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Amazon Discounts Other Sellers' Products as Retail Competition Stiffens (reuters.com)

Posted by msmash on from the assuming-more-control dept.

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.

55 of 98 comments (clear)

  1. Wonderful by hackertourist · · Score: 4, Insightful

    the old "drive all your competitors out of business" ploy. This time, powered by a global conglomerate.

    1. Re:Wonderful by CanHasDIY · · Score: 3, Informative

      Sure, but this time it's Amazon doing it to Wal-Mart. All the little fish were eaten long ago. Now the big fish only have each other to feed off of.

      30 years ago, Wal-Mart pushed all the small shops out of the small towns; now, Wal-Mart is pulling up roots in those same small towns, leaving the residents with no retail grocery options.

      What happens to the bears (consumers) when all the fish have devoured one another, and the lake stands empty?

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    2. Re:Wonderful by cayenne8 · · Score: 3, Insightful

      30 years ago, Wal-Mart pushed all the small shops out of the small towns; now, Wal-Mart is pulling up roots in those same small towns, leaving the residents with no retail grocery options.

      What happens to the bears (consumers) when all the fish have devoured one another, and the lake stands empty?

      I dunno....maybe the mom and pop stores come back?

      In business like anything else, if there is a void, it will be filled.

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    3. Re:Wonderful by Arzaboa · · Score: 1

      We're seeing it happen, and its been great. Small business is back, and folks know where the dairy farm is now.

    4. Re:Wonderful by drinkypoo · · Score: 1

      More likely we get a new online competitor. Something in between eBay and Amazon. They could compete on the basis of having really good categorization and search. Right now there are a lot of things that are really hard to buy on eBay because they don't collect enough information from the seller in forms, while they have very complex metadata for other products. It's easy to buy a motherboard that has the features you want, but not everything is well-described.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    5. Re:Wonderful by CanHasDIY · · Score: 1

      ... assuming mom and pop can get a business loan, which, considering how prevalent food deserts are in modern America, seems like a total crapshoot.

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    6. Re:Wonderful by thomn8r · · Score: 1

      In business like anything else, if there is a void, it will be filled.

      Then why do we have this: https://en.wikipedia.org/wiki/...

    7. Re:Wonderful by cascadingstylesheet · · Score: 1

      30 years ago, Wal-Mart pushed all the small shops out of the small towns; now, Wal-Mart is pulling up roots in those same small towns, leaving the residents with no retail grocery options.

      What happens to the bears (consumers) when all the fish have devoured one another, and the lake stands empty?

      {Raises hand} Er ... someone opens a new grocery store in that town? Seems like a market just opened up.

    8. Re:Wonderful by CanHasDIY · · Score: 1

      This is my concern:

      https://www.cbsnews.com/news/w...

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    9. Re:Wonderful by CanHasDIY · · Score: 1

      Opening a grocery store requires a good amount of existing start-up capital.

      If it was that easy, there wouldn't be such a thing as a food desert, and they wouldn't be becoming more prevalent every month.

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    10. Re:Wonderful by CanHasDIY · · Score: 2

      I never said anything about "the hood," and FYI it's pretty telling that you make the assumption that food deserts only exist in high-crime sections of large cities.

      https://www.cbsnews.com/news/w...

      Potosi, MO isn't even close to what anyone would consider a "ghetto," but without Wal-Mart, the residents are looking at a 40+ mile drive just for daily necessities.

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    11. Re:Wonderful by Maxo-Texas · · Score: 2

      Last time this happened (about 130 years ago), the government had to step in and break up the monopolies in the U.S. Once monopolies grow enough, it becomes impossible to compete and it's a certain lost to invest money trying to compete.

      They are charging $20 for something that costs $3 to make.
      You start selling it for $12, so they start selling it for $2 until you go out of business.
      Then they move the price back up to $20.

      --
      She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    12. Re:Wonderful by Arzaboa · · Score: 1

      Interesting conundrum. Thanks for the link.

