The one thing that isn't mentioned in this story is Amazon opening up the Chinese marketplace. My sales have been down 30% since I've seen overseas competition flood in my product category. And they are selling counterfeit items. I have been reporting 18 sellers in China for over a year selling NFL merchandise that they barley conceal what the product is. Products are listed in NFL colors with names like D. bronco, c.bear, c.brown, s.seahawk, etc. - 31 nfl teams. And they only show the back of the jersey where you can customize with your name and number. I finally noticed a customer posting images of the finished products. New england Patriots jersey - with Nike, NFL and patriots logos and even hang tags. The jersey costs $149.95 at nfl shops but these sellers are selling them for $39.90. Amazon did take that listing down but it took a year - and then it's a whack-a-mole game - one goes down, 5 more pop up. I can't compete with that. And since they have such low manufacturing costs in China, they top dollar for ads. These companies have bad reviews for a product and then they remove it and replace it with another ASIN. Amazon has also been taking down listings because image quality - I have had to redo 1000's of images just days before cyber monday because they change the requirements. I've been playing that game for a year now.
252
Wow. Like Trump. Unpredictable and demands one-way loyalty.
157
Ugh, I just ordered from Amazon this week. I am going to do my best to make sure it's the last time.
97
It's worth pointing out that before SEO, when you searched for something specific like "replacement bulb, red 2.5v, mini-lights" you actually found what you wanted -- little packages of those replacement bulbs to replace the burnt out bulbs in mini-light strings. Now, of the first 100 pages on google, you get SEO results from places charging outlandish prices, so you have to wade through the entire dysfunctional mess of online advertising and marketing dysfunction just to buy $5 worth of seasonal replacement lights.
Immersion in this cesspool of greed and dysfunction has made me stop buying stuff, period. I borrow books from the library. I walk to the hardware store -- yes, I live in the city, that makes it easier.
The contours of industrial decline match what happened when fertilizers and herbicides were introduced into farming. Corn yields per acre tripled, but farmers spent all their extra income on fertilizer and herbicides (like Atrazine). Consumers got cheaper corn-based stuff, but the farmers (equivalent here to Amazon Sellers) got squeezed. The fertilizer, herbicide and seller's marketeers knew exactly how to manipulate the long term dependency of farmers on them their advantage. They did this exactly as Amazon is doing, through a morass of regulations and rules, penalties and procedures, stated and secretive, in order to extract profit from the producers.
This profit extraction is called "making money," but really it's just shifting wealth to the rich.
196
I have been selling via and consulting for 20 years. You cannot expect to be a serious eCommerce player in the US and ignore Amazon, but Amazon still only makes up 10% of the worlds' Internet users. Sellers themselves deserve some of the blame here for allowing themselves to get leveraged against by Amazon because they do not know a thing about marketing and for many years didn't need to. Amazon is a very effective sales channel, but still one of many.
If this was 1955, Jeff Bezos would be a Joe McCarthy victim and a public enemy due to the money funneled from the US into the Chinese economy every single day made possible by Amazon. Amazon cannot address the counterfeit problem or safety problems with the products on its' site because it would hurt its own products and make them look bad. Jeff Bezos is brilliant and a propagandist mastermind. The responses from Amazon here and Jeff Wilke's response to the Senators can be said to be a word game filled with propaganda and fluff.
Amazon stopped being buyer-centric years ago and clearly demonstrates that every day. The lack of consistent enforcement of its own standards has allowed sellers to join and within weeks or months have thousands of reviews when the historical #'s point to a 50ish review per year standard. They cannot defend the indefensible! Buyer trust in reviews has fallen to below 20% due to selective enforcement They themselves are just as guilty. Bezos has to step aside to restore trust.
57
I sell millions of dollars on Amazon every year. Yes, Amazon has squeezed profit margins, especially with ads becoming more competitive. Yes, Amazon will randomly take down your product, no matter how highly it is reviewed, for seemingly no reason at all. Yes, Amazon will take down products, and losing the buy box is virtually the same thing as a product being taken down as pointed out in this article, that are sold elsewhere (that sellers have no control over pricing in many cases). I could go on. What this article fails to delve into is that many, if not most of these problems are caused by Chinese sellers. China has a different culture and environment that does not see a moral problem with buying a competitive product to complain about a safety concern, or paying people to buy their products and write positive reviews (or worse, paying people to buy their competitors products to write negative ones). Chinese sellers almost all photoshop other people's content instead of paying to create their own. Amazon's dirty little secret is that 40% of sellers are Chinese Manufacturers selling directly to the american consumer. These sellers have no qualms about selling products that ignore relevant laws and lying, cheating, and stealing to bring down their competition. Amazon will tell you how hard they are fighting counterfeiting, but these efforts are a side show for the real crimes that Amazon does nothing to prevent. Why? All for the cause of selling at the lowest price.
343
Can there be any real doubt that Amazon is too big and too powerful to be a force for good? It must be broken up, or reined in by regulation or statute. Otherwise it will strangle all competitors--even, by this account, possibly WalMart and eBay. What then?
75
Amazon is a monopoly that must be broken up they have too much power. As a manufacturer that sells on amazon prime, I can confirm that Amazon controls the price not us since we are not allowed to charge more for faster delivery. Additionally, when they see a good selling product they like, they will copy it as they have done to us. They are necessary but I would drop them in a heartbeat if we could. The next phase will be that we have to use their shipping and not competitors. Buy from the manufacturer and stay away from Amazon. They are killing small business.
117
Amazon will push until it is reigned in. Their managers face constant pressure to increase sales and profits. Bezos should tread carefully - what goes up will come back down. When was the last time you ordered from the Sears catalog? It used to dominate the space, but is now only the answer to a trivia question.
34
I'm fed up with Amazon. I am fine with paying a little more, buying a little less, waiting longer for on-line purchases to arrive, and taking the time visit and support local businesses who are my neighbors. I won't be shopping at Whole Foods anymore because Amazon never has enough market capture. Saving money on some purchases isn't always a savings when you look at the big picture.
106
My mail-order company has used the Amazon Marketplace for years to keep our name in the public eye. We do not pay for advertisements, we do not reprice to get "buy buttons" or use their warehouse services. The reason for that is that they already squeeze us for fees and monthly payments that make selling on Amazon and incredibly anemic experience.
As an example, we have a product we buy for $69, but are forced to resell on Amazon for the low markup of $89 because of competition and Amazon's own pricing. When we sell that item, we pay about 14% of the sale to Amazon fees, and their shipping allotment just barely covers the actual cost of shipping and packaging, let alone staff to package the item. On top of that we pay an arbitrary $39.99 each month to be "pro" sellers. Our profit for each $89 item is about $6, or a 9% margin. How any business with staff can survive on that kind of margin is anyone's guess.
Fortunately we sell in two other marketplaces that are much more fair and represent most of the profit we make. I have a bitter disrespect for Amazon and generally feel that they are the perfect embodiment of a megalithic corporation that exists solely for greedy profit and cares not who it steps on to make that profit.
121
For me, like millions of people around the world, Amazon is a blessing. Especially for those living in small countries like mine where the market isn't big enough to be interesting for some brands or for people who is interested in music/books/movies that are not popular or even known in our countries. I buy something today, pay the cheapest shipping rate (there's no free shipping for us) and the product is in my hands in 7 to 10 days.
It used to be cheaper to buy books on Amazon than here in Chile even considering shipping. But with the Kindle Amazon took that to a whole new level. Now it's not only way cheaper but also I get my book immediately. I love it.
16
The product graph says it all. We have become The United States of Amazon. And we did it to ourselves. We can undo it.
57
I've been an Amazon Marketplace seller for 20 years. At first, it was the answer to a prayer and Bezos was my hero. Not any more. For small ticket items and small sellers it's not unusual for Amazon to take more than 50% of the total. If I sell a book for $6 and I fulfill the order, Amazon takes $4.29 in fees. If Amazon fulfills the order, of course, there's an additional fee. The feedback system is essentially irrevocable. Only the customer can remove it. If the customer happens to be stone cold crazy or attempting to commit fraud, it doesn't matter. Appeals to "Seller Help" are virtually useless. One bad rating, no matter how baseless, can have a devastating effect on a small seller primarily because of ratios and how they're calculated and presented. I guess there's no such thing as a billionaire who doesn't want another billion and Bezos turned out to be no exception. It seems like they all choose to squeeze the little guy. There must be an Honor Among Thieves Rule at work. The rich don't steal from the rich.
80
I really try to buy at stores other than Amazon, but the web sites for most of other online stores are terrible. Search results are not accurate, its even hard to find the lowest price, reconditioned is mixed in with new, shipping costs are high, shipping times are slow, etc. I am making more of an effort to shop elsewhere and am willing to pay a small premium, but its not easy.
24
I only use Amazon as a last resort. The problem is that as more and more brick and mortar stores disappear, shopping online is the only thing taking up the slack.
While Jeff Bezos has created a very lucrative monster, we, as a society, have allowed him to bully smaller businesses and dodge some local city and state taxes to further fatten his bottom line.
He's only as powerful as we allow him to be. His business practices are under scrutiny, as they should be.
49
Pushing/squeezing producers is good for consumers--up to a point. It's the Walmart model. But the giant retailers can push too hard--recall the American Rubbermaid story.
Apparently Walmart pushed them into near oblivion--stocking shelves with cheaper lower quality products--produced who knows where.
But given the reality of internet shopping, global shopping is quick and easy. Producers better realize that.
5
Today I am going out to buy a book that retails for $64. I will go to a local bookstore and order it through them.
I'm sure I would pay a lot less by going through Amazon, but I support independent businesses, will go out of my way to do so.
When Amazon controls all retail—and stores everywhere close, throwing thousands of people out of work—then they can charge whatever they want.
54
The premium and fees that amazon charges is directly proportional to ecommerce leadership and warehousing value.
Go to any mall and you will see similar fee and rent disparities, depedent on foot traffic. A stall on a pop-up holiday market at union sq runs 15-40k for the holiday month. This is not news to any standard shopper or business.
if you want a turnkey fulfilment / marketing ecommerce partner, Amazon puts your product in front of 100M prime subscribers with disposable income.
Its a good time to be a fast follower and be a solid #2 in ecommerce. Walmart is trying, are their terms and fees much better than amazon?
5
@William Costco is another Retailer / Eretailier that puts customers first and also has more exclusive membership. How well does Costco treat it's small and large business suppliers.
8
I moved to buying most things from Amazon gradually. When I couldn't find a product I had bought before on supermarket shelves, I usually found it on Amazon, stayed there, and service has been great. Now I find the same thing happening on Amazon. A few things I bought aren't available any more, and I need to google them. Get them elsewhere, but hate spreading my credit card info across many sites. It is a conundrum, but now I know why!
6
Lack of diligent enforcement of anti-trust has been cited by many as to why, in part, investment, innovation and productivity have been lagging. We see it in oligopolies such as airlines, social media, etc., and in internet based retail. Amazon’s retail operation should stand on its own and divorced from its other operations including its cloud services business. The key is a level playing field to foster effective competition.
17
As a frequent customer, I really like Amazon. Don't like some of their tactics with their suppliers, though. Amazon, like most companies will fail at some point. In the mean time, I'll keep taking advantage of their pricing, shipping, and variety of products.
8
Amazon is only one manifestation of the sickness and predation of of late capitalism. Why should one company control almost the entire retail sector of our economy?
This company and others must be broken up in order to create a fairer playing field for everyone; this is supposed to be the basis of capitalism.
27
@Bevan Davies The key phrase here is "supposed to be."
6
Certain things they - Amazon - does, which many knee-jerkers, such as this paper do, I agree with them. After all, if they found sellers weren't making any money, they - Amazon - would be losing, as well.
I think it's more a question of how MUCH they make, rather than that they turn a profit.
I was - and still am - against, when Amazon wanted to open a second 'kingdom', here in NYC, and I was very happy they pulled out. Unlike the whiners, I know if the damage they've inflicted upon friends and it's citizens in the places they've 'deemed worthy' (I.e., repeatedly hiring/during people so they can't collect benefits, etc).
2
A hundred years ago it was Sears, Roebuck. Fifty years ago, it was Walmart. Today's it's Amazon. Who will it be next? Perhaps Amazon in outer space.
7
That hacks it for me! I am aghast that Amazon is playing "keep away" from antitrust laws.
So glad my family's little business died 25 years ago when Mom passed. If we'd gotten into Amazon's clutches . . .
Thanks for this heads-up. It's time to level the playing field.
Get that bully out of the marketing playground!
Keep up the good work!
16
My wife loves Amazon Prime. She buys only products sold by Amazon.com. She never has a problem. It's a great consumer site. Jeff Bezos has made her life easier.
6
This just points to the simple fact that Amazon doesn't make one single thing that is sold on their web-site. Well...okay...their e-reader and a couple of other trinkets, but that's about it.
Amazon is simply a mall; a digital extravaganza that American's now use and visit the way they used to visit brick and mortars variants. Only they are a mall on steroids.
And just like anyone who abuses such substances they now abuse the power of their privileged position. Would a bricks and mortars mall owner force its tenants to sell only thru them? Of course not.
The same rule needs to be mandated, forced even, upon this behemoth. Stop being greedy Amazon, and play fair. Hey Bezo's...in case you read this. You've created a great system. No question about it. In the marketplace of ideas yours has proven immensely popular. But for all that here's what I'm asking; play fair.
Oh...and since we're talking can we talk about your business models back end? All the detritus; the boxes, the packing material and such. Can we discuss some sort of viable recycling system to add to your model? Trust me on this; one is needed because the tax payers are footing that portion of the model's cost and the landfills? They're filling up, which indicates that the current model sits on a non-sustainable base.
John~
American Net'Zen
32
I use Amazon because it is convenient. I would gladly suffer some inconvenience to have them brought to account. They should be broken up; They are a monster who is calling the shots.
194
@SMB the change starts with you - stop using Amazon.
44
I can find almost anything I want on eBay. I might have to wait a bit longer for delivery, but that slight inconvenience is far outweighed by the fact that it allows me to support individual sellers and small businesses while spurning Amazon.
19
I have love/hate with Amazon.
I buy a lot of stuff from them that I would go to Target type places for. The fact is every time I got to Target, WalMart, Best Buy, it is just so time consuming. The parking lot is stressful, the stores are stressful, stuff rings up wrong, the lines to check out are long, then getting out of the parking lot is stressful.
The fact that I can go online, type in "phone charger", "shampoo", "contact lens solution", hit a button and have it in a few days is so easy. What would take me 2 hours to do, now takes me less than a minute.
It's not like we are all buying from the friendly local business. Amazon is replacing WalMart etc who is known for also pushing suppliers on low prices.
10
@MC target, wal Mary, And best but all offer this same service and often for a lower price. They also still employ your neighbors. Walmart will bring your order to your car in the parking lot within hours. target will go one step further and bring it to your house.
