Amazon Watchers Say the Company Has Accelerated Its Efforts To Sell Its Own Products -- and That's Worrying Regulators Around the World (businessinsider.com)

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Amazon Watchers Say the Company Has Accelerated Its Efforts To Sell Its Own Products -- and That's Worrying Regulators Around the World (businessinsider.com)

Posted by ryuzaki0 on Thursday January 10, 2019 @08:40AM from the aggressive-expansion dept.

By selling more products of its own, Amazon is becoming a competitor to the outside manufacturers it hosts on its platform -- and that's worrying regulators around the world. From a report: Governments have rarely tried to rein in Amazon's ambitions, allowing it to avoid most of the recent scrutiny directed at other large tech platforms. But the increased focus on Amazon's house-brand offerings suggests it may now be Amazon's turn. Driving the news: Amazon built a robust business as a participant in its own marketplace when it saw growth stall in stateside e-commerce, which is why holiday shoppers might have seen Amazon-owned brands like Happy Belly for food or Solimo for household goods when they browsed the site last year. It created more "private label" products, from its AmazonBasics line to brands for fashion and furniture, that are in-house versions of things others sell on the site. It struck deals with outside manufacturers to sell their products exclusively. Critics say Amazon uses its sales data to find fruitful areas where it can produce generic versions of already-popular products.

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How is this different... by williamyf · 2019-01-10 08:59 · Score: 4, Insightful

...from house/white brands that you find in supermarkets and stores around the world?
Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"
All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand...
So? what's different in this case?

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1. Re:How is this different... by XxtraLarGe · 2019-01-10 09:07 · Score: 4, Insightful
  
  So? what's different in this case?
  Stop using common sense, regulators need to regulate. The argument you're going to see is "Consumers are too stupid to make their own decisions. What could be worse for consumers than being able to buy a quality Amazon item at a lower price than a brand name item? It's unfair that Amazon can make comparable items at lower prices AND also sell them on their own site! Abusing market position, monopoly power, other scary words to justify our existence!!!"
  
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  Taking guns away from the 99% gives the 1% 100% of the power.
2. Re:How is this different... by Registered+Coward+v2 · 2019-01-10 09:09 · Score: 4, Interesting
  
  ...from house/white brands that you find in supermarkets and stores around the world?
  Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"
  All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand...
  So? what's different in this case?
  It's the depth and breadth of Amazon data that's different. Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly. Finally, they also can look at the consumer buying habits to price discriminate. All of that is not avaiable to those on the marketplace, as far as I know. Sellers could follow Amazon's lead but smaller ones may not be able to match Amazon and stay in business.
  
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  I'm a consultant - I convert gibberish into cash-flow.
3. Re:How is this different... by Actually,+I+do+RTFA · 2019-01-10 09:16 · Score: 4, Informative
  
  There are several differences. One is that foodstuffs are a very branded experience already, in ways many things sold on Amazon are not. Coke vs. Pepsi is a real brand war, and store-brand competes in that space. Or Chlorox wipes vs Lysol wipes vs Winn-Dixie wipes. Many things on Amazon just aren't. So, they'll either totally dominate that market or they'll force tons of advertising by companies building brands there (yay, more advertising!)
  Another is that Amazon's market share is significantly higher than most purveyors of white goods. Changes in scale are changes in substance.
  Yet another is that white labels in stores tend to be evergreen products. Amazon is in a position to move faster on new products with higher R&D costs. That means that smaller companies have less time to recoup their costs, meaning less innovation (assuming that they cannot afford the patent process).
  Lastly, there's visibility. It's far easier to see all the options on a store shelf then in a search result. We all know being the #1 Google result is worth a lot more than being #2, and being on the second page is a huge hit. Amazon is not only selling, but is ordering the search results. Meanwhile, at stores, they tend to put the white label good right next to the brand name good, because they're trying to sell it as an alternative. So, little things like say USB cords, fill with a bunch of Amazon Basics offerings of different sizes before you go to the next page. Meanwhile, in stores, there's say a 10oz box of name brand cereal next to a 10oz box of white label, and then there's the 20oz box of name brand next to the 20oz box of white label.
  
