It’s not accurate though (see other comments). The one I’m amazed by is the assertion that “ The supermarket pays for everything on its store shelves (except, rarely, for certain new products on a consignment basis in which case it only sales for units actually sold)” which is leaving a lot of money off the table
Supermarkets might pay for the product, but Kellogg’s, Budweiser, etc pay them for shelf space, eye level, end of aisle placement, etc. there is a dozen ways they make money off the sellers. Supermarkets don’t just pay for product as a textbook marketplace
> Supermarkets might pay for the product, but Kellogg’s, Budweiser, etc pay them for shelf space, eye level, end of aisle placement, etc. there is a dozen ways they make money off the sellers.
I don't see how this invalidates the analogy. Brands paying for eye-level placement is the same as 'sponsored products' on Amazon. Any Amazon Seller has a right to do this and Amazon has the right to sell this access. Just like any brand has the right to meet eye-level requirements.
Yes, supermarkets have a store brand. Yes, they may also place store brand items at eye-level at no cost. But! I think there are two key differences:
1) In most cases, supermarkets buy from the existing product manufacturer at wholesale in order to be able to slap their brand on the product and use other cost saving measures (ie: bland, cheaper packaging, etc) to sell the same product at a lower price. In cases where they don't buy from the manufacturer, the copy of the product is likely not covered by a patent or is different enough as to not infringe on the patent/trademark.
2) Many Amazon Sellers are small independent companies, just look at their success stories page [1] to see the extent to which they market to small business owners. These businesses likely can't afford to patent their products and when Amazon decides to copy their product (based off the data they collected [2]), they can't defend themselves and their product effectively.
Not all Amazon brand products are a problem. The biggest issue is the exploitation of companies in a certain 'sweet spot' on its platform. These small businesses have taken on risk to provide a good product that sells well, but aren't big enough to patent the product or hire lawyers.
Maybe Amazon is just a symptom caused by the imbalance of power in the economy right now. Either way, it's unfair and should be fixed. I think separating Amazon "the marketplace" and Amazon "the competing store brand" would help (as long as Amazon "marketplace" sells store data to Amazon "brand name" at the same price it offers everyone else).
A law requiring store brand items to be made from an existing manufacturer in it's "marketplace" would also help. Supermarkets would be mostly unaffected, Amazon would need to a) buy the product from it's Sellers at wholesale volume (like a supermarket) and b) compete based on other merits like faster shipping, customer service, etc.
Supermarkets might pay for the product, but Kellogg’s, Budweiser, etc pay them for shelf space, eye level, end of aisle placement, etc. there is a dozen ways they make money off the sellers. Supermarkets don’t just pay for product as a textbook marketplace