I think it “makes sense” already. The previous generations of Pro were too tempting and Apple probably feels that hobbling them will push people to spend more on Max chips. I also bet the new Pro chips are less costly (node issues aside) since they have many fewer P cores. It’s just sad that the new M3 Pro is a sidegrade at best. I’m hoping M4 shows an actual performance increase for Pro chips now that they’re (hopefully) done cutting the P cores.
Can confirm. Amazon's warehouses have been absolutely packed lately, sellers have have been complaining about inbound shipping limits for most of Q4. This is despite Amazon growing warehouse capacity by a huge amount in 2021 and having plenty of excess capacity earlier in 2022. Also, the lead times at our factories in Asia are the shortest that they've been since the pandemic began.
Here’s another perspective. We own voltive.com. It cost us $28k. “Us” is me and my partner, small business owners with families and bills, working to build something of value in the world. We bought the domain from someone who had never used it for anything. Is it just that some guy fleeced us for $28k by squatting on that domain for 20 years at $12/year when we were actually trying to do something productive with the name? I certainly don’t think so.
Out of curiosity, why pay so much for the domain name? Could you not have chosen a name that had an open .com domain?
Aldo, if this was your trademark before buying the domain, are you sure you couldn't have used the ICANN trademark squatting process to seize it? That would have only cost about $1500. Some people look for trademark registrations to preemptively buy the .com domain (and then sell it back to you for $10,000+), but the ICANN specifically has a process in place to prevent this kind of extortion.
We were deciding on a business name at the time, so we didn’t already own the trademark. Based on other similar names that we were considering, voltive.com should probably have been under $10k, but the seller absolutely refused to budge (why not, carrying cost is only $12/year after all).
But getting a decent name is hard. We wanted something that was two syllables, not trademarked (trademarks are important when selling on Amazon, as we do), easy to spell if you hear it said, had a toll free phone number available (we have 888-VOLTIVE). That narrows things considerably.
For our purposes (and most businesses), those are marginal improvements. And there's absolutely no way the very significant risks involved with handling cryptocurrency are worth it to us.
And you lose the right to effect any chargebacks if any errors happen anywhere in the process, including mistyping the receiver address. I would happily pay 0.04% for such a powerful insurance.
Our products are popular with the vanlife crowd. We’ve sold to dozens of conversion companies at this point (we sell wire that can be used to hook up all the low voltage devices that get installed in them). So I’ve tried to figure out who is buying these, since as many people have noted, they’re so danged expensive. The best I’ve come up with is: people enjoy recreation. Some people like to go to the lake and might buy themselves a $100k boat. Other people like camping and might buy themselves a $100k van conversion. As for why a van vs an RV, I think there are arguments about size and maneuverability, but really I think it’s just that the Mercedes vans are cool, RVs are not, and people with disposable income like cool things more than uncool things.
I agree, seems to me like a lot of their popularity was tied to pandemic lockdowns coupled with people's balance sheets going up because of stock, real estate, etc. Basically, a microcosm of the huge increase in home improvement and durable goods spending in the last 2 years.
Flexport is a freight forwarder. You tell them where you want your international shipment to go and they make all the arrangements with the various intermediaries to get it from origin to destination and through customs. I’ve worked with a bunch of freight forwarders and Flexport’s software is far and away the best that I’ve encountered. Most freight forwarders operate on email and Google Sheets. You constantly have to call and prod them to get updates on your shipment. With Flexport everything is in their app and they have good behind the scenes systems for keeping shipment info up to date. It’s kinda hard to explain how much better of an experience they provide to someone who’s never had to deal with freight forwarders.
Flexport started to "disrupt global trade" (in a positive sense) and ended as a global freight forwarder. The latter is impressive enough, just a tad short of the initial goal.
One software house that I like a lot in the logistics space is WiseTech, a lot of the big shots, e.g. DHL are using it.
Yeah, for sure, a lot of traditional freight forwarders and 3PL providers don't have fancy API's and tracking. But there are certainly a lot that do. And some of those have vertical integration (and therefore potential for massive internal cost savings). I'm not seeing the potential for market disruption in comparison to these players, other than perhaps the massive cash injection Flexport has that these companies don't.