7
@MC Why not shop om Target/WalMart/BestBuy's web sites? So many people seem to think it's just Amazon vs crowded malls, when the fact is that most businesses these days, both large and small, have their own web stores. I take advantage of these, and more and more, I also check out the manufacturer's own site to see if I can purchase directly from them.
16
I no longer shop at Amazon. With the recent spate of stories about how they treat their workers, and now their independent suppliers, I cannot justify supporting this service. I now buy locally as much as possible.
28
I agree. I hardly buy anything from Amazon. The company needs to be broken up.
17
Just think how Amazon's (and WalMart's, et.al.) unfettered capitalism would work wonders on our overpriced health care system.
7
The leviathan just keeps controlling more competitors in online retailing and leveraging that dominant market power via its growing fleet of currently 50 767 Boeing jet aircraft and 30,000 white vans to start displacing competitors in the home delivery business. It may be to customer benefit in the short-term but the arbitrary nature of its business style suggests that may not last. Therefore Congress needs to thoroughly investigate to what degree Amazon's impact on competition in different industries is in the longterm public interest.
16
“Amazon punishes the businesses if their items are available for even a penny less elsewhere.”
Yet I always check prices at (at least) one other reputable site, often the brand or US distributor, and often find lower prices. One example is coffee filters which I never buy on Amazon anymore.
6
Amazon is a complete disaster both for the planet and local businesses. It destroys more jobs than it creates.
25
Note to sellers: Get off Amazon and go to EBAY or go independent. Amazon is using you to create their monopoly. There are buyers who will not support the Amazon monopoly. We will check Amazon's products and prices for comparison, but will not buy on Amazon, even if it is slightly cheaper.
23
Believe me, Walmart, Target and even Macy’s squeeze their Vendors on price and competitors. Amazon has taken it to the next level.
Additionally, Amazon’s breath of assortment, sharp pricing and speedy delivery make it hard to shop other Retailers.
Maybe we the consumers should give up day instant gratification and support our neighborhood Retailers.
15
@HPS at least the retailers you name continue to employ your neighbors. Amazon does not. Target and Best Buy in particular have long provided reasonable jobs for a sector of the working population, and Best Buy promotes from within and does minimal outsourcing. They might not be as good as shopping at a locally owned business, but they’re better than amazon.
8
Capitalism is quick--unfettered, very quick, unfettered with new infotech tools, instantaneous.
Regulation lags. It's always been a matter of time, but now harm accelerates in no time at all.
9
Amazon needs to be broken up. It has exactly the unfair market advantage that the antitrust laws were written to correct.
19
That's why I gave up Prime and buying on Amazon. I don't want one person to control everything I can buy and if we only buy from Amazon, then it will be the only place you can buy anything and prices will soar.
9
Amazon has become a service akin to a utility. However, instead of a single product, like with a utility, Amazon supplies a plethora of products in much the same way.
1
I first want to recommend that everyone read the indispensable book "People's Repubic of Walmart" about Walmart and Amazon and how most of our economy today is in fact planned, on a scale the Soviets could only dream of, and how today's technology makes Hayek's old objections to planning obsolete.
The solution to the political power of these firms seems obvious: we need a law that provides suppliers with voting shares proportional to their contribution to the sales of goods and services t hrough Amazon, Walmart, etc. So if I sell $1,000 worth of goods on Amazon, I am immediately credited with that value of voting shares. Along with voting shares for Amazon and Walmart employees, we convert these vast monopolies that use their INTERNAL market as a means to exploit small business and labor, into republics governed and owned by their suppliers and workers, into mere distribution mechanisms for the goods produced all over the world by nearly everyone.
9
What? 27 cents on every dollar? That's a big chuck of change. Plus, in the case of Tumi, Amazon said their prices were too high when using another avenue? So, the answer is Tumi should make less money, according to Amazon. Maybe Amazon should make less money. How does that feel, Amazon?
15
@ggallo I’m a seller, and our net is roughly 50% of gross. I honestly have no idea why. The rules change all the time, listings get shut down for no reason or a totally wrong reason.. it’s exhausting...
6
@ggallo I'm also a seller, and my net is about 60%, which is better than any other arrangement I can make at this point. And I use amazon's fulfillment services, so that's part of my costs.
If I ran my own brick-and-mortar, I'd retain less of the sale when my inventory costs and other overhead expenses are figured in.
If I sold to a local retailer, they would effectively take 50% of the sale (retailers generally double what they pay a wholesaler--due to those same inventory/overhead costs already mentioned). And if I jacked up the wholesale price, I'd run the risk of the product not selling at all.
If I sell through my local consignment shop, I retain 40% of a sale. My only other option is a local gallery show, held annually, where I retain 60% of a sale, but I do more work on merchandising (which is something the retailer would do if I went that route), and once a year isn't enough.
My own website generates zero traffic; even if I spent big dough building it up, it would never approach the exposure amazon offers.
As soon as ebay or Etsy or any other online retailer offers fulfillment services and allows me to retain 60% of a sale, I'll be happy to sell through them. BTW: scuttlebutt is that ebay is working on its own fulfillment services, and I think that makes sense: amazon innovates, others copy; competition restored.
4
I order few things online but I've never been forced to use Amazon.
We the people create private sector monsters like Amazon by falling for the immediate gratification of lighting speed delivery and cheap prices.
You don't like the power Amazon has? Then don't buy anything from them.
Life will go on, just try it.
26
I do buy books on Amazon, because otherwise I couldn't afford to buy all the books I want/need. But I try to avoid using them for other stuff. (And I do shop with Barnes & Noble when I can, even though the customer experience is less seamless). I know from people who are sellers that they (Amazon) constantly squeeze sellers by raising fees, etc. The company has too much power and probably needs to be either broken up or reigned in some other way.
4
@Jon Harrison Try looking for your used books on Alibris, Biblio, or even ebay. I usually end up paying less than Amazon is charging when I shop on these other sites. For new books, I enjoy the membership benefits and coupons of Barnes & Noble, well worth the 25 bucks/year.
5
@Jon Harrison
You might also consider Powell's books here in Portland; New, used, frequent online sales, reasonably good shipping rates. They realize who they are competing with and do it well.
10
Excellent article. I think it would be valuable to compare Amazon’s methods to Walmart, Home Depot and other big box sellers. I suspect they’re not that different. My biggest gripe with Amazon is that they shouldn’t be selling their own products against they’re partners. They should step away from that and run their marketplace without that conflict.
One reason I buy from Amazon is that their payment process is easy. I don’t like the idea of entering my personal and payment information all over the internet. Too many possibilities of theft.
Interestingly, I just bought a jacket from a major outdoor retailer. The same item was on Amazon at the same price, but I wanted the product reviews from the retailer’s site. It took them 10 days to get me the same product it would have taken Amazon to get me in 2. It’s hard to compete with an operation that does an excellent job with logistics
6
Four days of lost business was a loss of “at least $100,000”? The idea that a company doing that volume can so easily get jerked around by Amazon is remarkable. And Amazon gets $.27 on the dollar. Yowza.
I’ve had some terrible experiences buying from third-part sellers (I guess I have been buying from more third-party sellers than I was aware of, but I’m talking about obvious ones). I’ve received poorly repackaged things that were obviously bought in bulk and relabeled (mosaic tiles, for example). I once purchased bath soap and received several loose bars from a bulk package, each in its individual cardboard box marked “not for individual sale.” That’s not legal. I’ve received toiletries with beat-up packaging (I saw the recent report on dumpster diving Amazon sellers...eek). I’ve always received a refund from Amazon when something was unsatisfactory — and I will post a negative review when one is called for — but I’ve also had sellers hound me with harassing emails. Amazon may exert a worrisome level of control over seller pricing and listings, but when it comes to quality control and seller behavior toward customers, it seems Amazon is reactive rather than proactive. That is not putting the customer first. Customers should not be Amazon’s quality and customer service control cops.
7
There is only one entity that can take down Amazon's monopoly. And it's the EU Commission's DG of Competition.
9
My last 2 employers sold on Amazon. If I had to describe them as a "partner", my best summation would be that of a "bully." You need to respond to their "red flags" immediately and can be locked out of the platform for the smallest infraction. The larger the profit you're making for Amazon, the less they are concerned about your slipping through some "gray market" goods.
In addition, I used to be a part of their Amazon Vine program, where they would send me products for me to provide a review. (while qualifying that in the review). About a year ago they booted me from the program without explanation and removed ALL of my reviews (over 1,000 and 10 yrs of work) those reviews included mostly items I had purchased with my own funds. Until logistic delivery systems "catch up" for other retailers. (apps, faster delivery, drone delivery, etc.) customers will have fewer options. Most of those systems, Amazon is also trying to dominate. (w/ AWS (Amazon web services), their own truck fleet, warehouse dist centers, and grocery deliv thru its' acquisition of Whole Foods. Because they received a tax break for so long, across multiple state lines, they have so much money in their coffers that SHOULD be returned to the govt/people, but is now locked up and only distributed on their "benevolence" .
13
I cancelled my subscription to the Washington Post, which I really didn't want to do, but Bezos is just too much.
7
Power corrupts.
6
Is this any different from what Walmart has been doing for years?
7
@Tim Rutledge Yes, it is Walmart on steroids. Amazon does not market from stores, Uber does not own cars, AirBNB has no buildings. It has changed the model for retail, and it really seemed to creep up on us then WOW!
8
I watch as my neighbors' front porches fill up everyday with cardboard boxes marked with that annoying Amazon arrow. Especially during the Christmas season, Americans seem to have forgotten that there was ever an alternative to Amazon. I watch the drivers make their deliveries and notice their harried, stressed faces as they run from truck to front door step. And I think about the warehouse workers who are pressured to meet their quota of selecting products from bins -- and who are fired if they fail to measure up. Now I learn from the Times that the sellers are pinched and pressured by this behemoth company that pays no taxes. When will Americans realize they can simply go online to the manufacturer or seller and skip the middleman -- Amazon? Boycott Amazon!
28
Thank you for this article. Amazon is a monster running wild, drooling with power. It abuses everyone who tries to sell with them, leaves all of them in utter fear, has no face - nobody to talk to - when things go wrong. They are intentionally opaque, leaving sellers completely blind as to why they are taking their actions, and all of their support is outsourced to other parts of the world. Companies selling millions of dollars on Amazon per year will end up suspended or shut down completely with barely an explanation, leaving sudden necessary mass-firings in their wake. They are not a partner to anyone - they are a pig in lipstick - and it's about time the North American consumer realized it.
19
I tried to avoid amazon by buying from Jet.com but product after product sold on Jet was defective.
I tried buying ebooks from Barnes&Noble, but BN stopped supporting the software to let me read them on my laptop, and before that its download process failed and the customer service people were baffled.
I would love to take my business elsewhere and still try to do that.
3
Borrow your ebooks from the library for free. Everything but the most obscure stuff you can find elsewhere.
5
Watching Thursday's Democratic debate and more than one candidate mentioned that Amazon pays no federal taxes. Does anyone have information about this? Had no idea it was a church of consumerism...
11
In the era before the supermarkets, small grocers were able to make a decent living. But when a supermarket (e.g., A & P) moved into an area, they were able to wipe out most of the small grocers. Once the competition was gone, the supermarket raised its prices. The same happened with the Trusts (the early monopolies). At first they lowered prices, but after the bulk of competition was removed, up went the prices. The ultimate driving force in all businesses, especially the very large one which are dependent on investors far removed from the humans who are part of the business itself or of the competition (and hence less likely to be concerned for their welfare) is that bottom line---the return on their investment.
7
The Chinese company Alibaba, offer just the transaction platform T-mall, to all seller and buyer. Seller can have their own inventory warehouse, and choose the appropriate carrier to deliver their goods. I think that is more fair than Amazon.
4
@JR, but how much power does the consumer have when things go wrong with the transaction? The one thing that keeps me buying from Amazon is their “A to Z guarantee.”. If something doesn’t arrive, arrives damaged, is not as described, or is otherwise unsatisfactory, I know I can get a refund or replacement easily. If the 3rd party seller doesn’t take care of it promptly when a i contact him or her, I go directly to Amazon customer service and get my refund. It’s very efficient.
3
@Passion for Peaches , I ordered leather belts on Aliexpress. When I got plastic belts instead, Aliexpress first asked me to prove it. They were not convinced until I sent them a video of the belt melting under heat. Then they refunded just half of the cost because "the item still has some value even if it is not completely as described". It was the last time I ordered there.
7
Sorry, but Amazon has low prices and quick delivery. If certain businesses can't compete, then someone else will fill the void.
2
No void but the gaping chasm of mindless consumerism and hypercapitalism.
8
Amazon is a plague to it many who sell on it. I rent a warehouse in an industrial park. 2 former "neighbors" used to sell on Amazon, and they are both out of business (there is another that I know if still in business). I spoke to one of them who had been selling on Amazon for 4 years,and seemed to move a lot of product, and he told me, that he just could not make money after there fees.
When I asked why he didn't figure that out earlier, the reply was because they hit you in so many different ways, ,that it can take a while until you realize you are actually losing money.
Think about this, the rule of thumb for third party sellers, is that to be profitable on Amazon, you need to purchase an item for 1/3 of the price it will sell for. Amazon is taking massive fees, and unlike other retailers, they have ZERO inventory cost, and ZERO risk. It is the small business owner who is taking all the risk, and Amazon can destroy (and has destroyed) them at any time, with a rule change, or a fake complaint by a competitor.
Amazon has truly become the evil Empire.
46
@MidwestJoe
My husband and I have started buying locally or from other sellers as much as we can recently. Even at the cost of paying more for the product. We are highly uncomfortable as consumers with the dependence we had come to have on amazon...we do not feel it is healthy for us and the businesses to be so dependent on amazon. For a few years we found that we were routing most of our online purchasing via amazon. We are trying to curtail that now.
20
You can also go find the product in Amazon and then go and order it from the manufacturer's site. Even if it is slightly more expensive there. Window-shopping in reverse...
41
As a bookkeeper, I've had two clients using Amazon as a selling platform. One client on average gave up 35% to Amazon in fees. The other had fees hit 65% in some months.
There is no way to stay in business paying those rates!
36
Stop buying Amazon if possible. Giving up Prime has been better for my wallet and my waistline. Sure the local stores charge more, but brick-and-mortar stores are how communities Thrive and grow. The old adage my salary is your salary and your salary is my salary is a real thing that we have forgotten in our quest for ease & instant gratification. Prime really isn't such a great bargain when you consider having to buy a minimum amount to get free shipping. It's a system that influences people to buy more than what they actually need and engage in unnecessary consumption. Even at a higher price, the money I spend in my local community for the most part stays in my local community. And I get more exercise at the same time while also not contributing to more environmental waste. Win, win, win!