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4. Re:How is this different... by CrimsonAvenger · 2019-01-10 09:18 · Score: 2
  
  Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly.
  And other businesses can't do this? Really? Hint: every business does this to the greatest extent possible. And computers have made "greatest extent possible" a lot broader than 40 years ago. Or made it faster, at least....
  
  --
  
  "I do not agree with what you say, but I will defend to the death your right to say it"
5. Re:How is this different... by tlhIngan · 2019-01-10 09:25 · Score: 2
  
  ...from house/white brands that you find in supermarkets and stores around the world?
  Say, Kirkland cashews and batteries, Win-Dixie bread and cleaning wipes, Kennmore appliances. And many more brands in europe, from retailers as diverse as Carrefour, aldi and "El corte ingles"
  All big retail chains have white/house brands that compete with all the other brands. And all retailers use their retail/POS data to know what items move and which one would benefit them most if they decided to enter with a white brand...
  So? what's different in this case?
  Because it doesn't take much for Amazon to just returning a list of products, to returning a list of products, ordered by Amazon house brands first. Amazon's search results are like Google's - being on the first page matters, a lot. So if Amazon is giving preferential treatment to Amazon's own house brands (and there are a lot of them, AmazonBasics is just a small player) it may not be giving a fair shot to competitors.
  And people may buy from those brands, not knowing that the results of the first page actually are all Amazon-owned brands.
  Google was fined for doing this - putting their own services higher in the search results.
6. Re:How is this different... by Registered+Coward+v2 · 2019-01-10 09:33 · Score: 2
  
  Not only does it have sales data it can parse to determone what to sell it also can get a pretty good idea of price is for the item as well as the demand easticity to set price to get the most profit. They also know what others charge and sales numbers and can move their prices accordingly.
  And other businesses can't do this? Really? Hint: every business does this to the greatest extent possible. And computers have made "greatest extent possible" a lot broader than 40 years ago. Or made it faster, at least....
  As I said, it's the scope and breadth of the data they have that makes them different. It spans product lines, regions, geographies, customer demographics, etc. they have far more information than most businesses. I agree most do that but Amazon's scope and reach is much larger. Walmart may come close but it is primarily US Centric and doesn't have nearly the customer specific data of Amazon. For example, if you start shipping to a new address and stop at the old Amazon can surmise you've probably moved. If you start shipping to a second address, it might be a friend or family member that moved but still uses your prime account. If you ship somewhat often and the zip code has a university and Amazon has shipped to similar street addresses before they can surmise you are at university; and verify that with purchases such as textbook rentals. Sign up for Amazon Student and you've told them you are student. Most other businesses don't have that data available.
  
  --
  I'm a consultant - I convert gibberish into cash-flow.
7. Re:How is this different... by serviscope_minor · 2019-01-10 09:42 · Score: 3, Informative
  
  Stop using common sense
  Well clearly you're following you'e own advice.
  Abusing market position, monopoly power, other scary words to justify our existence!!!
  Yes that is a thing. And it's bad and histoy is replete with examples. Amazon has well over a 90% share in some sectors. What's reasonable for most companies is not reasonable for a company with a 90% market share.
  Except instead of using common sense you're just "hurr derrr gubbmint is teh evul!!11!11oneelevenONE11!11"
  plonker.
  
  --
  SJW n. One who posts facts.
8. Re:How is this different... by XxtraLarGe · 2019-01-10 09:52 · Score: 3, Insightful
  
  Yes that is a thing. And it's bad and histoy is replete with examples. Amazon has well over a 90% share in some sectors. What's reasonable for most companies is not reasonable for a company with a 90% market share.
  How about an 89% share? An 88% share? An 87% share? At what level is it reasonable, and how exactly do you determine that?
  
  Except instead of using common sense you're just "hurr derrr gubbmint is teh evul!!11!11oneelevenONE11!11"
  Common sense is allowing consenting adults to make their own decisions. Without interference from an obtrusive third party. Yes, that is a thing. And it's bad and history is replete with examples.
  