To me, the story of Flexport is, "We spent 1 billion dollars, and now we have a profitable Freight Forwarder", which for sure is an amazing success story because that is not easy, but also all their competitors are in their own way pretty amazing.
This is nuts. Amazon is simply choosing not to show the product. It's the seller who decides what to do about that. They can raise the price at the other retailer or they can lower the price at Amazon. Fees are similar across all of the marketplaces, so it's not like sellers make lower margins on Amazon.
But Amazon isn't doing this so that they can make the other retailer's customers pay more. They're doing it to make sure their own customers pay the lowest price that prevails in the marketplace. It's just that this is the only mechanism they have for accomplishing that. Amazon can't control what a seller does elsewhere, but if a product is on sale elsewhere, they can basically tell the seller that they refuse to list it on Amazon unless the seller reduces the price to match the other retailer.
So far most of the discussion is about pricing on Amazon vs. other retailers, but Amazon also does this between sellers of the same product on Amazon. If there are multiple sellers of the same product, Amazon will funnel their customers to the seller offer with the lowest price. The jargon term for this is "getting the buy box".
> But Amazon isn't doing this so that they can make the other retailer's customers pay more. They're doing it to make sure their own customers pay the lowest price that prevails in the marketplace. It's just that this is the only mechanism they have for accomplishing that. Amazon can't control what a seller does elsewhere, but if a product is on sale elsewhere, they can basically tell the seller that they refuse to list it on Amazon unless the seller reduces the price to match the other retailer.
Nonsense. Selling on Amazon takes a 18-33% markup on the price of the product. Amazon forces this margin consumers by requiring sellers to not sell cheaper elsewhere; even though selling elsewhere may cost the seller less.
> Selling on Amazon takes a 18-33% markup on the price of the product. Amazon forces this margin consumers by requiring sellers to not sell cheaper elsewhere
Amazon charges a referral fee on all 3rd party transactions. It varies by category, but is typically 8-15%. All retailers take similar margins. For instance, the largest retailer in the US is Walmart. Here is a list of their 3rd party referral fees: https://marketplace.walmart.com/referral-fees/.
Given that the retailers all take similar margins, I think it's crazy to somehow paint this as Amazon forcing a markup on customers. All Amazon is doing is refusing to show products if the price on Amazon is higher than at a competitor. It's the seller who chooses what to do about that. They can either raise the price at the competitor, or they can lower the price on Amazon.
Again, the retailer's margins are similar, so it shouldn't matter.
Fees are even less if they sell direct on Ebay or Shopify.
> Given that the retailers all take similar margins, I think it's crazy to somehow paint this as Amazon forcing a markup on customers. All Amazon is doing is refusing to show products if the price on Amazon is higher than at a competitor. It's the seller who chooses what to do about that. They can either raise the price at the competitor, or they can lower the price on Amazon.
Think of it this way: If that was the case, then why does Amazon require them to sell it for the lowest price on Amazon?
Amazon has a dominant market position, extracting more margin then competitors, yet they engage in this anti-competitive and consumer damaging behavior of requiring sellers to sell products at low or below cost in order to 'play' on the amazon.com marketplace.
Shopify is not a meaningful comparison, since it is not a marketplace. They don't bring customers to you. They're essentially a hosting and payments provider. You have to get traffic yourself.
> yet they engage in this anti-competitive and consumer damaging behavior of requiring sellers to sell products at low or below cost
Is your position that they are increasing the prices consumer pay or that they're decreasing them?
> But Amazon isn't doing this so that they can make the other retailer's customers pay more. They're doing it to make sure their own customers pay the lowest price that prevails in the marketplace.
Those two statements sound like the same thing from different perspectives.
They (as in, Amazon) are not setting prices. The 3rd party sellers decide what the prices are: they can either lower the price on Amazon or raise the price at the other retailer. Amazon doesn't really care; they just want to sell stuff and take their cut. And ensure that customers don't develop a habit of price shopping everything after they do all their research on Amazon.
By insulating themselves from price competition they indirectly increase prices seen by consumers.