Also, consider that the quest for cheaper prices is a part of that continuous devaluation of time and labor. So many people complain that they're overworked and underpaid while at the same time participating in a consumer process based on underpaying others in order to reap the highest profits. Consumers are workers too. And we have to make a choice and take a stand no matter how small or limited the impact while we still have a choice.
44
Interesting. I just made a purchase of a small electronic item. I first went on Amazon, and the search was all over the place, couldn't find what I wanted. Then I went to Best Buy online, The first item on the list was exactly what I wanted and the price was excellent! I can pick it up tomorrow at my local Best Buy store. I needed it right away. I also tried OfficeMax, search results were better than Amazon but the price was not as good.
I think Amazon has changed some things for the worse that are key in continuing to be successful. As I wrote earlier the search function is number one problem. The confusing, and often fake reviews are the number two problem.
Years ago I sold a bunch of books on Amazon after I finished a degree program. It was easy I made a decent amount of money on the textbooks. I recently tried to sign up to sell a few more books. Too many hoops to jump through and I never got through the process. Luckily these were just things I needed to get rid of, not the source of my income. They'll go to charity.
16
I had an excellent experience with Best Buy just now too. Delivery in two days. NOT AMAZON—YAY!!!
6
No more Amazon for me. Amazon is only as powerful as their number of customers—buyers and sellers. The same goes for Facebook and all the rest. I want to go off grid as much as possible while I still have time to enjoy life unburdened by round the clock corporate surveillance.
17
Amazon gives customers a stunning array of choices at fair prices with exceptional convenience. That is the core essence of their success. They are not monopolistic, they just do it better than anyone else. Should their delivery on this proposition falter, others will step up and take their place. That’s capitalism. Sears was one as much of a powerhouse as Amazon. Enough said.
8
And we are all free to buy where we chose, if we don’t like amazon it’s wonderful to have choices. And choices are the mark of a healthy economy.
6
@Jeanine The point is that Amazon is making it harder and harder to have choices. They're regulating what stores we see and thus controlling what we buy, not to mention forcing smaller players out of business all together so that there is no "local" place to go to as an alternative. That bit in the article about Plugable is awful- no negative reviews, his business shut down, and Amazon's model conveniently pops in to "fill the gap?" That's not healthy at all.
15
What Amazon is doing is no different than what Walmart does to the companies that wish to sell their products in their stores. Walmart especially in their grocery department have squeezed some companies to produce certain sizes of a particular product and sell that product in their stores below cost. A refusal to do so will lead to removal of all items from that producer from Walmart.
The best example of Walmart squeezing a company was Vlasic Pickle Company which was forced by Walmart to produce a gallon jug of pickles for sale in their store for below $3 per jar. Vlasic made one cent off each jar.
9
@Rufus T. Firefly Not the same at all. Wal-Mart buys and pays for inventory. Wall Mart does not charge their buyers storage fees, Wall Mart does not charge them a separate return fee if they decide too cancel the sale of the item. Wall Mart does not go behind the back of the product owner to the manufacturer in China, and offer them fulfillment in the U.S. cutting out the original seller.
5
I live in Seattle, and the Amazon culture has changed the city in a bad way.
38
I started selling used books on Amazon in 2015. There's demand for books and they sell well. But I get almost nothing out it because Amazon takes >50%, including from shipping & handling fees. Sometimes I had to pay out of pocket for shipping it. So I stopped my nascent business and got myself out of it while I still have the inventory.
36
Amazon collects 27 cents of each dollar customers spend buying things its merchants sell.
HOW CAN THAT BE? They still make a profit, and prices are competitive? Sounds impossible.
4
@Mike Many categories Amazon's fees are 15%. Some higher. If it's an Amazon FBA item, Amazon is also collecting fulfillment fees, storage fees and more in addition to the category fee.
Nothing in this article is remotely surprising to a longtime Amazon seller. It's actually a bit tame.
Amazon's retail power is massive and not a good thing.
21
@Mike Very often, Amazon is not the cheapest. Amaon also highlights the cheapest 3rd party seller for a particular item, so if one seller has a liquidation problem, he will drop his price and sell at cost, or even a loss, that price will become the featured price on Amazon. A week later, his competitor has a cash squeeze, so he has to drop his price as well, then he becomes the featured price.
Amazon is a parasite to it's3rd party sellers, using profits and data gleaned from them to eventually put them out of business
7
Amazon is a great shopping place for customers, however to protect competition and a free market there is a need for regulations. I think when Amazon is both a market platform and a producer to that platform ,that’s a problem. For instance the Plugable product that is pushed out and instead an Amazon product is advertised instead, that is such a clear unethical violation, you really have to be a genius not to see it.
33
@Martin Galster Not only that, but Amazon takes the sales data from the 3rd party seller, and uses that data to decide to compete with them and eventually put them out of business.
India recently passed regulations that forced Amazon to separate it's own retail business from it's 3rd party platform. that needs to be done in the U.S. as well
33
Amazon is to products what VRBO is to vacation rentals by owners: Increasingly intrusive, controlling and expensive and they change their terms without warning.
17
I self published my book at Amazon - so I am type of a seller on Amazons platform. I made the mistake of having Amazon provide me an ISBN number; in return I cannot sell my book anywhere else.
I have to say though that the publishing tools that Amazon offered like designing your book cover, on demand printing were very good. I pretty much published my book for free.
Looking back though, I wish I was able to sell through other channels and had bought my own ISBN.
I think Amazon will hit the same fate as Apple: at some point when it struggles for growth as it inevitably will, its size likely will not be an asset but an hindrance.
Already, my Prime orders have started to get goofed up.
Just today I returned a mini elliptical I ordered, but had to be on the phone with an Amazon customer service rep (from Philippines I think) for almost an hour over two separate calls.
17
@Vsh Saxena, I have never had to settle anything with Amazon by phone. I use Chat and email. They generally discourage phone calls.
1
I have vowed not to support Amazon. Last week I wanted something not available in my area. Found six options online. Five of them required purchase through Amazon. I picked the sixth, which had no mention of Amazon. My package arrived yesterday ... in an Amazon box. I am more worried than ever.
74
I never have bought anything on line from Amazon. Not even when it was just a small on-line bookseller. Which later on led me personally to really not fully embrace high technology. There have been a few things from high tech that have been good for society but I am slowly spending less time and getting more and more off the online grid. I am a much happier person for it.
18
I used to scoff at my fellow New Yorkers buying from Amazon when we have so many local stores in walking distance.
But as I get busier at work I find I have less time to wait in line for 20 mins at Duane Reade, to be waited on by some hostile cashier, then lug my purchases...which are often a compromise and not even the brands I was looking for...back home to my apt.
The other day I had to look for an employee to open the locked case so I could buy.... a toothbrush.
Ridiculous.
I still wrestle with supporting them, but Amazon is just a major time saver, and many brick & mortar stores in this town are an agony.
33
Same as Walmart, who drove many US manufacturers out of business because they couldn’t sustain the impossibly slim margins that Walmart demanded of them.
All so Bezos can be the richest man in the world.
33
Bernie Thompson, at the end of this article, says “We are dealing with a partner, who can and will disrupt us for unpredictable reasons at any time.”
Actually the reason is very predictable: greed.
50
I have refused to give Bezos one cent and would never ever choose his platform to sell anything on.
18
I care about my local economy but shop on Amazon.
I care about the environment but drive an SUV that gets 18 mpg.
What?
10
We sell through Amazon. Not only do they take a disproportionate cut of the sale - more than any other retailer we work with - but they are constantly returning items to us as unsold, while ordering the exact same items at the exact same time.
Call their customer service line, and a nice man in India will tell you that “it’s the algorithm, we have no control over it”.
My intent is to stop selling through Amazon completely. They represent such a small portion of our sales that the juice is not worth the squeeze.
59
@Jonas Kaye
I am not going to buy anything on Amazon till they fix this.
8
Good article. Please do a similar report on Costco. I’m a big fan and also love their travel services. I trust Costco, Amazon not so much.
25
Amazon is clearly a monopoly, and many of the practices it uses to preserve and enhance its monopoly power certainly seem to flout the law. For example, tying two services together is often an antitrust violation.
Amazon does have certain rights and obligations; if products are unsafe, counterfeit, have failed to pass regulatory requirements, or are falsely advertised Amazon needs to take them off its virtual shelves. But there's no reason why it shouldn't be obligated to maintain records and justifications for such actions.
The government truly needs to monitor, and when appropriate, prosecute Amazon. Given its size, battalion of lawyers, and market clout, few if any private companies (even large ones) are able to take on the behemoth.
One hopes our regulators have the wherewithal to do their jobs and keep Amazon in check. The company has done consumers a great service, but they still must play by the rules. Competition is a good thing.
9
While this article is on how Amazon treats its third party vendors, there is also a problem with Amazon allowing such vendors to make unsubstantiated claims about their products. On 8/23, The Wall Street Journal had a multi-page article on how vendors are able to make phony claims about their products. The article was titled "Amazon Has Ceded Control of Its Site. The Result: Thousands of Banned, Unsafe or Mislabeled Products: Just like tech companies that have struggled to tackle misinformation on their platforms, Amazon has proven unable or unwilling to effectively police third-party sellers on its site”.
The article said that many third-party sellers were getting away with making claims that their products had been approved by various federal agencies when, in fact, they had not been. It told of a woman who had purchased a motorcycle helmet for her son from a third party site on Amazon. The site said the helmet met federal safety standards even though she learned it did not when her son died in a motorcycle accident.
The article also said that customers should not assume that a product which has been labeled "Amazon Choice” has been tested for quality. Amazon does not test third-party products for potential problems like lead paint. The “Amazon Choice” label just refers to the product’s price and availability.
33
I almost never buy from Amazon.Once a year or less. Fortunately I live in a city that has two book stores and just a few miles south is a big mall with an Apple Store, Macy's etc. and across the street is Barnes and Noble. I get to look at the merchandise and judge its quality and I get it the SAME day. We also have four hardware stores, Bed , Bath and Beyond, TJ Maxs, Burlington etc. Don't need to shop on line because fortunately I like going out in the city, even when it is 10 degrees as it was today. Healthy exercise.
20
I haven’t bought at Amazon in a while but this week I needed some items before my last minute holiday travels. I could not find some items even in the manufacturer’s sites! And when I did, they would take over a week to deliver. I had no choice but to order these on Amazon.
After reading the responses here on how they stifle vendors, I almost feel like cancelling or returning everything. No matter what, I will make effort to boycott them. Sadly that means means paying more, waiting more, and not being certain about returns.
So other businesses, even smaller ones, have to find a way to offer products in a convenient way for consumers. Millennials and Z-gen won’t tolerate businesses that don’t modernize.
14
I still do not understand the need to order through Amazon. Almost everything I need is available locally. If not, I can order online ditectly through the manufacturer/seller. Cut Amazon out.
20
I just don't care about any of these whines and complaints about Amazon. As a consumer, I love everything about them!
7
Including all the plastic included with their packaging?
6
@Lisa
I confess that we order a lot of stuff from Amazon (more so ever since I had emergency hip replacement surgery) - and our biggest complaint is that the packaging has really deteriorated (and I don't mean that literally); more and more items have *no* protection whatsoever and consequently we've received an increasing amount of damaged items.
5
@Susan L., the most egregious (lack of) packaging is for books. Amazon began as a reliable book business, and now when they ship books they just throw them into a box or padded envelope. They arrive all dented and damaged most of the time. Bezos should remember what books did for him.
2
If one let these corporations, Amazon, Facebook and GOOGLE, continue on their path, robot and AI will make most of the population unemployable. There is a talk about Universal Basic Income from these same people and revenue for this income will be generated by taxing robots productivity.
In other words, robots output will be taxed, so from this tax revenue unemployed humans can receive Universal Basic Income (i.e. welfare checks) that they can use to purchase same products that were created by these robots. Enriching the rich ever more.
Not a exciting world to live in. This is where Capitalism is heading towards. We should all pause and think this through. It is of paramount urgency that people should start to embrace decentralization and the technology that makes it possible BLOCKCHAIN.
11
17 yrs ago we sold used books on amazon. It was fun and great way to supplement our low paying nonprofit jobs. We finally quit two yrs ago. the changes by amazon made it almost impossible for a small time second hand book seller to make any profit. We went from $20000 in gross sales to about $4000. They really no longer cared about those who were their original merchants.
59
@Ellen I had a 100% rating some years ago when I sold books. Didn't use it for some period of time, and Amazon closed it. So when I wanted to sell a few more books I tried to open a new account it was ridiculously complex. No more selling on Amazon for me.
6
@Ellen so true! :( They want you to use their warehouse and prime shipping and if you don’t do that they don’t care about you.
2
Someone needs to go back and look at WalMart and how it was pilloried for putting mom and pop stores out of business. They put pressure on global companies to reduce their prices on consumer items by a small-percentage every year, and it has worked well, despite criticism of WalMart that I agree with.
This is business in America, and we will not change or improve it by attacking one very efficient and brilliant company that has brought America so much ... and it is a public company, as opposed to a company owned by one family - the Waltons.
We should be very careful about how we whip up resentments against Amazon, and be focused on applying these criticisms fairly and across the board and solving them without just whipping one company as a scape-goat.
2
@Bruce Walmart is a public company.
7
@Bruce You make some good points, but they've really gone downhill. They need to make some changes or I'm going to stop buying from them and cancel my prime membership. Maybe articles like this will have an effect.
3
@Bruce It is very different than Wal_Mart. Wal Mart actually paid for their inventory. If you were a seller to WalMart you could figure out you P/L and work with it and the huge volume of sales would often compensate for the slimmer margins
Amazon is quite different. They don't buy from the 3rd party sellers, they just offer fulfillment and storage (at a steep price). They can, and have closed sellers accounts, or dis-allowed them from selling certain products after the seller already bought the inventory and had it sitting in Amazon warehouses, then charge them a fee to have the items returned to them.
Some of Amazon's business practices are just plain evil
5
I have been an Amazon customer since 2004. Recently, I have come to the realization that my indiscriminate shopping there is not only hurting my bottomline but also aiding and abetting Amazon's unscrupulous business practices on many many fronts.
Therefore I have decided to pull the plug on my Amazon Prime membrership and the streaming music subscription. From now on, I will only buy things on Amazon that are not available anywhere else and I will wait for the regular non-prime shipping delivery. Hopefully, I will be able to stop shopping entirely on Amazon and support my local businesses.
36
Why wait. Just stop today. You’ll survive
19
Amazon needs to be on top of these sellers. I've had a new, expensive receiver sold to me without a warranty, a gray market item. I';ve had a used computer sold to me as new. I've had a 500 gb drive sold to me as 1 tb.
6
My company has sold on Amazon for years. We also sell on eBay and have our own retail sites. Much of this article rings true. Which is why I rarely shop on Amazon.
But I do question the description of how the Buy Button disappears if somebody else is offering a lower price elsewhere.
