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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 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.

8 of 95 comments (clear)

  1. How is this different... by williamyf · · 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 · · 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!!!"

      --
      Taking guns away from the 99% gives the 1% 100% of the power.
    2. Re:How is this different... by Registered+Coward+v2 · · 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 · · 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 serviscope_minor · · 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.
    5. Re:How is this different... by XxtraLarGe · · 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.
    6. Re:How is this different... by epine · · 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.

  2. Amazon Has Clearly Jumped the Shark by organgtool · · 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.