  --
  Taking guns away from the 99% gives the 1% 100% of the power.
9. Re:How is this different... by epine · 2019-01-10 09:58 · Score: 4, Informative
  
  Hint: every business does this to the greatest extent possible.
  And that's exactly why regulation exists: because business finds itself congenitally incapable of standing down before it crosses over some critical line that actually holds the system together.
  Just imagine if the banks had said to themselves, "you know, 0% down and picture of the person's dog isn't actually a viable credit check" before melting down the global economy in 2008. We wouldn't have had the meltdown, no-one would be talking about "too big to fail", and none of the terrible new regulations would have been required in the first place. But they can't and they didn't.
  Before that we got the Sarbanes–Oxley Act entirely from Enron, thank you very much. Greatest extent possible, thy name was Enron.
  And then we got Bernie Madoff because people somehow convinced the government that the regulations we actually had were too onerous to fully enforce, so when they got the letter "hey, the consistency of this guy's portfolio is mathematically improbable to an extreme level" (complete with twenty pages of detailed calculations) they did nothing much to investigate.
  The sad, appalling truth is that the root cause of regulation is failure to regulate, because there's always some goddamn megalith that takes the "greatest extent possible" to its logical, local conclusion — which turns out to be its concomitant global demise.
  Amazon is a corporation in the sumo sasquatch weight division. Once Amazon fully activates "maximum extent possible" in its business methods, it's going to leave a giant crater that was formerly a competitive, consumer economy. Jeff Bezos is widely regarded as an alpha-male apex predator, as thoroughly documented in The Everything Store: Jeff Bezos and the Age of Amazon (2013) to name just one.
  Behold the Apex Predator: "The Everything Store: Jeff Bezos and the Age of Amazon" Review — 12 November 2013
  
  In the book — and I don't mean this as a criticism — Bezos comes off as the lead character in an Ayn Rand novel: a real world John Galt or Hank Rearden, with an e-commerce twist.
  Correct me if I'm wrong, but I think the book is out that Rand rarely portrayed innate forbearance.
10. Re:How is this different... by known_coward_69 · 2019-01-10 10:00 · Score: 2
  
  every store charges manufacturers for the best floor space. been this way for decades. especially the displays by the check out lines
11. Re:How is this different... by serviscope_minor · 2019-01-10 10:02 · Score: 2, Informative
  
  How about an 89% share? An 88% share? An 87% share? At what level is it reasonable,
  What are you 12 or something? Have you really only just discovered that there can an entire continuum between something OK and something not OK? Clearly though you haven't realised that just because thee are unclear cases does not mean that some cases are not clear.
  and how exactly do you determine that?
  A court. That is literally their job.
  Seriously? How do you not know that?
  Common sense is allowing consenting adults to make their own decisions.
  No it's not common sense to allow absolutely anything provided some people agree. That's not how any legal system works for entirely good reasons.
  
  --
  SJW n. One who posts facts.
12. Re:How is this different... by Obfuscant · 2019-01-10 12:04 · Score: 2
  
  Just imagine if the banks had said to themselves, "you know, 0% down and picture of the person's dog isn't actually a viable credit check"
  
  Then the Justice Department would have started investigating them for violations of civil rights and the CRA, because doing a real credit check discriminates against poor people. They would have had groups like ACORN and PUSH breathing down their necks for racism. Barney Frank and Chris Dodd would have gotten up on the floor of Congress and started ranting about the awful rich bastards who run the banks keeping their jackboots on the necks of the poor and keeping them from achieving the American dream of home ownership. And we know that would have happened because it did.
  
  and none of the terrible new regulations would have been required in the first place.
  
  Son, it was the terrible new regulations trying to force equality of results onto a system that had real, valid, serious reasons to discriminate against poor people that caused the problem, not a lack of regulation. When the regulations say you must have equal percentages of approved loans in every demographic and zip code you serve, you either make no loans and go out of business, or you make bad loans to keep the feds off your back.
  