Amazon's "Buy Box" model pits sellers of the same item against one another for that primary buy button on the product page. Supposedly, who gets that coveted spot is determined not only by price, but also by other factors, which might include things like seller feedback. Ultimately, it probably comes down to which sellers customers seem to prefer. For customers, price is often the deciding factor.
It is important to understand that you can buy from any of the sellers, even if they don't have the "Buy Box" or the main buy button. But you do have to look closely for the options from other sellers. It is important to look at their feedback too.
What Amazon has done is upend the old model of retailing. In the old days, if I made a widget, I could make money by selling my widget to a bunch of different stores around the country. Or by selling to wholesalers who then sold to different stores. Now, if I sell a widget to wholesalers or to stores, any one of them -- or all of them -- could start selling my item on Amazon. Now, if I want to sell on Amazon, I'm competing with my customers who are selling on Amazon. And my customers are competing with each other. Everybody loses, except Amazon.
33
@Dan Frazier
It sort of sounds like you want to have your cake and eat it too. You seem to be saying you want to be a wholesaler and at the same time compete with your middle men in retail. This seems no more different on Amazon now than at any other time in history, except that now it’s more apparent what you are doing because there is one big marketplace.
1
@Dan Frazier without the Buy Box no one finds you. And price doesn’t matter. Product sold nearly 12 years. Buy Box now goes to a used product five times or more the cost!
3
This series would be more persuasive if the Times did not ignore the practices of Target and Walmart. When did anti-union, employee-abusing and mom and pop store killing Walmart become above criticism?
11
@DSM14 I am sure there have been investigative stories about those retailers too. But this particular story isn't about them.
9
I've consulted a client who grew their business significantly with Amazon starting from Seller Central and their FBA program to becoming a Vendor Central supplier who does everything from Direct Import to Private Label with Amazon.
But it's always been an uphill battle for them. Amazon frequently takes major decisions without notifying partners till the last minute, if at all. They'll close fulfillment methods(like "In-Network" where products are shipped bulk to an Amazon warehouse) without even a warning.
Selling with them also has challenges like product data in the catalog disappearing and support suggesting the data was never provided, even though opening the product would be impossible without that data. Listings will sometimes be ridiculously priced above market, with little recourse except to wait.
And worst of all, Amazon will expect POs to be accepted but if an overstock occurs, they expect the vendor to deal with it, even threatening to return the surplus stock and charge the vendor for shipping.
And don't get me started on their evangelical reliance on their "computer" even in categories they clearly have little market knowledge of. I've seen their bot suggest absurd costs to keep a listing open(like asking for $0.50 for an item where even cost of materials to produce it cost more) and no options because the algoritihm is an executive level matter that account managers can't help with it.
Amazon doesn't have equal business partners. It has assets to milk dry.
23
@Brian Please tell your former client to send their story to the FTC in detail: [email protected]
13
@Sunflower Thank you for the suggestion. I fully intend to inform them about giving a detailed submission to the FTC because not only was what I'd witnessed ridiculous, it's actually gotten worse.
6
I do not have a prime membership - in fact, I go out of my way to never purchase anything from Amazon. Only once - when I could not find the item anyplace else, did I buy from Amazon. The business model is a mockery of capitalism. If small business is important to you, you will stop incentivizing Amazon to squeeze the life out of small businesses.
30
@Mary Ann ... the only time I used Amazon was years ago to buy used CD's for $1.99 PLUS $5.99 shipping. I did that for about ten times. I now go to thrift stores and Goodwill and get them for 50 cents and a $1.00-each. Or listen free on You-Tube.
6
I am a former Amazon Marketplace seller. Not mentioned in this otherwise excellent article is Amazon’s annoying habit of holding its third-party sellers to higher standards than it holds itself, particularly with respect to meeting shipping deadlines. Even if you met a shipping deadline and you have common carrier proof that you met the deadline, if the customer files a false complaint to get free products, the seller is SOL because Amazon does not stand behind its sellers. However, Amazon does nothing if it fails to meet its own shipping date obligations to its customers. I ultimately shut down the business rather than deal with Amazon’s lack of support for sellers and their unreasonable fees.
63
Quitting Prime is not an answer. Stopping a megalomaniacal company with laws is.
Amazon creates nothing. Makes nothing. Counterfeits are illegal and proliferating on the site. It needs to be split up.
What happens when you invent nothing? You dumb down the whole. It's a Monarchy - and very soon - you end up punished by the king.
21
@ndv
they make plenty
"Amazon Basics "
big deal $
1
@ndv Quitting Prime IS an answer. Not the whole answer, but who wants to keep feeding a monster?
Amazon is like a very rich uncle.
Do as he says, all the time, and the money flows,
upset him and it stops.
I don't think Standard Oil and Rockefeller
were as bad as Amazon and Bezos.
Pluagable should consider changing its name
to Plug-in-able.
8
I’ll usually find a product on amazon then look up the seller’s website and buy directly. I don’t care if it costs a little more. No, I don’t want to be a prime member.
51
Same here. I try my best not to purchase off of Amazon. Probably costs we a few hundred Ezra a year.
11
I use amazon as a guide then purchase the item directly from the manufactures site. Amazon is a great search tool and that’s free.
15
Most Americans are familiar with the term monopoly. Far fewer with the term monopsony. In the latter a market is dominated by a few or only one buyer. Historically companies that fit this description were Sears Roebuck and Company, and more recently, Walmart and these cases are well know to business school graduates. In essence these company’s so dominated or continue to dominate in the case of Walmart the channels to the end consumer that companies wanting to reach end consumers must go through them or risk catastrophic loss of market share.
Now comes Amazon. It has become so dominate in the business to business (b to b) and business to consumer (b to c) sale of product that Amazon is in a position to dictate terms to those wishing to sell into the market at large.
The point is that monopoly and monopsony are two sides to the same coin and both pose a treat to free markets.
16
Living outside of an unincorporated town means I have to drive an hour in good weather to shop at a sub-par rural Walmart. Shopping on Amazon allows me to pay reasonable prices for everyday items and acquire more esoteric items without leaving my home office. I was a city girl before returning home to run the ranch. I became accustomed to quality stuff & my little luxuries. I like variety and convenience, and I get both from Amazon.
I comparison shop the web but find shipping costs usually offset any savings I would get from non-Amazon sources. Sellers have a choice in listing on Amazon. If they left and reduced the variety of goods offered, I would consider shopping other sources.
Prime often doesn’t deliver on it’s shipping promises but I can’t get worked up over getting my coffee beans in three vs two days. Yes, rural America relies on taxpayers to subsidize USPS delivery. In return we provide you steaks, sweet strawberries & your morning cereal. You’re welcome.
14
@CJ
Save those who work on the farms and ranches,
what other work opportunities are there where you live ?
Shopping on Amazon, as dutifully, as you do,
destroys any and all who do not own farms or ranches.
You are creating your own isolation and desolation.
16
With a dispersed population of 450 there are very few employment options. Most businesses are service based - car mechanic, plumber, self storage business, tree trimmer. The coop employs a few people, as does the school system. There’s a restaurant (now Mexican) that changes hands every few years. With such a tiny market to serve, no retailer can possibly sell enough to cover overhead. There is nothing to destroy because no retail can exist here.
We grow huge gardens in summer & live off our dried & canned food in winter. Greens grow in an aquaponic system. We harvest chickens and a cow to fill several chest freezers. We have food & the basics for everyday living. Amazon is where the “nice to have” higher quality items often come from. Arctic gloves, boot dryer, Vitamix, a showerhead, etc. Even if a retailer would serve the whole county, it could not stock the correct mix and quality of merchandise for these once every 10 year purchases. We also order on Amazon when we need a few items and it isn’t worth a “town trip” - coffee filters, printer ink. Amazon is a great source for curry powder, Shea butter, fresh roasted coffee beans and life’s little luxuries that New Yorkers buy in specialty shops a few blocks from home. If small town retailers existed I would certainly try to support them, but it isn’t happening here.
10
I've noticed that the care in shipping slipped with Amazon. When I bought books in the past, the books were set on a piece of cardboard and shrink-wrapped. They arrived in good condition. Later, Amazon just threw the books in loose in a box. They arrived with the corners bashed in. I don't want to give a book as a gift with the corners bashed in. I ordered some books from Barnes and Noble and they were tightly packed in cardboard arrived in good condition.
Amazon doesn't care about packaging anymore.
70
@Linda Totally agree. I ordered the same book three times, and every time it arrived loose in an oversized box with its corners bashed. I stopped ordering the book. Amazon doesn't care.
22
@Linda
Similar experience here. Twice this semester I ordered a brand-new textbook on Amazon. Both times the book arrived with a torn cover. These are very expensive books--nearly $200 each--and they looked like used books upon arrival.
17
@Linda
I've bought a humongous number of books from Amazon during the past 20 years and they've all been art & photography (meaning, heavy and big). During the past few years - on a steadily increasing basis - the packaging has become increasingly-worse until it's now usually *non-existent*. Consequently, I've received more and more badly-damaged books. I buy new books because I *want* new books and I don't want to keep (badly)-damaged books, therefore I've wasted more and more time contending with Amazon's often-unconcerned employees (re: getting replacements sent).
I realize I could go to a bookstore and pay full price - but then I couldn't afford to buy nearly as many books....
7
Monopoly, Amazon.
It’s not a board game.
10
I wanted to buy a pink, rolled leather, dog collar...typed it into Google and up came Amazon....also, the actual manufacturer of the collar. The actual manufacturer was less expensive including shipping. Here it came...one week. It is perfect, made in Ukraine with a nice personal note. Stay off Amazon...it is killing businesses, especially the ones your friends own and where your kids work.
40
I have a kindle as my “pad.” I do not read books on it. I read the Washington post which I enjoy. I used to read the NYT on it —as more convenient than my home computer and easier to read than on my phone. They recently stopped supporting the app so now I have to go through google to get to it. Layout is now unpleasant; comments disappear; it’s hard to post comments. That is not only monopolistic of Amazon, it’s downright evil. Bezos needs to be reined in.
13
I used to be a software engineer at Amazon about a decade ago, and this was all part of their not so secret master plan back then. The thinking was, Amazon cannot make every sale on the Internet, but they should try as hard as possible to at least participate in every sale. This is why they let others sell on their site, and offer to warehouse, and fulfill orders for other sellers.
I eventually left the comoany (a difficult decision that turned out to be the right call) for reasons explained in another infamous Times article that came out a few years ago (basically, as the South Park ski instructor explains, "your gonna have a bad time"). Since then, I have been doing a good job avoiding shopping on Amazon, and it really isn't as hard as it sounds.
There are plenty of retailers out there who are simply trying to make a living selling products that they know, not take over the world. You can discover these shops via shopping comparison sites.
Amazon's master plan is that you go straight to Amazon and never bother to compare. This is also the reason they started Prime: once you are a member, you are psychologically locked in. You fall prey to the sunk cost fallacy, and you think, "well, I am already paying for shipping at Amazon; if I go elsewhere, there's no way I will be able to save on shipping, so I won't even bother to look".
How can all this be stopped? Hard to say. Much of it is simply due to habit. Indeed, it is hard to argue that the master plan has not worked out.
122
@Daniel Wong
Yes, the master plan has worked out well. By that, I mean that their virtuous cycle is indeed virtuous. Given that Amazon’s growth story is a customer driven flywheel, it’s no surprise that we are here today talking about how so many sellers have become so dependent on Amazon’s third party marketplace. At the same time, it’s been an incredible vehicle for entrepreneurs to leverage in their own growth story.
While this article does a good job of highlighting some of the struggles third-party merchants have on Amazon, it does a relatively poor job of explaining why Amazon “squeezes” merchants. In almost all cases, the motive is to deliver the best experience possible to customers. Still, as Jeff Wilke said it, Amazon needs to be forgiving and make as few mistakes as possible for its sellers. Amazon should consider adding “Seller Obsession” as a tenant.
5
This is how every Business operates. This Holiday season I have spent approximately $ 2000 on personal purchases and gifts. The approximate I have spent on various retailers is Walmart 40%, Costco 30%, Burlington Coat 10%, Ebay 10%, Marshalls 5%, Amazon 5%. To me Amazon does not have competitive prices on brand name products. Most of the good brands are out of stock in popular sizes or colors. The returns are not easy to make on Amazon because for each return you have to repack the product and drive to the post office and then check online if they gave you back the money. I don't subscribe to Prime because my purchases from Amazon do not justify the price. Amazon may squeeze the small businesses by continually changing the terms and the small businesses fool Amazon by posting fake reviews. I don't trust a single review on Amazon. Amazon is failing in brand name products and quality businesses. You cannot run a business on just dog toys and usb chargers, ultimately another channel will open up and take away all those. I bought 3 Kindles a couple of years ago and the quality was so bad, they were junk within 6 months. Amazon routinely misrepresents its scratch and dent products it sells through its Warehouse deals and the low rating should be an embarrassment to Mr. Bezos. Amazon is where Walmart was 5 years ago when people hated to enter its stores, because nothing the stores were a mess and the low paid help did their best to avoid customers.
28
For the last 4 years I've been of the mind that I won't buy another item from Amazon as long as I live. They are worse than Wal-Mart ever was.
30
Amazon is a behemoth and could care less about anything but their bottom line...if you have a problem call the oxymoronic titled customer care. You will press a lot of buttons and hear a lot of prompts but you won't get any customer care.
12
Actually when I call, I always get a person and the issue is always resolved quickly and in my favor...always! In fact, it’s their service, not their prices, that keep me coming back.
11
@Dvab
Same here. I have done both live calls with them as well as online chats... and they have always been helpful, courteous, with the issue always being quickly resolved.
Problems have mostly.. lost packages.. and while some merchants will run you through the ringer on lost packages, even acuse you of stealing them from yourself .. Amazons policies are very customer friendly. I see a fast credit back to my Amazon account or a replacement shipped within 24 hours.
Amazon is the most buyer friendly merchant on the internet. Some 3rd party merchants doing business through Amazon... and fulfilling their own orders though... not so much... so I stick to Amazon fulfilled purchases as much as possible.
10
@Alan
Couldn’t disagree more. Their customer service is basically unmatched in the retail world, and I’ve never heard of Amazon being a company about making huge profits.
5
You will never accidently run into an old friend on Amazon and catch up on old times and maybe get a cup of coffee together. You will never meet somebody you might like to date or even marry on Amazon. You'll never joke around and banter with the cashier on Amazon. Meeting random people is part of the joy of life. It won't happen on Amazon.
72
@Linda You'll never meet someone you'd like to marry in your local Walmart either.
27
I agree with you. This feeling of the loss of human contact you described started for me when ATM's first appeared at bank locations. I missed the human contact and banter with the tellers and other customers in line. I've lost count on how many people I've met and struck up a conversation with or old long lost friends I've bumped into in a store. Later on in the day, I always recalled fondly the joy of these chance meetings with random people (as you mentioned) and old friends. I miss terribly all of this human contact when I shop online which I frequently do.