Consider the counterfactual case: if there was an Amazon competitor with higher efficiency they could compete by offering a lower take-rate. Sellers could then sell the same product with the same margin at a lower price, and buyers would benefit from those lower prices.
Instead, Amazon is using its market power to prevent alternative stores from competing with it on price by hamstringing sellers. This means that while the sellers’ margin is exposed to competitive pressure, Amazon’s margin is not. And that means higher prices.
Counterfactual is a good term for the scenario you described since it is counter to the actual facts in this situation, which are that Amazon's referral fees are in line with all the other marketplaces and it's the 3rd party sellers who are setting prices, not Amazon.
Does it seem relevant that other marketplaces with lower marketshare can't reduce their take-rate to lower consumer costs and gain marketshare because sellers would have to raise their prices a corresponding amount if they want to stay on Amazon?
How would another marketplace lowering their referral fee cause sellers to raise their prices? They can either keep the extra margin at the marketplace with the lower fees, or they can reduce their prices at Amazon.
We sell on Amazon. The fees are not insane. It varies by category, but typically they range from 10-15%. Amazon brings tons of value to the relationship, so we're happy to pay that fee.
10-15% could be 50-60% profit for most sellers. Sure they’re beneficial to you now, but what happens when Amazon starts private labeling the same things you sell? Or your supplier starts selling on Amazon and undercutting you? There’s a reason new DTC brands avoid Amazon and that’s cause you’re not building a customer base or your brand, just helping Amazon build there’s.
>There’s a reason new DTC brands avoid Amazon and that’s cause you’re not building a customer base or your brand, just helping Amazon build there’s.
THIS X10000! Happened to a colleague of mine not too long ago. She developed a product, and sold on Amazon as well as her own storefront. As soon as she started seeing solid volume on Amazon, her product became an "Amazon preferred product" or something like that. However, within 2 weeks of getting that distinction, her sales dropped to 0 on Amazon. Why? Amazon started selling a nearly identical product - Amazon used the sales data to understand her product was popular, and went right to her supplier and cut her out of the equation.
> Amazon used the sales data to understand her product was popular, and went right to her supplier and cut her out of the equation.
This is not a new thing either. Or unique to amazon. This has been going on for decades (or as long as retailers have had own label products). Every Walmart/safeway/target/kroger branded product is essentially a clone of somebody else's product that they figured out they could do cheaper.
Years ago my MiL was selling her baked goods directly to a local grocery chain. They then decided to bring baking in house and came out with an almost identical product line.
If you have a product that is easily copied/reproduced (and not patentable) then a retailer can remove your margin by doing it themselves and in this case your value becomes the brand/brand recognition and not the product itself.
Yup. Amazon provides an extremely valuable service to us: they provide a stream of customers who are at the end of the sales funnel and ready to convert because they trust Amazon's platform.
> What happens when Amazon starts private labeling the same things you sell? Or your supplier starts selling on Amazon and undercutting you?
This is going to blow your mind, but we compete against both Amazon Basics and our factory.
We compete with Amazon Basics by selling a differentiated product. Amazon will never be able to compete in every product niche and at every level of quality/differentiation. It's actually not possible for the same reason that a centrally planned economy breaks down above a certain level of complexity: there are simply too many different niches that need to be addressed and the profit motive is the only system we've discovered which ensures that they get addressed.
And we compete with our supplier by understanding the market better. They're good at manufacturing, but they don't really understand the end user. The type of personality that is good at operating a factory tends not to be the type of personality that is good at marketing. HN doesn't really like to hear this, but sales and marketing are actually an important part of running a business, especially one that sells to consumers.
By your theory, any business with suppliers or retail customers is one hire away from extinction. But we don’t actually see all that much of this kind of competition out in the real world. There is a reason that firms specialize: the size and organization of a firm is tied pretty tightly to the kinds of activities that pay the bills and manufacturing is very different from sales and marketing is very different from running an online retail marketplace.
Agree with your larger point, but prices actually were flat or slightly down in July vs June, which is deflation (they were up year over year, but that’s due to inflation in preceding months).