    13. Re: Wonderful by senatorpjt · · Score: 1

      Maybe there isn't a void. I've never lived in a "food desert", but I've been poor, and I would never buy produce. It's expensive. It goes bad quickly, so a lot of it just ends up getting thrown out, unless you're making frequent trips to buy them, which is expensive and time consuming not to mention the time-consuming preparation. Every now and then the produce is bad right out of the store and the money was just wasted.

      I've never had a can of Spaghettios go to waste because it was rotten on the inside, or because I was too busy to use it within three days after I bought it.

    14. Re: Wonderful by xxxJonBoyxxx · · Score: 1

      Look up a company called Quik Trip or another named meijers. Both combine gas and food in an attractive retail setting and have found that niche. (Kwik Trip especially in small communities.).

      There will always be brick-and-mortal, otherwise Sears (and its catalog->ship to you model) would have won the race years ago.

    15. Re:Wonderful by Hallux-F-Sinister · · Score: 1

      Sure, but this time it's Amazon doing it to Wal-Mart. All the little fish were eaten long ago. Now the big fish only have each other to feed off of.

      Sure. And there will be absolutely NO collateral damage, because since YOU don't shop anywhere but Amazon or Walmart, that means no one does. No other businesses exist now.

      Or... do they?

      As it happens, there ARE, here and there, other shops, competing with the likes of the megastores, besides other megastores--such as you often seen eeking out an existence in malls and downtown historical districts.

      They're going to get hit in the crossfire. BUT what's worse, is how the customer ultimately gets fucked. They buy things at artificially depressed prices, then when the incentive to depress said prices go away, the prices shoot back up, not just to where they WOULD have been, but due to other factors, often BEYOND where they were. Then people start to get the idea they're being taken advantage of. The manipulation is unhealthy, and is another shining example of the fundamental un-sustainability of not only their business models, but indeed, of the economic and legal frameworks that allow this sort of nonsense.

      --
      Our reign has gone on long enough. Indeed. Summon the meteors.
    16. Re: Wonderful by cayenne8 · · Score: 2

      but I've been poor, and I would never buy produce. It's expensive. It goes bad quickly, so a lot of it just ends up getting thrown out,

      I've been semi-poor...as in college student poor, working, going to school...etc.

      I like to cook and I'm able to....I found that I bought whatever produce was on sale, and would look at the mark down bin for meat.....and I would eat like a king for less money that others were spending for FF.

      Yes, I do eat leftovers, so nothing is wasted....and if there are bits and pieces laying in the fridge, they don't go to waste...that's what jambalaya is for....

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
  2. Wal-Mart is going to lose this fight. by i286NiNJA · · Score: 1

    Did anyone hear that Wal-Mart's tech incubator WalMart Labs is one of the worst places to work. Not surprisingly almost all the engineers feel they're underpaid

    https://www.google.com/search?...
    https://www.inc.com/business-i...

    They're going to lose this one and while I'm not wild about how Amazon has crushed the competition I won't shed a single tear for wally world.

    1. Re:Wal-Mart is going to lose this fight. by Tablizer · · Score: 2

      It's not like Amazon has a workplace reputation for being rainbows and lollipops.

      --
      Table-ized A.I.
    2. Re:Wal-Mart is going to lose this fight. by i286NiNJA · · Score: 2

      Sure. But the compensation package is just good enough to keep people around until they're fully vested and then they take it out the door, it's common to take a long break from work after the end of a stint at AMZN. That's Amazon's formula for keeping top talent around until they're totally burned out and can be replaced with a fresh crop of good engineers to burn.

      You can't pull off that trick with Walmart's attitude towards workers.

    3. Re:Wal-Mart is going to lose this fight. by Tablizer · · Score: 1

      In general, you can pump them empty and run them into the ground if you pay them well. Another tactic is to pay them poorly but make the work-place friendlier. If you filter and prepare hiring correctly, both strategies can work. And there is the in-between. Perhaps Wal-Mart hasn't tuned it right yet. Until management sees their current strategy failing, they won't change.