  The sad, appalling truth is that the root cause of regulation is failure to regulate,
  No, the sad appalling truth is that in many cases, the root cause of regulation is because someone in power doesn't think the current situation is "fair", even if there are perfect reasons for it being the way it is. "I'm sorry, you have no income and three kids, have lived in the rental you have for a very short time, and no savings. You can't have a loan for a house" is very unfair, isn't it? Or "you could afford a $100,000 house, but you are asking for a loan on a $250,000 house, which we cannot approve" is really unfair. Turns out the regulations that solved that unfairness created a great deal of unfairness for the rest of us.
Amazon Has Clearly Jumped the Shark by organgtool · 2019-01-10 09:02 · Score: 4, Insightful

Just search for "pillows" on Amazon and here is what you will see: full-page section of sponsored ads, large section of "Top Rated from Our Brands", two results from your actual search, large section of "Expert Recommendations", one result from your actual search, large section of "Amazon's Choice", and finally the bulk of your actual fucking search results. Google became the most popular search engine because they provided a clean and consistent interface that kept all of the ads clearly separated from the content. Amazon, on the other hand, can't seem to pack enough ads onto their site which makes it more difficult for you to do what you came to do which is pay them money to buy shit (not look at ads). Of course, this doesn't matter because they're so big that no one can possibly compete with them on the combination of price and shipping speed, so everyone will likely continue to put up with their shit despite how terrible they've gotten. My only form of reasonable protest is refusing to buy any products that show up in the ads, no matter how good its reviews are.
Yes it has by CQDX · 2019-01-10 09:22 · Score: 2

I have a prime account that I use (or used to use) frequently.
When I know exactly what I want I often have a annoying time finding because what I'm looking for gets push behind the sponsored and recommended products. Essentially I have to "search" my search results to find the exact item. Since I've paid their membership, I feel I am entitled to an ad free UI. I know brick and mortar stores often move their stock around to force you to wander the aisle, hoping you'll buy additional products that you didn't plan too. I know that Amazon is doing the same thing by polluting the search results. But instead of getting me to buy more stuff it's actually encouraging me to look for alternative shopping portals.
My prime renewal is next month. I have no compelling reason to renew.
Re:How is that different? by greenwow · 2019-01-10 10:45 · Score: 2

Grocery stores don't hide name-brand items on the shelf behind their own.
If nothing else concerns regulators about Amazon by mysidia · 2019-01-10 18:40 · Score: 2

This should not "bother" regulators..... This is equivalent to what many large retailers do: even Walmart has their own "generic" brand of product.
This is providing a generic unbranded version against higher price named brand products. Sure it is competition against the name brand, but it is also an option that is friendly to customers' wallets ---- the public is better WITH this type of competition than not having this type of competition.
Competition is a good thing. What should bother regulators is not introducing and marketing their own alternatives, but complete exclusion.
For example: You can no longer purchase a Google Home from Amazon's store. Even if you explicitly search for the product -- it is simply no longer listed for sale, nor will they stock their store with it, nor fulfill, nor offer a sale.
The product is in high demand, but is excluded from being stocked and offered, solely because Amazon has their own horse in the game and wants retail customers to Not buy into Google's smart speaker platform.
That's not competition in Amazon's store though; thats excluding the competition from accessing Amazon's retail customers for no good reason other than they're competition.
Tell the regulators to worry about that --- Amazon marketing PREMIUM products and excluding competitors from being sold in their store; not "Generics" competition like AmazonBasics AA Batteries, and such.
Re:If nothing else concerns regulators about Amazo by DethLok · 2019-01-10 20:11 · Score: 2

"You can no longer purchase a Google Home from Amazon's store."
I'm fairly sure you can't buy a new Dodge, Honda, VW or Ford from a Chevrolet dealership, nor go to MacDonalds and ask for a Whopper and expect to get one.
Excluding the competition from accessing your customers - in your own store - is quite standard, I understand?
Re:If nothing else concerns regulators about Amazo by mysidia · 2019-01-10 21:05 · Score: 2

I'm fairly sure you can't buy a new Dodge, Honda, VW or Ford from a Chevrolet dealership
Amazon is not a manufacturer's car dealership franchise.
nor go to MacDonalds and ask for a Whopper and expect to get one.
Amazon is not a restaurant that sells food they prepare.
Excluding the competition from accessing your customers - in your own store - is quite standard, I understand?
Not for general retailers it is not. Amazon has made their business as a general retailer,
and in that regard they have captured 49.9% of online retail sales in the US --- that percentage is not a complete monopoly, but it is close.
Amazon's exclusion of products from the store solely because Amazon has made a competing product and wishes to discourage purchases or make it hard for customers to purchase a competing product could be construed as Unfair Competition in several states, and possible violations of the Sherman Antitrust act.