No. of Recommendations: 7
That is a fabulous list, even if some of it came from the government. I was aware of some, disagree with a few, and found some new along the way.
My disagreement comes with the argument that Amazon can see trends and then jump on them itself to produce “like” products and sell them to consumers. Sears did exactly that same thing a century ago; the word “Kenmore” comes to mind. Walmart has done the same thing, if not owning the product then taking the category to a new supplier who promises to make similar items more cheaply. (Think: China, even as American flags wave in the aisle.)
This is not new, nor stoppable, nor should it be. Where it goes over the edge, in my view, is in then disadvantaging the originator by product placement in the lineup over the original - although I’m not sure how that’s different than Sears putting the new item in the catalog or Walmart moving one product off the shelf in favor of the Chinese one. But I’m willing to say that Amazon using its “listing” power to advantage its own products is, per se, anticompetitive.
Similarly, I cannot expect Amazon to offer “Prime” service on drop-ship orders not fulfilled by them and sent, instead, from a manufacturer’s warehouse over which Amazon exerts no control. And yes, they should be paid for warehousing products in their many distribution centers around the country, just as grocers are (often) paid to display products on their shelves.
But I do find that “Prime” may (now) be anticompetitive, locking consumers into an ecosystem which gives them a perverse incentive not to use other merchants, and it seems unlikely that consumers are going to pay for more than one such “membership.” Is there a big cohort of people who are members both of Costco and Sam’s (or BJ’s?) I don’t know, but I’d be surprised.
The idea that Amazon started with books and therefore should be confined to that (or perhaps I’ve misread the argument) strikes me as folly. The “long tail” for books only existed for a few years, and only in Seattle. As the company grew parts of the long tail were sequestered at various places and then Amazon opened up to other vendors and eventually the “long tail” of books retreated in the face of “the store that will sell everything and anything”. This, I submit was a profoundly positive development and led to a business model unmatched by anyone, even Walmart (which had 20x the number of “distribution points”, but not the depth of selection at any of them.)
Yes, it also led to the development of the tech infrastructure, from which AMZN now derives a majority of profit. Whether that should be divested is an interesting question, and I am not convinced. Perhaps it should be segregated, but that is a different thing. And - perhaps not.
I would agree that the “have you seen this more cheaply” gambit is (perversely) anticompetitive, as it mandates vendors give Amazon the best price, even as they ratchet up their internal costs of warehousing and shipping, while limiting vendors other distribution venues or marketing efforts elsewhere. This stops vendors from competing on price even as it restricts manufacturers from seeking new markets by holding one arm (price) behind their back.
Likewise the encroaching ad business is fraught. Don’t buy ads, don’t show up in the listing (or show up 43 lines down). Of course you are free not to use Amazon at all, but with such market power that’s a hobson’s choice.
There’s more but this is already too long. I’m not sure what I’d do about it; maybe I’ll put some brain to words later on the issue. Thanks for the thoughtful post.