      --
      Table-ized A.I.
    4. Re:Wal-Mart is going to lose this fight. by i286NiNJA · · Score: 1

      I happen to be a fan of the deluxe workplace/low pay :)

      I mean it's not like low engineer pay isn't well over median household income anyhow (except for Slashdot's pet closet cleaner). Boozy parties once or twice a week. A boss who has nice things to say. One month of vacay a year.

      It's a shame that most Americans will never know what it feels like to live this way.

  3. Can anyone say "monopoly"? by Roger+W+Moore · · Score: 4, Insightful

    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?

    1. Re: Can anyone say "monopoly"? by Anonymous Coward · · Score: 1

      Amazon isn't a monopoly. They aren't even the largest online retailer in most of the countries where they operate.

    2. Re: Can anyone say "monopoly"? by Tablizer · · Score: 2

      It's a near monopoly in the USA. We can expect the same kinds of games and tricks Microsoft pulled, such as taking a loss in Market A to gain market share in Market B to force out competition, forced bundling, ghost product announcements, and other tricks pioneered by the likes of Standard Oil and IBM.

      --
      Table-ized A.I.
    3. Re:Can anyone say "monopoly"? by Gilgaron · · Score: 4, Interesting

      In this instance, though, they're nominally supporting third party vendors that they are just a payment processor and business aggregator for... it'd sort of be like if Walmart backed coupons for other stores in the same strip mall.

    4. Re:Can anyone say "monopoly"? by 140Mandak262Jamuna · · Score: 1
      No it is not a monopolistic behavior. It is the dot com behavior. Use investor cash to sell services/goods below cost. Show growth, show numbers, hope to sell to someone before the scheme comes undone. It is called The Greater Fool Theory. "I know this business model is unsustainable and it is all going to eventually collapse when it runs of fresh investors, but I hope to cash out long before then".

      It is vaguely like a Ponzi scheme, in the sense that fresh investors pay off the older investors. It has had a long run, and has become very large. Amazon could do a lot of damage if/when it runs out fresh money before its competition goes out of business. It is a death match, if Kohl's, Target, Home Depot and Walmart are still alive and Amazon runs out of fresh investors, it would die. If the others die and shrink to dollar general size or 7-11 size Amazon will win. Let us see how it turns out.

      --
      sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    5. Re: Can anyone say "monopoly"? by BradleyUffner · · Score: 1

      It's a near monopoly in the USA. We can expect the same kinds of games and tricks Microsoft pulled, such as taking a loss in Market A to gain market share in Market B to force out competition, forced bundling, ghost product announcements, and other tricks pioneered by the likes of Standard Oil and IBM.

      Not even close. If I want to by something, let's just say a computer mouse, there are literally 20 different physical stores within a 10 minute drive of my house, and I don't live in huge metro area. There are (a quick google search later) hundreds of different online retailers that, do NOT go through Amazon, that I can order from ( https://www.google.com/search?... ).

      Claiming that Amazon is a monopoly is almost laughable.

    6. Re: Can anyone say "monopoly"? by Tablizer · · Score: 1

      Being that brick-and-mortar stores are clearly shrinking, the future growth is clearly on-line. You can order directly from many of the traditional stores, but it's often extra steps to register etc. and you don't know what kind of service you'll get if something goes wrong. Amazon is like McDonald's: (relatively) cheap, predictable, and generally reliable.

      Your defense is comparable to saying Microsoft still had minicomputer OS's as competition in the 1990's (Digital, Wang, Prime, etc.). While technically true, it was moot because minicomputers were dying.

      I suppose we can bicker about what "monopoly" means, but the bottom line is that Amazon is gobbling up on-line retail without any sizable major competition, and local shops are shrinking. Walmart is about their only online threat, and Amazon is trying to Netscape them away.

