Originally published at: https://boingboing.net/2018/11/16/trade-war-antitrust.html
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So sort of like how every supermarket, Target, WalMart, pharmacy etc. with a house brand does it.
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Well, of course the EU doesn’t like the public harm antitrust standard. When an entire region cannot manage to foster a single viable competitor to any of the new American tech behemoths, one must fashion rules to slap them down.
When you dance with the devil in the pale moon light, don’t presume you will change the devil - the devil will change you.
Honestly, the only real way to make sustainable profit on Amazon is to have a branded, premium product that you are the sole supplier of, and with your own demand. (And is exceptionally hard to counterfeit because Amazon doesn’t seem to care at all about counterfeit anything…)
Everything else is commodity chasing, and if you have something now, you best be chasing next as hard as you can… because your position is as fleeting as your profits.
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It’s pretty much Trader Joe’s entire business model…
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Difference being most real-world retailers do tend to still display the brands alongside own-brands. Amazon’s venue makes it easier to ‘lose sight of’ the brands and only ‘see’ the own-brands, given the huge price differences.
@Avery_Thorn’s middle paragraph seems to be fairly succinctly on the nail for anyone needing a reasonable profit margin. Differentiation is the only long-term viable strategy now, there can only be ONE lowest price competitor in any market segment (Porter?) and it’s going to be Amazon.
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I personally have not experienced this. Yes, Amazon Basics items in electronics are often displayed prominently, as an example. But I have not seen these (or “Amazon Recommends”) options actually crowd out alternatives.
I agree - it is not a complete ‘physical’ crowding out - yet. But when prices are skimmed, the eyes settle on the cheapest very quickly and anyone not in or near that ball park tends not to get looked at. (Hence the inverted commas around ‘see’ and ‘lose sight of’ - they are perfectly visible but the viewer tends to notice them less, perhaps.)
It is technically ‘pricing out’ of the market rather than ‘crowding out’ so you are correct, but online it can, I feel, more easily become ‘crowding out of the market’ because of how online (and Amazon especially) operates. In a store, brands often pay for shelf space so brands and own-brands are side-by-side and the retailer still makes a good margin on the brands. Online, does Amazon make a good enough margin from brands to incentivise it to sell/promote them? Can it make the same margin (and volume) from own-brands? Too many questions, but I fear the direction of travel may reduce variety and choice in the marketplace, at the end of the day when low-cost ‘brands’ can no longer compete.
ETA thinking about it, the sponsored search results/adverts on Amazon are the equivalent of paying for shelf space.
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Let’s not even discuss how terrible Amazon’s search engine is; frequently the search gets spammed by ‘sponsored’ products and ‘we thought you might like this’ to the point of completely obscuring your original objective. I was trying to buy the most recent book by a particular author, but it was more than halfway down the first page of search results, despite searching for that author and ‘Publication date: most recent’.
eta: Amazon is not the only online sales giant guilty of this; ebay’s Cortana is just as horrible.
well, no, because Trader Joes is not selling the competing products.
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