8
@Linda Wonderful comment!
3
Ahhh, the weekly Amazon bashing story in the NYT. What would you guys do without Trump and Amazon as your evil foils? Do you think for a second that when a potential supplier sits across from the Walmart buyer that they are not hammered to make price concessions? Walmart also guarantees the lowest price and still generates twice the revenue of Amazon so in many categories, they have far more negotiating power than Amazon. They also feature outside sellers on their site, but because they are no longer the evil empire, I’m sure they ask for very little in return - sure. Jeez, give it a rest - both buyers and sellers have plenty of other choices - why don’t you try beating them up every week instead of Amazon and see how that goes over?
4
Obviously you either work in a high level job there and/or own a lot of Amazon stock. You have a stake in it somehow. Maybe property related or an uncle or cousin or son. But anyone writing what you wrote has a vested interest in Amazon. Nobody with a clear conscience would write that.
14
@De Sordures
Stop gaslighting.
@Chick: I think you’ve gaslighted yourself. Well done.
"One camp believed that ads would erode customer trust, because shoppers expected Amazon to show them popular products with strong reviews and a good price."
Yes, this is exactly my experience. I used to be able to find what I was looking for on Amazon quickly and easily. Now a search yields page after page of related items, different versions of the item, weird quantities of the item, the item at all kinds of different price points.... And then, when I finally isolate the actual item I was searching for in the quantity I prefer, I'm given page after page of different iterations--new, used, kinda used, very used, free shipping, expensive shipping, delayed shipping, yadda yadda yadda.
Shopping on Amazon has become tiresome and inefficient. I'm surprised people bother with it anymore.
45
I’ve found it easier to search using a different search engine. I always find things faster by NOT searching within Amazon
4
@mm
It is true that search has become more complex on Amazon, mostly due to proliferation of merchants and the products they sell.. all competing for your eyes.
That said.. I take a two step approach. I either enter the name of the product I want, or a description of what I am looking for. Next I click on Amazon Prime only search refinement, then I will use the left hand column of search refinement switches to narrow down what is returned for me to consider. It works great most of the time. After that I sort by average customer review.. and then start picking from there. By the way.. I review the reviews carefully so as to avoid reviews clearly "salted" in by fake reviewers who get paid a fee by the listing merchant for every review. I do wish Amazon would come down harder on merchants doing this nonsense.
Sponsored products... which typically are placed right at the top.. I ignore them. Ignoring them is not hard at all.
3
@De Sordures
good news is that when you find a staple you like .
just "buy it again "
ain't they pals ?
1
I currently run a small business on Amazon, and pretty much every word of that article is... true.
74
@Regina
Then why do you stay?
Clearly the benefit outweighs the challenges... or you would move on to somewhere else.. right?
Or are you one of those.. want it all for free merchants?
1
@Chuck Because there are no other options. Amazon now dominates Google Search for most products.
So many sellers stick with Amazon, watching their profits shrink, and then disappear entirely. then they are out of business
12
Check out responsible marketplaces like eBay, they work with small business owners in small/medium sized towns, specifically to counter the ugly behemoth that is Amazon. Akron, OH, Baton Rouge, LA, places where small business hurt the most. That’s how corporations with large brand recognition should behave, help out the country and the citizens.
I stopped shopping on Amazon over a decade ago, and I’ve never missed out on anything. I’ve always found deals elsewhere, just as good if not better... Bezos is Stalin-Light. Shareholders of Amazon are enablers of the end of competition and capitalism.
6
@JP
EBAY is a grifting merchants paradise.
I stopped using EBAY many years ago.
7
I trust EBay over Amazon, even though I think EBay is a skeevy mess.
@JP “... responsible marketplaces like eBay.”
Jumbo shrimp, military intelligence.
1
I use Amazon for one thing only now, as one of a few sources for researching items to be purchased elsewhere. I'll check to see what items are the highest-rated and I'll sort through the reviews, always with a bit of skepticism to be safe. Since I kicked my addiction by joining my fictional Amazonanon 12-step program, I feel so wholesome.
18
Local stores are expensive and inefficient. By definition they have to cater to the masses and what the majority of people might want. I prefer the long-tail of the distribution, somewhere that can cater to the people with less bland taste. That is online. I for one welcome the death of most local businesses that don’t make anything themselves. Local crafts and beverage are a different story. There is no need for another boring local bookstore for instance.
3
@Stefan
You welcome the death of small town America I take it. The fact is, stores do more than merely act as conduits for shopping. Interaction with the community, tourism, the income of shopowners contributing to the local economy, sponsoring little league, etc. ... Do you think Amazon gives a hoot for your (in their estimation - and I'm being cynical with my next adjective, so please NYT don't censor me) podunk town?
10
@Sirlar
Small town America has different challenges then urban centers. And.. it all goes back to Walmart strip mining the customers right out from under local merchants.
In large urban centers.. it's more about the merchants being impersonal, uncaring, and having lousy inventory and stocking habits. When I want an item normally sold by a local merchant and I am told said item is on back order and it will be X weeks before I can expect it..... FAIL!
2
why oh why do my fellow mostly liberal by times but here. are you not hypocrites watching your local stores close. do you care if sellers race to the bottom to eke out a few thousand dollars while destroying your local store in the process. and that is not good enough for them as Amazon copies any successful products and sells themselves. why do you only care Bout convenience rather than community. when you can't fund yo
ur schools because Amazon pays no corporate taxes what will you say. then of course Amazon comes with their hand out for tax breaks pitting desperate communities against each other while local retailers get nothing but their demise. never shop Amazon and the sooner they are broke up the better.
16
Why is anyone surprised-they started by taking Barnes and Nobles down. I don't shop on Amazon, I do nothing Amazon.
I want America to have small interesting stores and I also want companies to make money that doesn't have anything to with
paying Jeff Bezos. If I spend a few dollars more or need to leave the house to shop that's ok. Trade matters.
64
@Dee HeLlen
True, and little known story: Bezos salary at Amazon is comparable to what a junior grad engineer fresh out of college makes... less than 85K per year. He never gets a pay raise either. https://observer.com/2019/04/jeff-bezos-amazon-2018-ceo-salary/
Bezos wealth.. like that of almost every founder of now large and succesful companies (Gates, Ellison, et al) came from being a founder and stockholder back when the company was small and only had a handfull of employees. Nothing unusual here at all.
1
Great detail about underlying problems. I am lifelong fan of NYT.
I have interests in high quality stationary and particularly fountain pens. I looked on amazon and only found cheap low quality pens and pens from other sellers which I found unsatisfying. There couple of very good online shops like jet pen and gouletpen. Not only they have quality stock but their website is very intuitive and informative that shopping is easy and I found it worth to buy with shipping. I even had pens shipped to Canada. If seller has good website finding market is not that tough.
10
@Nj
Some types of products categories are simply not well served through Amazon. Largely because Amazon is not where people wanting to drop big bucks typically go, do boutique shoppers.
Example: you don't go to Amazon for fine jewelry. You go to places like Costco online, but even there.. selection is limited to what Costco has negotiated great prices on and can pass the savings on to customers.
@Chuck
correct Reverb has replaced eBay as a more organized ecosystem for music stuff . Content , too .
@Nj
Check out Fahrney's Pens, which has a storefront in Washington DC and a website you can order from. They stock tons of expensive fountain pens.
1
I try to avoid purchasing anythimg on Amazon I avoid the sponsered ad products and Amazon top choice. I don't automatically trust either. I always Google a product first. I get more choices and often better prices. I saved a lot money year buying directly from the manufacturers, department stores, and online stores from shoes to furniture. I don't mind waiting a week or two for a good deal and a chance to support alternative sources from Amazon. I'll often use the pick up option from retailer. I still use Amazon, but not exclusively. I try to use Amazon's shipping option to combine purchases for one delivery. It's annoying and environmentally unsound to get deliveries daily. I don't like Amazon's monopoly over commerce. I don't like how Amazon treats small business, warehouse workers and drivers. I spent years avoiding unethical practices of Walmart, now mission is to avoid Amazon.
28
@Ali
and now all those Amazon vans everywhere, actually amazing - hope those trucks are made in the USA . will be a good campaign riff when Bezos runs for President of Mars 2030 !
These sellers are free to take their wares to eBay or another alternative outlet, but they don't and likely won't. If they thought they could do better elsewhere, that's where they'd be.
5
@Stratman
Exactly.
What they really want is all the access and advantages of selling on Amazon.. and NONE of the fees for said access and services.
Some of them are simply whiny and greedy.. neither characteristic has much sway with Amazon eithe.
2
Amazon is one of those frustrating entities that you love and hate at the same time.
Do I need Amazon to buy toilet paper and deodorant? No. Do I use Amazon to buy toilet paper and deodorant? Yes.
See what I mean?
As I wander the streets of NYC and LA (two places I regularly spend time in) I lament the number of empty shops that now line the busy streets filled with Uber cars. But then I go home, pop onto Amazon's website and order even the most mundane things that I used to buy in those shops.
It's just so much easier....
7
Plenty of other websites besides Amazon. I shop all over the Internet, and much less on Amazon flooding the site with cheap, poorly manufactured goods from China. Support indie websites. I do.
21
@George no, I don’t see what you mean... How are you OK with continuing to shop on Amazon even though you clearly know about the deleterious effects it is having on communities and society?
The fact that it’s “easy” is a pretty pathetic rationale.
9
@Oh My
I'm fully aware that there are plenty of sites on the internet to buy things from. And, yes, I do so.
My post was simply meant to be a bit of "tongue in cheek" amusement....
Thinking 21 Century Standard Oil
5
Amazon is the definition of predatory evil business practices. I go out of my way to find alternate sources including Ebay, Target, Walmart, and the manufacturers sites.
13
@Anne Hajduk
Every item sold at Target.com is sold and fulfilled by Amazon. Amazon provides front to back turnkey service for Targets online merchant business. True story, and they are not the only big merchant either.
Walmart has largely adopted Amazons business and selling models.. so I guess that makes them evil too in your book.
2
Not a Trump fan, but there is something to his suspicion that the USPS is not charging Amazon enough. Amazon can battle and may end up killing or buying Fedex or UPS, but that still won't solve their problem in Rural America.
Only the USPS has a huge network of tiny post offices and provides service in thousands of rural zip codes - a business model that no private enterprise could sustain, not even Amazon. Thus the USPS has tremendous leverage on Amazon, especially for PRIME members in rural areas - and it should use that leverage to the benefit of the U.S. Taxpayer. Amazon would never be able to stab the USPS in the back as it did to Fedex, which operates in Metropolitan areas and itself uses the USPS ("Smartpost") for rural ones.
Already Amazon's phalanx of corporate tax attorneys have succeeded in the company paying no income tax; which means that Amazon is not contributing to the upkeep of the very federal highway and air traffic networks that allow PRIME to make its two day delivery promise.
In short, the Government is allowing Amazon to get way with murder, so to speak - and with no good reason other than the politicians are in the pocket of Amazon's lobby.
16
Recent business articles have detailed how Amazon will use its in-house last mile services in urban and suburban areas where they are more efficient than the USPS (gig workers) while leaving the costly rural deliveries to the PO which is legally bound to service every address in the US. That will be one more nail in the services coffin.
4
Trump is not worried about the USPS which he’d like to dissolve and privatize. He just hates Bezos, who owns the Washington Post. Nothing but more self serving babble.
23
of course they do. they let USPS drive 40 miles to deliver toothpaste for a fee of 50 cents.
3
This NYT article explains all the aspects very well.
The points is that Amazon brought in a lot of innovations, thanks, but the truth is that monopoly is bad!
Amazon becomes monopoly as long as both sellers and buyers continue their obsession with Amazon. However, in fact currently there are a lot of online Marketplaces there are, as well as fulfillment centers, trying their best to compete with Amazon. All they need more attention from sellers, and of course, from buyers.
I spent long hours and days to search and list all the other online Marketplaces available, and fulfillment centers.. Not to mention there are many of them I found out having better BBB ratings then Amazon. Feel free giving Amazon's competitors a chance too, here are the lists:
https://ownbusiness.us/marketplaces-to-sell
https://ownbusiness.us/fulfillment-providers
5
@Turgan Amazon's share of total retail sales is 5%. It's not even CLOSE to being a monopoly.
@Stratman, is Amazon a retailer or a Marketplace?
1
@Turgan
I don't think you actually know what the word monopoly means.. because using in the context of total sales by Amazon is absurd.
As illustrated by Stratmans response to your post.
1
Amazon seems to have such a massive grip on the market and yet somehow are still hilariously inefficient. In my neighborhood street there are only 28 homes and the Amazon trucks pass everyday at least 7 or 8 times carrying the same type of goods. Further, due to all their claims of single day delivery they pressure their drivers to cheat in deliveries and deliverables.
When I pointed these things to Jeff's puff team, they acknowledged the discrepancy and revenue shrinkage but never solved the problem.
Amazon's wall is going to fall shortly.
2
From the article:
"Amazon said its ads were optional and the majority of sellers built their businesses without them,"
and earlier
"[Amazon] said that about 200,000 sellers surpassed $100,000 in sales in 2018."
It would be nice to know the overlap of these two groups. Anyone taking bets that nearly 100% of the latter buys Amazon ads? When a de facto monopoly exists at any point in the supply chain, the vertical integration of even non-monopolistic components (like ad sales) can be used to extract/extort rents from small-time operators.
4
@MC
$100,000 in sales could be $ 23,000 in take home pay
1
3rd party merchants complaining about fees for services is pretty much the core of this article.
There is a reason that there are entire online consulting businesses today that cater specifically to merchants who want to tap into Amazon as a storefront. It requires planning, focus, and forethought... just like in the old days when a merchant wanted to set up a brick and mortar store front. It is not for the casual merchant. Some merchants want the Amazon storefront but lack the savvy to do so without shooting themselves in the foot (and then blaming Amazon for loading the gun).
1
@Chuck My read is that the core of the article is this: once a single competitor has a 90% share of a business (like selling electronics online), they can and will use the lack of competition to shift ever more wealth from their customers to themselves. Until or unless their effective monopoly is broken up.
7
@Chuck Chuck, are you one of the company shills Amazon employs to deflect on-line criticism? You sure have made a major investment in defending Amazon for someone with no skin in the game.
24
@Chuck Really how about another service to sell to merchants to milk them more. I know tons of sellers who don’t need management to sell on Amazon. This is kind of hilarious, are you sure you aren’t JEFF posting from Seattle in defense of Amzn. Lots of ways the company can improve things but seriously past two years Amazon once really has been a tech disaster.
No one has even mention the pesticide issue for sellers. That’s a good one coming from a tech company.
7
Seems there’s an anti-trust case to be made here.
9
@Bill Rogers
Prove it. Make your case.