      --
      Table-ized A.I.
    7. Re:Can anyone say "monopoly"? by Binestar · · Score: 1

      Amazon is profitable. I'm unsure why you're thinking otherwise?

      --
      Do you Gentoo!?
    8. Re:Can anyone say "monopoly"? by 140Mandak262Jamuna · · Score: 1

      Not in its core business. Its cloud is making money, it is under stiff competition. It is using that profit to subsidize the core business. It might work out, or it might not pan out.

      --
      sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    9. Re: Can anyone say "monopoly"? by BradleyUffner · · Score: 1

      Local shops may be shrinking, but I can buy a computer mouse at any 7-11 I stop at to get gas now.

  4. An end run around collecting sales tax by JoeyRox · · Score: 4, Insightful

    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.

    1. Re:An end run around collecting sales tax by JoeyRox · · Score: 1

      But many of the items sold by third-parties are fulfilled by Amazon, ie Amazon carries stock of the item in their warehouses and fulfills the order on behalf of the sellers. Basically you're only buying from the third-party by name rather than in practice.

    2. Re:An end run around collecting sales tax by Waffle+Iron · · Score: 3, Insightful

      In that case, the 3rd-party seller is supposed to collect sales tax for customers any state where Amazon is warehousing their inventory (which could be over 20 states, each usually requiring separate registration and quarterly filing).

      I can imagine that the number of sellers actually 100% compliant with this crazy system is pretty small.

    3. Re:An end run around collecting sales tax by PhrostyMcByte · · Score: 1

      Basically you're only buying from the third-party by name rather than in practice.

      This is a really simplified view, and it's not special to Amazon. Third-party logistics is a huge business. Very few companies do their own warehousing/shipping -- even the large ones. Many 3PLs will also host a web store for you as a value-add.

      Companies do this because it's not their core business. They want to focus on their product/marketing/purchasing/etc. -- the fulfillment of it is an important but small part of their business. And if you're really really small like many of the sellers on Amazon, then you might be even more laser focused and not want to manage your own web store.

    4. Re:An end run around collecting sales tax by Hallux-F-Sinister · · Score: 1

      In that case, the 3rd-party seller is supposed to collect sales tax for customers any state where Amazon is warehousing their inventory (which could be over 20 states, each usually requiring separate registration and quarterly filing).

      I can imagine that the number of sellers actually 100% compliant with this crazy system is pretty small.

      This is just the sort of scandal you'd read about in the Washington Post... if, that is, Amazon founder Jeff Bezos didn't OWN that paper and have a rule against their "journalists" writing a single word that harms their businesses, including any associates, affiliates, etc.

      Didn't we used to have RULES against this kind of bullshit?

      Oh, wait... that's right, the people with MOST of the money BOUGHT the politicians in charge of making rules that were preventing them getting the REST of the money, and now they're well on their way to having it ALL.

      Yep. Great little system. Gonna crash soon, too. It's going to be UGLY, btw. Stock up on ammo, food, water, and oh, POPCORN! :-)

      --
      Our reign has gone on long enough. Indeed. Summon the meteors.
  5. people still buy from Amazon? by Anonymous Coward · · Score: 2, Interesting

    I haven't bought from Amazon in 2 years because they aren't competitive with brick and mortar stores anymore. If I buy online it's through in store pickup at Walmart or best buy. Also, brick and mortar stores will price match Amazon; so.... No need to even buy from them. I don't want to wait days for something.... And, for fast service you want me to pay for prime? Lol nty

  6. Walmart gets Walmarted and I don't like it by RhettLivingston · · Score: 4, Interesting

    In the late 80s - early 90s time frame, Sam's and Pace (owned by KMart) were in competition. There were over a dozen Pace Membership Warehouses in the St. Louis metropolitan area by my recollection. I personally preferred Pace and thus watched what happened with interest.

