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Amazon Discounts Other Sellers' Products as Retail Competition Stiffens (reuters.com)
Amazon is slashing prices of products from third-party sellers on its website, moving beyond its more typical method of discounts on items it sells directly. From a report: The "discount provided by Amazon" applies to products including board games and technological gadgets offered by other merchants as the holiday season approaches. The retailer has been trying to compete aggressively on some items to win sales and draw customers away from low-priced rivals like Wal-Mart Stores. The move allows Amazon to sell the products at lower prices while still giving full price to the sellers. "When Amazon provides a discount, customers get the products they want at a price they'll love, and small businesses receive increased sales at their listed asking price," an Amazon spokeswoman said in an emailed statement, noting that businesses can opt out at any time.
the old "drive all your competitors out of business" ploy. This time, powered by a global conglomerate.
Isn't this a perfect example of monopolistic behaviour? Use your large size to sell a service at zero or even below cost to drive anyone not using your service out of business?
Amazon sells nearly everything its third-party sellers do. I noticed after Amazon started collecting sales tax in my state they began to feature third-party sellers much more prominently in my browsing sessions, none of who collect sales tax because they're mostly virtual resellers with a physical presence in only one state. Amazon still makes money by charging transaction fees on the seller. The fact they're subsidizing discounts for these third-party sellers is more proof of Amazon's sales tax strategy.