Or is this just another armchair drive by?
3
@Bill Rogers There is a case, and people are making it. The key is to focus on issues on than consumer prices:
https://www.yalelawjournal.org/note/amazons-antitrust-paradox
3
@Bill Rogers Not even close. Amazon has only 5% of the total retail market, and all the signs are that their pricing benefits consumers.
2
Recently I had a need for some brass fittings. Propane fittings. So, off to the local RV parts stores. No luck, none in stock, if the sales help understood what I sought (I had photos).
Off to the local plumbing supply and warehouse stores. Again, no luck. I did support local businesses in the fuel and wear and tear on my truck in my fruitless search.
So, I took a look at what Amazon could offer. One day shipping on all of the fittings I needed.
Well, Amazon got my business.
That is becoming the other side of the Amazon story. Should those retailers I visited had those parts in stock? Possibly as they are commonly used. Was Amazon the reason the items were not in stock. Not likely.
However, I will give local businesses a try. I also will shop other sites for a better price, better shipping. And I have bought at other sites.
So, it is not the “Amazon Experience” that drives me to shop at Amazon.
8
@dan I shop for parts at Home Depot and Lowe’s. Amazon parts are marked up as merchants have to cover fees.
3
@Oh My
My experience with both Home Depot and Lowes is that they rarely have the parts I want in stock at local stores. Instead.. I have to go to their online merchant sites.. order the part.. and wait a week for it to arrive.
Very often I can find the part on Amazon, for the same or even lower price, and have it at my door in one or two days max.
3
Amazon is the equivalent of someone who found an oasis in the desert and now charges people who pass through a fee to drink - anyone who sells anything must pass through Amazon.
If Bezos had not formed Amazon, someone else would have, and made it into a monopoly sales channel. The internet technology is allowing just a few players to stake out virtual "oases" through which everyone must pass. This is happening in retail, ride sharing (which used to be known as the taxi business - Uber and Lyft), social media (Facebook), search engine (Google), advertising (Google, Facebook, Amazon).
But this is only the start. As technology becomes more advanced, we will see ever greater concentration of different areas of the economy.
6
Not me, mon. Went cold turkey on Amazon years and years ago and any company they have bought has been dropped from my list: Whole Foods, AbeBooks, whatever.
I tell my friends that I may end up having to bring my old wooden loom down from the attic, oil my sewing machine, and turn the yard into a farm. But not one cent will go to Amazon...except that I still like the Washington Post. Oh well--hypocrisy.
19
@GreaterMetropolitanArea
isn't the Post a Bezos property rather than Amazon ?
1
Exactly.
I read an article a bit ago about one of those "classic" main street, high end stores that featured ... well, high end organic coffee and jewelry and gifts to support people in the third world.
And they have flourished from listing on Amazon.
Of course, they only have a much smaller store front, and have 15 fewer employees, dedicated to shipping out orders.
I don't buy from Amazon. Period. Don't need to. Don't have to. Don't want to.
12
@Mary A
as of today , free country
I like to do the reverse of what Amazon did to bookstores. If I use their site, it’s only to read reviews and find comparisons. When I buy, it’s in the store or on the business’s site directly. I never purchase through their site.
133
@Brian I have started doing this also.
14
@Brian
3rd party merchants have largely corrupted the review process of products on Amazon... so better be careful.
In fact.. todays buyers need to be savvy review readers on Amazon, or they will get deceived by a 3rd party merchant.
There is an entire cottage industry now that serves 3rd party merchants on Amazon with false review services. Amazon reacts to it to deal with it, but it is so pervasive that the Amazon shopper needs to be aware and factor that into their shopping now days.
Same with some merchants trying to incentivize buyers with post purchase perks to get a good review.
Some merchants are always looking for some angle to boost sales.. and doing nefarious things is something some merchants are completely willing to do.
10
@Chuck It is most pervasive with the massive influx of Chinese sellers on Amazon, they are experts in gaining the system, and amazon is not as strict with them.
It would be interesting if someone did an investigative piece in the reduced fulfillment rates that Amazon offers for Chinese sellers, putting American competitors at a disadvantage, or what happens to sales taxes that amazon collects from Chinese sellers
8
Giant company doesn't play fair? Why are we surprised? Do something about it. Don't join Amazon Prime. Buy from local stores!
15
@JJ
I think I will keep my Amazon Prime membership. It means free shipping and fast delivery (more then half of what I order now arrives in one day, at no charge to me). Items I very often cannot even find locally to begin with.
I get better service and customer support from Amazon then I do with most local merchants too.
Sometimes though... a local merchant has what I want, and at a better price. I will always go with a trusted merchant that offers the best price.
Besides.. this article is centered not on buyers, but on the challenges of 3rd party merchants on Amazon. A completely different context entirely.
4
@chuck
The Amazon myth. It’s not free shipping. You pay a lot for Prime membership - it’s Amazon PR saying you get freeshipping and returns. The cost are added into the product, and Amazon fees, storage costs.
I get great deals from other websites without the Amazon Prime. myth clouding my eyes.
6
@Oh My
I did the math pal. My prime membership saves me north of $500 a year in shipping costs... after factoring in the cost of the prime membership.
Further.. I get the items faster too. If I paid the shipping costs for purchases on Amazon to give me the same delivery times, but without a prime membership.. my shipping costs would be over a thousand dollars a year.
Prime is a bargin for anyone that does any annual volume of purchases from Amazon.
5
To all you commentors that refuse to purchase from Amazon out of protest.... you better check other merchants you buy online from.. because many of them actually use AWS AND also fulfillment services from Amazon.
Example: Don't like Amazon.. better stop buying from Target.com then.. because Target uses Amazon as their selling AND fulfillment arm for all their online sales.
46
And they Amazon are killing Target this holiday season by doing a horrible job of fulfilling their orders. I bought like items on each site because each had the sizes needed for specific gifts. The Amazon gift arrived but the target one same item different size Amazon did not have was 'lost' and never arrived at all. And they have yet to return the money to my account. Thanks for the clarification on the fulfillment process!!!
3
Change the laws of limited liability corporations so execs and major share holders are accountable for wrongdoing, including anti-competitive and extortive practices.
Much of what is described in this article could be called "Bezos's 'Do Us A Favor, Though.'"
8
@anon Extortive practices? Amazon has done more to lower prices and increase convenience than any other retailer in the world.
3
I refuse to shop on Amazon. I hate the way they treat their employees, the way their contracted delivery drivers clog up our roads, the way they treat their sellers and the fact that the company pays no taxes. No one company should have this much power. I will spend more, take the time to find items elsewhere, even do without something if Amazon is the only place to get it.
100
We sold $100k on Amazon 2 years ago. Of that $100k - $50k went to the manufacturer. Normally on our own site, that gives free shipping, before any other normal business expenses are subtracted we're left with $30k.
That year we sold $100k on Amazon my accountant called me in total surprise - the numbers he saw must have been wrong. It showed we only pocketed $2,000. "No" I informed him - that was correct. $2k after selling $100k?!? How is that possible?
It's because Amazon soaks you for fees for this and fees for that and fees on top of fees. And oh yeah, you need to advertise on their site or they drop your position.
Wait it gets better. We sold an item (somewhat esoteric) for $144. It was returned by a customer and Amazon notified us that it was damaged and Amazon wanted to return it for a fee or dispose of it for a smaller fee. So we chose the smaller fee. 15 minutes later we searched for the item on Amazon and sure enough - they were selling it for $124 and not as used. We called Amazon and demanded they send it back to us and sure enough the $124 item disappeared a few minutes later. So on top of everything these people are thieves.
1 in 4 internet sales happen on Amazon and that's a monopoly. Amazon is a monster that is eating businesses left and right, whether they are brick and mortar or companies selling on Amazon's platform.
Anti-trust regulations need to be enacted now! For the sake of small businesses throughout the USA, buy anywhere else.
595
@Charles Flaum
A monoply would be when 4 of 4 internet sales happen on Amazon.
Learn the definition of monopoly and stop with the silly rhetoric.
As for your poor selling experience on Amazon.. that is on you. Nothing Amazon charges in the way of fees for services provided is done without your explicit consent.
As for gnashing about you giving Amazon permission to dispose of a returned item (because that was lowest cost remedy for you).... and then Amazon disposes of it by listing and selling it through their own services.... give me a break. They offered you choices, you picke the cheapest one for you.. and once you did so.. said merchandize was no longer yours to control. Amazon has an entire segment of their business focused on reahabilitation, repackaging, and selling items returned as defective, etc. Would you rather they simply tossed it into the nearest landfill?????
I've looked into selling on Amazon.... and it's not for the casual or careless merchant. You have to know what you are doing, and why you are doing it. You can't just open shop and then collect money and do no due diligence on your part.
17
@Chuck I think you missed his point. It wasn't that Amazon was charging him fees, it was that they were defrauding their customers by selling a defective item as new, and defrauding THEM (Charles' company) by claiming the item had been "disposed of" when they were reselling it. In essence, Amazon was cheating everyone possible.
191
Eye opening and shocking
26
I use Amazon simply because it is so easy and convenient. The ONLY times I’ve had problems with them is when an item is shipped from a non-Amazon warehouse. I no longer purchase items that are not shipped directly from Amazon.
6
@Denny
Same here.
A lot of things I buy from Amazon I literally cannot find locally, or if I can.. the prices is 30-50% higher for the exact same prodcut. And I live in a large urban area.
4
@Denny Same here. The prices from 3rd party sellers are almost never lower than Amazon's price, and usually involve shipping charges and/or slower delivery. The only time I buy from a 3rd party seller on Amazon is when the item is backordered.
2
@chuck Did you know there are many exciting websites beside Amazon that offer free shipping, returns, and are a pleasure to shop on. Maybe you can’t use your employee discount on them, but I shopped elsewhere for the holidays. It was fun and not a generic mall resembling Aliexpress.
4
I am saddened to be educated on what Amazon and Prime actually do to guarantee everything I want in one place.
Makes me re think my Prime membership. Getting a few videos is not worth knowing many suppliers are having to tow the line with Amazon. Just its sheer size reminds me of what I hated about small downtown villages when Walmart came to town. I totally agreed with small towns where I lived in Maine that would not allow a Walmart pithing the city limits. Now I feel the same about the power of Amazon.
More to worry about, gee, thanks
6
The NYT has a buy now button on its book reviews.
10
I despise bullies - be they Walmart, Loblaws (a major Canadian grocery chain), and/or Amazon. This race to the bottom is no benefit to society; if anything it is very damaging (see the growing disparities between the haves and have-nots and the increasing numbers of have-nots). Of course, it's quite something else to those at the top of the food chain. Greed begets greed - why be fair and equitable when you can push people around and take more . . . and more.
Maybe, just maybe, it's time to bring back the 'trust-busters' - when any company (I am also looking at you Silicon Valley, home of Google, FB, et.al.) operates in a virtual monopoly or monopoly-like environment, we all lose . . .
13
All the major box stores have done this for years!! There is nothing new here. Go ask a plumber if he’ll install fixtures from a box store and you’ll enjoy his answer.
5
@George That's actually for a reason. Professional plumbing stores sell higher quality items that plumbers aren't afraid to put their name behind, but have a lower quality line of similar products that they sell to Costcos and Home Depots and such. This is one reason why many such items have disparate reviews.
3
It is a little low of the NYT to use news pages to go after a company controlled by the owner of one of its biggest competitors. Amazon is a store no different than Walmart or Saks Fifth Avenue. They have the right to control what is on sale on their website and who sells it just as other have the right to control what is on their shelves or racks.
4
Are you disputing any of the facts? Shining a little light on what goes on behind the scenes at one of the biggest companies around is a useful thing.
7
@Ben I am not. But how is this any different than Wal Mart or Saks or Target or any other retailer that determines what can be sold in their stores how it is packaged, where it is placed etc.
There is all kind of outrage here. But as with impeachment, treatment of migrants, poor treatment by airlines, etc., etc., nobody really cares. Monday night football is still on every Monday night. You can place an order for most anything and have it delivered. You've got your smartphone and enough data to use it. For most people, life is good and all this stuff about Amazon being unfair is just not that important to them.
6
@Larry
You’re right. Some of us - a small few - do care about things like poverty, homelessness, etc. but we are vastly outnumbered by those who don’t care about anything but their own well-offness, pizza, Amazon, and what’s streaming on Netflix.
No wonder why I got rid of my TV decades ago and last year only bought 3 things on Amazon.
20
Is your comment meant to imply that you’re in the minority in terms of social justice? I would bet you could stand on any street corner in SF, Portland, or Seattle and 8 out of 10 people would say they are concerned about homelessness. The fact is, not many people have the time or patience to continue fighting a broken political system while working til they’re dead-tired every day.
Come down off the high horse, bud.
2
@Wallaby
How about a goal of zero items in 2020?
2
This explains a lot. Another thing that I've noticed is that the reviews are not as reliable as previously. The reviews are kind of a mess. They bundle the reviews for various products together. It's very hard to make sense of them, plus there do seem to be a lot of fake reviews these days. Not just Amazon but because Amazon so big it's biggest there.
I always use fakespot website for unknown products/merchants. If they get a low grade, I don't buy their product. But it sure is a lot of work. Amazon has been winning because it's so convenient. If I have to spend hours researching the validity of the reviews, I'd rather go shopping locally because that's more convenient.
Another loss of convenience is the AZ search engine. I used to get really good results fast when I put in a search. Now I just get a bunch of garbage half the time doesn't relate to what I'm looking for. Who wants to scroll through pages and pages to find the item. Sometimes the exact item is on there and it doesn't show up. What's with that? Again not convenient. Why should I spend hours online. It's really unpleasant.
17
Another pesky problem is that online sales have idenmity for selling couterfiet or copyright violating goods, unlike brick and mortar stores.
5
Of course Amazon won’t comment on Pluggable, because that was a deliberate and indefensible act of sabotage on their part, the kind of action a monopoly corporation with unchecked power can take with no qualms whatsoever because there is no antitrust enforcement in this country, just a bunch of corrupt legislators for sale to the highest bidder.
22
Web services allow data mining of private business activity and future incursion into new areas of exploitation.
Yuck
3
Amazon is sounding more and more like Walmart.
5
Eventually Mr. Bezos will get his comeuppance - arrogance will get the best of everyone eventually.
3
@E
He already did. His wife is divorcing him and taking half of his wealth (much of it in Amazon Stock) with her.
3
Very eye-opening, the article and the comments.
I try to support small sellers, as I am usually buying second-hand/vintage books and the like and those tend to come from here and there, not big operations.
But even formally individual sellers are now saying 'fulfilled by Amazon,' and that usually means really lousy packing/packaging, and zero customer assistance/acccomodation when something arrives damaged, etc.
I have also noticed more and more 'junk' in my searches -- Amazon placing totally unrelated and 'sponsored' stuff smack in the middle of what I really want to look at, slowing up what I wanted to check for.