    Walmart decided they wanted the business. They proceeded to build a Sam's within sight of almost every Pace at great expense because they had to get whatever land was there instead of cherry-picking sites. It was so blatant that you knew what was going on from day one. After doing so, they opened the stores, set the prices below Pace (running them all at a loss), and fairly quickly put the Pace stores out of business. They then built some more new stores in the area with a different distribution so that they could cover the area with fewer stores and closed down almost everything they had built to put Pace out of business. When Pace started talking lawsuit, Walmart purchased the corpses to shut them up.

    In a remarkably short time, we went from a competitive market to a monopoly market.

    I sincerely hope that we're not seeing similar tactics happen here, but now to Walmart. Having Amazon in competition with Walmart helps us. Losing Walmart in that competition would put us right back in the monopoly situation with an even stronger predator.

    1. Re:Walmart gets Walmarted and I don't like it by Gilgaron · · Score: 1

      I don't disagree with your concern, but this action is with third party sellers. It'd not be too hard for them to just use a different online storefront like leaving eBay for Etsy and so on. Amazon only has an advantage so long as their webpage and customer service is the best. Hop on over to Sears.com... the customer service is nearly fawning if you buy something, and pickup at their store when you want something fast is super easy, and they even have some Amazon Primesque service, but that webpage is an abomination and half of the third party stuff must be for money laundering at those prices. It doesn't seem impossible to me that someone else could come along to out-Amazon Amazon with any more difficulty than they did in Sears and (perhaps) Walmart.

    2. Re:Walmart gets Walmarted and I don't like it by Locke2005 · · Score: 1

      Interesting note: Many Lowe's and Home Depot stores are located next door to each other, and those stores to MORE business than the other stores! They become "the place" to buy hard-to-find products because customers know if they can't find it in one, they can check the other. I even sometimes check both before buying to make sure I'm getting the lowest price. In other words, Sam's Club locating next to KMart doesn't necessarily put KMart out of business!

      --
      I've abandoned my search for truth; now I'm just looking for some useful delusions.
    3. Re:Walmart gets Walmarted and I don't like it by avandesande · · Score: 1

      Kind of a false dichotomy... one of the stores I buy from one site thats sells on amazon, ebay and have their own eCommerce website. I would bet having only one storefront is more of the exception to the rule. I usually get free shipping from them on ebay so that's the option I use.

      --
      love is just extroverted narcissism
  7. Amazon Seller Here by Anonymous Coward · · Score: 2, Insightful

    I know they are trying to paint a happy face on this, but over the past year Amazon has instituted a number of seller hostile policies and we are getting pretty sick of it. Most recently - very recently - Amazon instituted an automatic return policy. It used to be that we would get a return request notification with a reason selected and an explanation from the buyer. This allowed me to save many sales or otherwise turn some frowns upside down. A return request was a great way to get a good seller review. Being able to offer customer service on returns also helped reveal scammers. Now if a buyer wants a refund, they just pick an option, usually "bought by mistake" or "did not need" with no written explanation. Still want to contact the buyer? Too late, they already printed out the prepaid return label and it's on its way. The seller pays for the prepaid return label. Have a policy that the cost of the label will be deducted from the return? The buyer can file a claim to dispute that and will usually win. Otherwise you get a nasty review out spite, and there is nothing to do about that either. Need a new guitar for a gig this weekend but you have to pay rent in two weeks? No problem! So we can opt out huh? Yeah, right. This week maybe.

    I would rather not have posted this anon, but Amazon has become so big brother the paranoia is justified.

    1. Re:Amazon Seller Here by northerner · · Score: 1

      The big problem with the Amazon automatic return policy is that Amazon doesn't realize when scammers are returning junk. We use Amazon fulfillment to sell our products, and people have bought a new item and returned an obviously old scratched up used item. Amazon blindly accepts it, refunds the purchase, and puts the junk back into inventory. We don't hear about it until another customer buys the junk item and complains. We then typically apologize to that customer and FedEx them a new one at our expense.

      Amazon should really photograph returned products and notify the seller. The seller can then choose the course of action (refund or not), return to inventory, or scrap the item.

