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.

Comments

Wonderful

[hackertourist]

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

Can anyone say "monopoly"?

[Roger W Moore]

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?

Re:Can anyone say "monopoly"?

[Gilgaron]

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.

An end run around collecting sales tax

[JoeyRox]

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.

Walmart gets Walmarted and I don't like it

[RhettLivingston]

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.

Make money by selling on Amazon!

[iTrawl]

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.