And ... surge pricing? Yeah, I'd say it's rampant. Prices vary wildly on the same item -- again, let's say an out-of-print book -- from normal and reasonable to multiple hundreds or even thousands of dollars, from one day to the next, or from one depart to another. Which is nuts. (I wonder if sellers 'adjust' their pricing to discourage sales when they've reached their 'allotment' or whatever.)
Bottom line: Amazon is seemingly both indispensable and yet am feeling more and more used by it.
Maybe make some personal changes in 2020 ...
10
I closed my Amazon account when it got hacked and I could not get adequate help from amazon support. They did not care that someone had access and said that t would take 72 hours before they could address the issue. Then I looked online and many other people we’re having issues with their accounts being hacked and not getting back up. No more amazon for me.
6
I live in a small town where the Super Walmart ruined most of the small commerce decades ago. For most things my options are driving over fifty miles each way, buy at Walmart, or shop online.
The same thing Walmart did to brick and mortar commerce Amazon is now doing to e-commerce. We need better legislation, to fight monopolies and employer abuse. We also need to stop the idolatry of billionaires as larger-than-life figures above the law, and we need to make sure Amazon pays fair taxes, like the rest of us.
I admire those who avoid Amazon, but their efforts won't make a big difference. We need to start thinking, as a society, about what we value, and what we accept as legal and ethical behavior. Then, we need to make our representatives accountable for legislating accordingly.
This is like global warming. The valiant efforts of a few won't make much of a difference. But many more (I would say the majority) wold be willing to make collective sacrifices if we make them into law. What we need is to make sure the wishes of the majority, and not a few rich donors, are what rules us.
12
@MR
But these things almost always must start with the few, until gradually others join them or they disappear and whither away.
5
Where I live the stores I patronize are several congested miles away. It is cheaper, greener and less time-consuming for me to shop on-line.
Most of the time, but not always, I find Amazon's prices to be equal to or less than those of bricks-and-mortar stores, with a selection that cannot remotely be matched in a real storefront.
And then there's the free return if the product is defective, does not fit, etc.
2
Yes, of course. That’s why they’re the behemoth that they are. But the question is, at what cost?
8
Bezos greed may kill the goose that laid the golden eggs.
4
have to pay for that 'big blue' space thingy somehow...
1
I was the 2nd (or 3rd depending on how you count it) employee at Amazon, back in 1994. I didn't stick around for long, but the passage of time has convinced me, and many others, that Amazon should be forced to separate its own retail operations from the operation of its "marketplace".
Amazon should be free to sell stuff. Amazon should be free to operate a marketplace where 3rd parties sell stuff. But those two parts of Amazon must be utterly separated from each other, and not allowed to communicate.
For nearly 2 decades Amazon has used its control of its marketplace to strengthen its own hand as a retailer. This should not be allowed to continue.
340
Of course Anazon is a monopoly. It changes policy upon a whim. It abuses sellers how and when it chooses. It dictates prices. And you have to "kiss the ring" to become a seller. Funny how in spite of all of Jeff Bezos power, he couldn't keep his nude selfies off the internet. The bigger they are the harder they fall. It is long past time to clip Amazon's wings.
15
Amazon got its start selling books. As an author, I am grateful for this -- to the extent that it is selling new copies, so that I get to collect my royalty.
However, I was very upset by an article in the New York Times by Douglas Preston, published on October 12, 2017, and telling how amazon had changed its machinery so that potential book buyers of new books were routed to "new copies" that, however new and shiny they may have appeared, had previously been owned by somebody else. Because they were therefore technically "used" copies, amazon as the middle man had had to pay less for them -- the difference amounting more or less to authors royalties, which the authors themselves therefore did not get.
I understand that authors' groups, publishers and so forth protested, and for all I know this policy has been reversed, but it sort of proves you have to watch amazon.com like a hawk.
Personally, I disapprove of monopolies, and I firmly believe that the only thing which keeps amazon on its toes as a bookseller is the fact that Barnes & Noble is in business, so any chance I get to spend money at Barnes & Noble, I do so.
And any other product which is available both at amazon.com and elsewhere I buy elsewhere, even if I have to pay a little more money (which is only rarely). I'm very touched that Jeff Bezos is keeping the Washington Post in the category of "fake news" (as defined by DT) but I think consumers need to beware of him nonetheless!
15
@Piri Halasz Amazon sells pirated copies of books and has done little to remedy the situation.
5
I refuse to shop on Amazon. I purchase locally or directly from the stores themselves. All you have to do to stop Amazon from ruling online business, is not to buy from Amazon in the first place. Easy fix.
14
1) Amazon the company, actually lists and sells less than half of all merchandize sold through Amazon.com. Small merchants, large merchants, small business owners.... all make use of Amazon because it gives them storefront access to a much larger customer base then is available to them on their own.
2) Businesses that use Amazon as their strore front benefit from a lower cost access to a wider customer base then they can do on their own, and as such... it is worth it to the business owner to spend the fees to list on Amazon.
3) NO merhcant is required to use Amazon warehouses or delivery services in order to fulfill their customers orders. They can choose to if they want, and pay additional sales fees for doing so, but no business is forced to do so. For many small businesses.. it is worth it to contract with Amazon for fulfillment services rather then pay the overhead to do it on their own.
4) Amazons business model puts customers first, and as such.. they do in fact keep tight control over all merchants that list on Amazon. As a customer I appreciate this when a seller falls down on delivery, or delivers a defective product. Amazon forces them to make it right for the customer.
5) No business is forced to use Amazon. They are free to go it alone.
6
@Chuck OK. Looks like we have an employee and/or shareholder of Amazon here. Giving a perspective. I agree with your number 5. I would just say it holds for consumer too. No one is forcing to buy from Amazon although by killing competitors in a way it is. That's why I chose not to buy from Amazon mainly for their low corporate taxes, rich Bezos and shareholders at the cost of meager pay with lots of work for employees or temp workers at warehouses. Thanks for your post.
13
Exactly. I don’t shop Amazon because I do not want to support them.
No need to stick up for Amazon. Letting consumers know how a company operates will let us decide where to shop. I don’t believe it should be the other way around letting a company telling me where to shop.
6
@Sri
I am NOT an employee of Amazon, nor do I own shares in Amazon, nor do I act as a 3rd party merchant at Amazon.
Nice try at gaslighting there. This simply demonstrates the weakness of your complaining.
What I am is an Amazon buyer who has been extremely satisfied both with the items I buy on Amazon as well as how Amazon protects me the buyer from any and all merchant malfeasance by 3rd party merchants.
3
And that my friends is exactly why Amazon is now so big and powerful we can no longer continue to take a hands off approach. It will squeeze and strangle a business that helped it grow if it makes financial sense.
14
@JH There are different issues discussed in the article. And we need to think twice and treat them separately. Advertisements may distort user preferences and limit choices, which can be a real problem for consumers. On the other hand, isn't we who design regulation to drive and argue for low prices and quick fulfillment for consumers? We complain when consumers do not get the best prices or fastest delivery. When brands are free to have different prices across different channels, we call it price discrimination and complain about the mark-up (Does "Wow, this is a rip-off!" sound familiar?). We usually argue for anti-trust on the ground of getting end-consumers the cheapest products. Now there is a powerful marketplace pushing brands to keep their prices low, ensure availability and deliver quickly. Of course it hurts the brands and merchants. But isn't it what we aim for? We can of course argue that a bigger portion of the benefits should be shared by consumers, not the marketplace. But restraining the iron fist may just turn into a win for brands, not consumers.
Ebay treats its sellers with similar contempt and ever more intrusive and unnecessary diktats. If it ain't broke, smash it to bits often seems to be their motto.
8
"All of that leaves the suppliers more dependent on Amazon, by far the nation’s top online retailer, and scrambling to deal with its whims. For many, Amazon eats into their profits, making it harder to develop new products. Some worry if they can even survive. " And this is how Bezos is going to go out of business. I am canceling my Prime membership before it renews automatically next year and have been avoiding buying anything from amazon for about a year now after being disgusted with how his workers are treated. Buh-bye, Mr. Greedy.
65
@Sheila I canceled it a while ago knowing that Bezos is the richest person while the ordinary worker in Amazon warehouses suffer with loads of work at meager pay. Go figure!
33
Does anyone know how to eliminate amazon listings on a search? I prefer to buy direct (a local store, the makers website etc), but when I am searching for something, the first and multiple responses are always amazon listings. I've clicked through at least 5 pages and still it is only them. Is it possible to do a search without amazon listings coming in the results? Can google et al. create a way for those of us who want to avoid amazon? Does such a thing exist?
11
@SR , I don't think so, but one thing I do is go to other stores directly, e.g., target.com, walmart.com, or oldnavy.com...whatever your favorite stores are. A little more work, but I find there are many large chains out there wanting to compete with Amazon, and do so successfully.
11
@SR I took everything that was on my Amazon order list and went direct to merchant. I get better prices in a lot of cases and much better customer service. They don't have to pay Amazon to list or on fulfillment and I'm supporting a local Louisiana coffee supplier, a NYS based pet supply company and am supporting my local vet by giving them the sales for supplements, prescriptions.
Not that hard. I've been thrilled to work around Amazon!
24
@SR yes. Google "Exclude site from Google searches" or whatever search engine you use (and Google and Amazon do team up), and it outlines the steps to take.
5
I've noticed. Amazon has become more expensive. Also, the search results, and reviews no longer appear usable. User reviews used to be the most useful. The default is to show advertised items. Even when I change to highest user rating, it still shows "featured" Items in the feed, annoying. Also, Amazon has too much of the mainstream plastic baloney type stuff., like no unique cultural items I am interested in, if they even make those anymore. I much prefer ebay now, and other auction sites, shopgoodwill. I've let my subscription to the Wapo lapse, Prime is next.
53
@idle-mind As a seller, if you are buying a Prime product, That price includes storage fees, ad fees, return fees, shipping to Amazon fees, Amazon listing fee which are extremely high. Amazon keeps tacking on fees, and sellers have to raise prices.
Complain to Amazon and maybe we could sell without getting clobbered and you could get nicer stuff. The only way to survive as a seller is to buy super cheap stuff and mark it up because of the idiot fees.
5
Welcome to the new serfdom. You exist only by the grace of your lord and master.
I recall reading articles a few years back where companies that had built a significant presence on Amazon were simply cut off.
One brick and mortar bookstore had increased their online sales through Amazon to the point where they represented 30% of their sales. Then Amazon simply shut them down.
I thought Amazon started out simply wanting to be a 'portal' used by others to sell their goods. Now we have Amazon building immense warehouses. Surprise. Bezos found out he can make MORE money by controlling more of the selling process.
Amazon is now such large presence that anyone doing business with or through them exists only at their whim.
23
So how does this differ from Walmart, Sears, etc... nothing really new here. Years ago this was pretty much the same litany of complaints that were voiced about Walmart. Still seems to be the norm.... Nothing changes that does not stay the same....
16
@Roxie M Nope. Amazon doesn't just charge a retail price and acquire goods at wholesale. It actually shorts the maker and forces them to pay from both ends. Not the same.
6
@Roxie M This story missed the boat. It's much worse than this.
6
@KKW If you really think that Walmart got the quasi-monopoly it has in so many markets in the country and globally just by buying wholesale, and not by doing exactly what you accuse Amazon of doing, you are very naive.
1
Selling to Walmart involves palletized and packaged items that meet very specific parameters for massive sales. If you can't meet their requirements, they don't carry your products. This is not new for Amazon. It has been true for decades.
6
This is nothing new. Sears had a reputation for driving down prices from wholesalers and then delaying payment to them. The solution (generated by market forces, not government) was the demise of Sears. I am sure there are other examples.
24
@Art Layton You are absolutely correct as to how they squeezed suppliers. The Sears case is taught in business schools to this day. Walmart tries to operate the same way. But the demise of Sears was really due to missing the market. If you look at Sears it is easy to see that what Bezos did was to take the catalog model and bring into the digital age. If Sears had the foresight it could have been Amazon.
However, another thing they teach in B-school is about railroads. To sum it up, the professor usually starts the discussion by asking: How many of you have heard of Southern Pacific Airlines? Great Northern Airlines? How about NY Central Airlines? The point being they, the dominate providers of long distance passenger travel, completely missed the technological change of long distance aircraft.
2
I am pretty sure Amazon does not force anyone to do business with it--or through it.
If you don't like Jeff Bezos' terms and practies, set up your own on-line store, arrange all your fulfillment, marketing, etc. and see how that goes.
Better yet, try opening a store-front, bricks-and-mortar business; wait until you see how that goes.
10
@Mon Ray As consumer, you have choice where to shop. I don't shop in Amazon - I use it only to review the prices and user's opinions. After that buy it outside Amazon or in store.
12
@Mon Ray Once you ship your inventory to its warehouse, you're forced to do business with it. There is no reasonable way to get it back. They change the rules and you have to play their game.
1
I’m pretty sure people like you were making similar bad faith excuses for Standard Oil a century ago.
“If you don’t like how a monopoly is abusing market share go somewhere else” stops sounding clever when there is nowhere else.
12
A modicum of online homework reveals how rapacious Amazon has become. In most cases it's quite easy to never use Amazon again by finding the item you want on their site, then, close out Amazon's page, delete the cookies on your computer, and buy from the original sellers own site. If the seller only sells on Amazon - buy elsewhere. One must try to reward businesses that play fair and reject those that won't......it's not so hard to vote with your pocketbook. Amazon controls their own employees like personal property and their customers like sheep. No thanks.
257
@rickob ~
I understand that. But hey, I have done web work for sales for my and other companies.
And at 65 that is way too hard. Unless it something like a large elastic knee brace ... I just see what's out there ... and then go out and look and hold the product.
Hey, maybe even just walk up and down a couple of aisles, especially this time of year.
And the reality is that for many the cross-purchase takes WAY too long ... like, 40 seconds.
3
This was a fascinating story. I had often wondered what was going on behind the scenes. Now I know.
Last year I moved to Switzerland, and Switzerland does not have Amazon (they encourage people to buy in shops). I was on the fence at the time since previously, I used Amazon a lot, but after reading this article, I'm glad to have moved away from Amazon control.
136
@Susan
I live in the US but do not use Amazon for online purchases.Try to go to the manufacturer's website to order the item. If not possible, I order through different stores/merchants so that no one business gets all my money.
12
I would appreciate a list of countries that are not Amazon-saturated.
8
And yet Amazon had no federal tax liability for 2018...
492
@Stephen NYC
Amazon re-invests in its business aggressively and hence pays no Fed taxes - which is what we should want from a growing and innovative world-beater.
They pay plenty of local and state taxes and of course their employees [over 647,000 worldwide] pay the full suite of taxes.
Data out of context is pretty much meaningless.
4
@Stephen NYC
They are hardly the only big corporation not having any tax liability these days.