  8. Amazon softening up and losing ground by Anonymous Coward · · Score: 1

    Ever since they switched to Amazon Delivery Service in my area I've switched to other online suppliers, even if they are more expensive and/or charge shipping.

    The Amazon drivers, which are a local sub contractor, have driven over my lawn, lost packages and thrown packages onto my property (drive by delivery). Prior to this on the USPS had been guilty of these same infractions.

    Seems UPS and FedEx have higher performance standards.

  9. Re:Bye Bye Toys-R-Us by Anonymous Coward · · Score: 2, Insightful

    The final nail in the coffin of Toys-R-Us was when they stopped differentiating and just carried the same stuff that everyone else did. They decided to compete only on price, and they should have known they would lose.

    They stopped carrying all the cool toys. That is what killed them.

  10. Uh... by Locke2005 · · Score: 1

    Explain to me how exactly this business model makes a profit for Amazon? Are the discounts subsidized by the $100/year payment for Amazon Prime?

    --
    I've abandoned my search for truth; now I'm just looking for some useful delusions.
    1. Re:Uh... by avandesande · · Score: 1

      They are selling retail at a loss they are using AWS to finance it.

      --
      love is just extroverted narcissism
  11. Amazon's 'marketplace' pushed me to buy on ebay by Fly+Swatter · · Score: 1

    The amazon marketplace has watered down the amazon brand for me. Searching for something is a pain with all the 'sponsored item' placements and third party marketplace results. Even when I find something sold by amazon, you have to check reviews to see if their inventory has been tainted by marketplace knockoffs and factory seconds. I figured if they want to be like ebay, I will use the genuine ebay, at least I know that the questionable item will come direct from the seller, and not accidentally be from some other knockoff seller.

    Yes I can filter results to 'shipped and sold by amazon,' but why bother when it's faster to just start somewhere else.

  12. Bull by Anonymous Coward · · Score: 1

    I just did a "bought by mistake" return to a 3rd-party seller on Friday and when I picked that class of reason for return Amazon made it quite clear that I would have to pay for return shipping because the seller was not at fault. The printed return label was also very clear that *I* would have to pay the postage.

    You sound like someone who is just ticked off that you might have to ever accept a return.

  13. Make money by selling on Amazon! by iTrawl · · Score: 4, Funny

    No, this isn't the usual scheme. Put your stuff for sale on Amazon and buy it back at a discount. Then sell it again and again and again until Amazon stops giving you free money.

    --
    "Everybody's naked underneath" -- The Doctor
  14. Re:Makes a lot of sense, could be anti-competitive by DontBeAMoran · · Score: 1

    Everybody has his/her own reasons to do things. I'm not saying they're right or even justified.

    --
    #DeleteFacebook
  15. Has Amazon ever been cheap? by ffkom · · Score: 1

    The situation might differ according to region, but where I live, Amazon almost never provides the cheapest offer on any product, and this didn't change as long as I know Amazon.

    I do still visit Amazon's web page to lookup customer reviews and alike, which seem to be just more abundant there than elsewhere. Buy buying there? Rather not.

    Just last week, I ordered two items: One printed image calendar and one piece of sport supplies. Both where signicantly cheaper at online shops other than Amazon, the calendar at -20% (including shipping and gift wrapping), the sports supply at about -30%.

    The one category where I find Amazon to be price competitive is with tiny, seldom traded items that one can find to be sold only by either some "Amazon market" partner, or by very specialized shops that just don't sell anything cheaply, even if it's just some special-sized screw.

  16. Re:Ignore the miltitant atheist shooting up a chur by JackieBrown · · Score: 1

    We had an article about the vegas shooting

  17. Amazon's strategy is improper, maybe unlawful? by loslosbaby · · Score: 1

    Its dumping. Its applying 3rd party money (Amazon's) to push a price down to allow a seller or subset of sellers to dominate a market (for an item). Its dumping. Same as solar, same as semiconductors.