to force down pharmaceutical prices, that has no downsides except for lower profits for someone who didn't deserve them anyway."

Lets note that we can see what people are paying in other countries for medicine and its less that we in the US pay.

Not to mention there has been some egregious mark ups. Drug companies are highly regulated anyway, and the "free market" is failing, which is why the market price for some generics is increasing.

Amazon: "We can see what other markets charge for these goods and it's more than we charge. And the free market's failing. So, there's nothing to worry about regarding what we're doing."

Be fair, the 'victims' in those two scenarios are vastly dissimilar. Just noticing "force down prices' is a common phrase, is disingenuous.

That's the point: the sympatheticness of the victim is completely irrelevant to the dynamic, yet seems to be enough to treat the cases as different.

Do you think that the current pharmaceutical prices in the US are the result of fair market valuation?

Not irrelevant. One is a monopolist trying to force down free market prices by fiat. The other is a free market yearning to force down prices by monopolists.

The common dynamic is that all suppliers are faced with a situation, now and going forward, that they must accept an arbitrarily low profit to continue making the good. Do you think that's only happening in one of those cases?

If not, you agree that the the identities of the victims don't break the similarity.

Yes. But in one case its anti-competitive and trying to stifle a free market. In the other its trying to foster a freer market. Thus the different views on each on HN, every day and for good reason.

That's not a difference, that's a reframing. In both cases, in practice, the sellers cannot expect to get more than some really low profit rate, and therefore don't invest in supplying any high-demand good, because the risk is higher and the profits are the same. That's bad.

Hey, it wasn't me trying to frame this as some unreasonable bias by HN.

And its laughable, reframing big pharma as some poor unprofitable wretches.

>Hey, it wasn't me trying to frame this as some unreasonable bias by HN.

I wasn't saying HNers are biased, I'm saying they're inconsistent in reasoning about these cases. (They're biased too, but that wasn't the criticism I was making here.)

>And its laughable, reframing big pharma as some poor unprofitable wretches.

It's even more laughable thinking that "whether pharmas are unprofitable wretches" is relevant to the economic effects of pseudo-price controls after the fallacy and inconsistency are explained.

Come on, pharmaceutical prices are controlled already, by the tiny number of companies in that market. Which is the opposite of a 'free market'.

Its obvious to me we're not discussing this in good faith any more. Pendantry will get us nowhere.

I’m arguing in good faith.
monster99 6 days ago [flagged]

Difference is, one is about the populations health. Given that the US is backwards when it comes to healthcare.

Given the sea of corruption inside the US since it is an oligarchically run state where the citizens basically have no rights (if in doubt look at IP law).

That's the point: the dangers of these pseudo-price controls are irrelevant to whether the goods are health related. Do you believe that it's great when Walmart does this for aspirin, but horrible when they do it for lawnmowers?

I don't believe in the ideologies of the time, call me a doubting thomas that the human race is actually intelligent. I know too much about how human beings and corporations actually function to believe in free market mythology.

See here for if you want more acedemic take:


There are all sorts of things wrong in reality with how capitalism actually functions. The reality is most people are too irrational and too stupid for any market to function as a "market". The videogame "market" is a perfect example. For the first 20-30 years of PC game history, we were getting good software for a fair price. Then the masses got internet and shit went sideways.

AKA people started buying software they didn't own, nor control, giving super powers to corporations to extort them and engage in all sorts of abusive practices and raise prices astronically because the internet now gave them access to people with addictive tendencies and impulse control problems 24/7 and in order to gather the worlds evolutionary unlucky regarding gambling addiction all games now have microtransactions.

I watched my hobby be destroyed, my software robbed and my os infested with dishonest code because stupid got internet. Before the internet Microsoft and game companies had no incentive undermine software ownership because it was impossible to do so.

The market for videogames today is a market for lemons, a total shit show of broken games, stolen games, etc. Because a rational game buyer would never buy a piece of software that a corporation controlled.

If you think you don’t have any rights in America, you need to get out more. I live in Africa and if you want to see the real meaning of corruption and governments that can do anything they want, move over here.

America has robbed it's own population blind for the last 200 years, all cultural works have been sucked up into an international criminal oligarchy.

Software is being stolen en mass and coded fraudulently to remove your basic rights and freedoms to own what you buy because the masses are technology illiterate.

All apps on mobile spy on you and are controlled centrally, and stupid gacha games are defrauding a tiny minority and they don't even get acopy of the game they are spending hundreds of dollars gambling for virtual characters in.

We live in a lawless world, that's reality.

All hail our Amazon overlords

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