Blame that on the latest tax reform by Trump to corporations... and leaving individuals behind.
29
@SteveRR ~
Data documenting how Amazon drove retail book stores, and now a wide swath of of other small and large businesses out of existences, is not meaningless.
Indeed, the NYT had an article very recently pointing out what the net total employment, and income and benefits, results are.
But hey, leave the shift packing boxes and then go out and deliver them for another 8 hours?
22
Seems to me that Amazon has simply gotten too big - it's a monopoly. And when companies get so big they set the rules for everyone working with them. It's much like the demise of brick and mortar stores, only now it's merchants who SELL on Amazon. And of course the flagship Washington POST has NOTHING to say on this matter. Wonder when Bezos and Co. will get their comeuppance??
22
@BabsWC when you have one of the biggest companies in the world to influence the govt policies and pay meager corporate taxes of just 10% on immense profits and a "well-reaspected and well-read" media like WaPo to control public opinion -- you are well set. Bezos is enjoying through his empire. For once, I am happy Trump administration did not give contract to Amazon for their work.
2
@BabsWC Sorry. WaPo offered me a much better rate than this paper did. And I'm really unhappy with a lot of the editorial decision-making here. NOT an Amazon fan, but decided I needed a check on this paper. Downgraded this subscription, added WaPo. The point is, don't use any one source for anything.
1
@BabsWC
More then half of all items sold on Amazon are actually listed and sold by independent merchants NOT Amazon. These merchants have the option to sell through listings on Amazon or contract Amazon to hold inventory and fulfill actual delivery of the sale on behalf of the merchant. The merchant decides how they wish to fulfill order, NOT Amazon.
Any real Amazon shopper would already know this. Armchair critics on the other hand.. are largely clueless.
1
Amazon is in the business of making money, not making money for others.
17
So let’s keep squeezing those workers! And while I am typing I am having someone pick up my food to make me feel important.
Social consequences? Who cares.
6
15 years ago i ordered books for my dying father from amazon because they had large print which WOULD HAVE BEEN easy for him to have read.
by the time the shipment arrived, despite unanswered email after unanswered email from me asking where they were, he had passed.
have not ordered anything since, and never will. amazon deserves ZERO sales.
20
Seventy percent of the US economy is retail and when one company controls such a large percentage of it, it's bad for the overall economy.
380
Seventy percent of the economy is consumer spending, not retail. You are right about Amazon's outsized role in the economy. It isn't healthy.
11
I shudder to think of small vendors selling in Amazon when they are subject to the extreme pricing and inventory pressures. It is not surprising that a company as large as Nike has stopped selling in Amazon.
If find ads in Amazon site particularly annoying and deceptive. I have no hope that regulators can resolve the underlying monopolistic issues. Here's to hoping that the general public can pressure Amazon to change it's ways.
32
This explains why a particular item I used to buy directly from the manufacturer now costs so much more through Amazon; why, when I found it for less at Walmart, the price there subsequently went up. I simply stopped buying the item altogether, no loss to Amazon, only to the vendor/manufacturer.
I wonder whether they regret having traded their independence for greater market access.
14
I used to get my gas from a small independent dealer near I lived.
The dealer was squeezed out of business last year by the large mega-billion oil company that supplied it, who demanded that
it fulfill monthly sales quotas the station's owner found impossible to fulfill. Now it is a car rental business owned by G-d knows who.
Life isn't fair.
Big almost always wins.
25
“It was like talking to a brick wall,” he said. “They want to be able to control everything.”
This guy gets it. Why would someone with more money than entire GDP of Slovakia? Power and control.
Bezos controls massive amounts of the American economy right now, with literally zero oversight.
100
I worked for a small music publishing company and Amazon was not worth the sales they brought to us. They would not pay an invoice until every item they had ordered was sold. Then, when they lost inventory, it was up to us to write it off. The worst is that there was no phone number or person to talk to, everything was by email which just drags out conversations. I do not have solutions on how to deal with Amazon except by purchasing as much as I can from local merchants.
389
@Mary Prete ~
There was an article a while ago that documented how companies on your "niche"were being undersold, and hence destroyed, from others around the world selling bad copies or outright fakes of what is supposed to be protected under copyright and other laws.
17
@Mary Prete
We refuse to buy on Amazon. Support your local small merchant where possible, buy from local producers, go to the website of manufacturers, support small business.
We don't miss out on anything from Amazon that we can't get elsewhere.
18
@Mary Prete I worked for a trade publisher and dealing with Amazon in the 90's was brutal. They set out to use their search engine to conquer the world and book publishers were their first victims.
12
As a consumer I am fed up with the barrage of ads and “sponsored” products. Every transaction takes longer, seems like it is designed to confuse the purchaser.
I know what product/brand I want to purchase, Amazon please stop playing “bait and switch.” I have had to return many items this year often due to poor quality of the “sponsored” item that was ordered by mistake.
I have made a bigger effort this year to try and order directly from small shops and local businesses. Avoiding Amazon as much as possible.
205
@LGC Amazon hides sellers products under their own warehouses items. The only way we get visibility without resorting to using fake review farms is by using the ads. Even if our product is more popular than those shipped with Prime!
Be aware Amazons Choice is deceptive. It’s ONLY products that use their warehouses for shipping.
Sellers who don’t use their warehouses and those warehouses have many sordid stories about lost inventory etc., are squeezed by Amazon to use ads or not be seen.
Currently search is a mess on Amazon. You may have to search several times as they rotate items and you are not seeing everything.
41
@LGC
You are completely free to ignore the ads and the sponsored products. It is not hard to do.
Some of the best products I have purchased on Amazon have been from sponsored ad listings.
Thing is.. I never take anything at face value on Amazon.. because there are too many independent merchants listing on Amazon now days... and Amazon literally cannot police them all proactively.
Some merchants seed their reviews on their listings to try to deceive.. but they are pretty obvious when they do this.. because they are so blatant about it.
Some merchants misrepresent their products on Amazon, but in my observation.. they don't last long on Amazon.
Buyer beware.. applies everywhere a buyer interacts with a merchant. Amazon actually does more to insure customers are not taken advantage of by third party merchants on Amazon.com than any other virtual storefront I have shopped online... including Walmart and Bestbuy (who sell more and more 3rd party sponsored content and items every day).
1
@Oh My
The landscape is well known by all merchants, and more often then not it is another merchant that is impacting your sales, not Amazon.
As a long time buyer on Amazon.... when I search for an item I want to buy.... I don't just take what pops to the top of the list. I check all selling merchant listings for the item first. More often then not.. the best merchants (in terms of quality and customer service) ARE listed at the top of the selling merchants.
It true that Amazon does rotate the top of the stack to give each merchant fair front page coverage.. but as a customer.. I am fine with that.. because I only want to do business with the most reputable merchants. It is also true that the merchants constantly play games with thier pricing too... so don't pretend you as a merchant are a victim of Amazon. Merchants will adjust prices, or hide true cost by discounting and then marking up shipping costs (an old trick they learned on EBAY).
My personal experience with buying from merchants on Amazon.com is that the merchants who sell and ship on their own are most likely to sell inferior product or to abandon the customer who is dissatisfied. Best to stay with merchants who fulfill through Amazon... as Amazon protects the buyer from bad merchant practices.
3
The article causes me to feel outraged. This quote in particular, was shocking: "One Sunday in July, he got an email saying that Amazon had removed the docking stations. Amazon said it was because of complaints that Plugable’s products had not matched the condition described on the site.
Other docking stations, including one made by Amazon, filled the void online." If Amazon controls the e-commerce market, and they control what is sold on the market, and if what is sold slowly becomes Amazon products - when do we declare them a full on monopoly? Will Congress step in? Amazon today is worse than Microsoft in its peak. I hope that something happens, and happens soon, before all competition is squashed in favour of two-day deliveries and paying the lowest price possible. What they're doing should be illegal. I know I personally have stopped using Amazon entirely, and I can only hope others start to follow suit.
287
@austin Unfortunately Amazon know what sells, and then find manufacturers to copy the items. For example The NY Times covered Amazon copying a popular men’s shoe. This is now very routine for them to “take” products away.
20
Amazon requires authors of books sold on Amazon to use its print on demand services. If not, the author's book will be shown as out of stock or unavailable.
Amazon is the modern day unregulated monopoly like those of the last industrial revolution in the days of Carnegie and Rockfeller, unethical and powerful industrialists.
Sadly, we all love the convenience but do not think about the effects like the social impacts (mom and pop businesses, hollowed out main streets, worker conditions at Amazon or in its supply chain, information privacy) or the environmental impacts (frequent purchases = frequent deliveries).
Time that regulations caught up with technology and that buyers paid more attention to and take responsibility for the impacts of their purchases.
If not then soon there will be little or no choices to purchase locally and only Amazon or Walmart to buy from.
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@jj
What do you mean they require authors to use their print on demand services? Are you talking about self-published authors who use the Createspace platform? Presumably authors who are published by a publisher have their books printed in association with that particular publisher.
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So this is what the best and the brightest do when they go to Amazon? Turn themselves into capitalist bullies apparently. What exactly are they teaching in business school these days? Why go to business school, just read a book about John D. Rockefeller and copy everything that he did. There is nothing new under sun in business.
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No company should have the amount of power that Amazon has. Congress should have started scrutinizing and regulating the practices of Big Tech a while ago.
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@Zoe To be fair, they were busy with important things like investigating Benghazi for the third time.
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@Zoe
What exactly is there to scrutinize?
Amazon being successful in a market where competition is fierce?
How about the Amazon business model that focuses first and foremost on fullfilling the buyers wishes of good quality prodcuts, available in a timely manner, and at very competitive prices?
By the way... Amazon.com is not big tech. It's a wide open virtual comnsumer storefront.. offering any ethical merchant the opportunity to list their products on Amazon.com.. and have instant access to more then a hundred million customers. Merchants lacking in ethics and customer service do get on Amazon as well.. but soon customer complaints flood in to Amazon, and Amazon either sanctions or removes said merchant for bad customer service and practices.
Amazon Web Services is big tech.. but this article is not about Amazon Web Services.
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@Randall And emails! don't forget the emails.
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I see this story playing out right now with the independent contractors signing up to deliver for Amazon. I can just see the horror stories now when Amazon adjusts their payments for delivering packages. These contractors are taking out loans to buy vans and other business costs and their sole customer is Amazon. Any business that only has one source of income will probably not end well.
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@will Amazon is brutal, seriously brutal with metrics. God forbid you get sick or have an accident. They time you on everything
Yes it does bring level of service up, but it would be nice for the fees demand out of sellers, that sellers got good service in return. Their seller support team is in India, 98 per cent of them don’t understand what you’re saying or dish up cut and paste answers for serious problems.
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Weise writes, "Amazon punishes the businesses if their items are available for even a penny less elsewhere." Notably, my first novel, "Lion at the Door" is available on Amazon, and I do not recall being subject to such an agreement--but perhaps I am wrong about that.
Regardless, last I checked, price-fixing is illegal under the Sherman Anti-Trust act and its progeny. Amazon's lawyers likely characterize the company in its vending agreements so that they are not 'competitors' of those companies they permit to sell on their site, but that seems like rhetorical sleight-of-hand under the statute.
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Thank you for addressing this. I discovered a month ago that Amazon limits sellers sales and payout every month. Every two weeks if you reach a limit of your allotment Amazon turns your sales off. When I asked about this from seller support, they verbally hand spanked me for even questioning this, and basically told me not to inquire more.
There are many sellers who are five star sellers, who have been selling on Amazon for years - Amazon does not reward good sellers but the do allow overseas sellers come in with Facebook fake reviews and rule the Amazon roost.
I can only think by limiting sales Amazon keeps sellers paying a monthly fee, ad fees and they can’t be called a monopoly.
My other complaint was basically Amazons lie about their advertising. Amazon tells sellers to use their sponsored ads and that it will increase sales. Except it really won’t as Amazon voila LIMITS sales! I was shuttled to about 30 Amazon reps when I made this very clear that they were NOT telling sellers the truth about the ads. New sellers fall into this trap thinking ad campaigns will increase their bottom line. It will not. Some exposure yes, but increase no.
The amount of fees Amazon takes is ridiculous and I have told them that this is driving up products prices, and or sellers are buying super cheap junky stuff and selling it higher to make up for absurd fees imposed on them.
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@Oh My
Then don't do business as a merchant through Amazon.
Problem solved
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The Amazon model is very similar to the Walmart model. If you want to sell to it you have to constantly lower your price, or they will have a copy made by a cheaper producer.
See: http://www.pacificviews.org/weblog/archives/016262.php
Those who wish to sell on the net can create their own website of course, but then that makes their products more expensive, and that brings in the low cost competition. They also need to have a site that shows up well on Google, and other roadblock. So we see how the two working together actually control the market, without violating the anti-trust laws so sellers are squeezed two ways.
One major way producers cut costs is to cut employment and benefits. The MBAs are constantly at work trying to find ways to minimize costs and maximize profits. They have no social conciseness, they only thing that counts are the pennies saved. They will try to convince you that lower prices are good for the economy and all of us. The hidden costs are what we pay for more needed social programs.
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@David Underwood I was also thinking about the similarity of Amazons and WalMarts relationships with and demands on suppliers and manufacturers.
While I'll refrain about commenting about the ethics, that Amazon is behaving this way should come as no surprise.
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@David Underwood The only issue with squeezing costs out is that it is by far the easiest strategy to copy. Eventually you need to give your customers a reason to buy other than price.
I think that Costco does this pretty well- I always feel that the quality of the goods at Costco is better and I am willing to pay for it. For sure a lot of their stuff isn't cheap
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@David Underwood Thanks for the info. This makes me so glad that I don't shop at either.
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Tumi and the middleman should sue Amazon for tortious interference with their contract and business relationship. Seems like an easy case to make given Amazon’s admissions as stated in the article. Potential here for a class action too for other parties similarly situated. And there are probably antitrust violations galore too. Amazon’s sharp business practices go unchallenged but if they were forced to follow the laws already in force and pay damages it could force a change in their practices.
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@Hap35 Tortious interference? It's not illegal to say "we will not buy through middlemen at inflated prices." Ultimately that's what middlemen do, whether it be in pharmaceuticals or retail.
Middlemen used to control everything, and now they don't. Amazon has stepped in and offered an alternative (their own logistics and fulfillment). This is a classic disruption case.
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@Jared
Indeed. Middlemen used to be repsonsible for massive markups on retail items once they hit the shelves for customers to buy.
Amazon very definitely has a business model designed to flatten the sales and distribution of goods to consumers. THAT is a good thing.... except for the middlemen.. who offered little real value for the markups they simply applied and passed the product onward.
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@Hap35 a small business does not have the deep pockets to take on law suits against Big Dogs like AMZN.
The Big Dogs know that and will keep any suit in limbo through delays etc until the small business owner is depleted and goes away.
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