Cue making dozens of companies compete to supply Amazon with the manufacturing contract and constant downward pressure and you get a good product from Amazon at a good price. Not a problem right?

Until the private label brand forces 90% of those formerly quality-focused small brands to shut down and due to their "algorithms" detecting less competition, begins raising prices again. And now the expertise of small brands is gone and no competition springs up in the market.

I've seen this happen in a couple product lines over the year and is one reason we pulled off Amazon. Amazon customers are entitled pains in the ass, and the margin there isn't sustainable. The only way for small brands to make Amazon work is to aggressively sell a single SKU and put in remarketing/back-channel outreach to customers and make the conversions to the rest of your product line off Amazon.

This is explicitly against Amazon's policy, but their policy is in place to ensure they profit and you never gain traction so you remain reliant on them until they day they put you out of business with their own private label line.

Not sure I'm seeing the problem. On the surface it sounds pro-consumer. Plus, this is already common in brick & mortar stores, I think Costco is particularly well-known for doing this (and of course private-label/house/generic store brands are hardly uncommon elsewhere too). If it was that destructive, why do we still have brand names in regular stores as it is?

Most of these sellers are much smaller than the brand names you see in supermarkets, and also much newer. Spigen, Anker etc. don't have the same sentimental decades long attachment that Kellogs, or Pepsi have with consumers either.

Whenever some disrupter comes into a market, you always see some people saying this "just you wait, they'll jack up the prices sky high any minute now!!" and it seems to happen rarely, if ever.

For example, there are plenty of small towns where Wal-mart was able to dominate and drive out small mom and pop retail shops. I've heard plenty of complaints about that, but I've never heard anyone say, "...and then after they drove out all the little shops, the prices went through the roof!!"

It's happening at Amazon. When they started, their prices were often much cheaper than physical retail. Now they're about the same, and sometimes outrageously higher.

> For example, there are plenty of small towns where Wal-mart was able to dominate and drive out small mom and pop retail shops. I've heard plenty of complaints about that, but I've never heard anyone say, "...and then after they drove out all the little shops, the prices went through the roof!!"

I doubt Wal-Mart makes pricing decisions like that at the store level, so your example doesn't really hold up.

I'm curious if you have any examples. I have been very happy with Amazon. Even though every now and then I look up competitor's prices and selection Amazon is usually better at one or both. When they aren't it's not by a lot.

Many people in this thread have complaints about Amazon but my experience has been great so I'm wondering where the disconnect is coming from.

Different poster, but just this morning I was looking for a simple non-smart grounded switch with a physical on/off button in Canada.

Amazon has a couple I could find:

Belkin for $21: https://www.amazon.ca/Belkin-F7C016q-Conserve-Power-Switch/d...

Leviton for $14: https://www.amazon.ca/Leviton-1470-W-3-Wire-Grounded-Switch/...

Local Rona store has the Leviton for $5: https://www.rona.ca/en/plug-in-switch-125-v-white-01815677

This is what did it for me:

https://www.amazon.com/Philips-Hue-Ambiance-Equivalent-Assis...

https://www.homedepot.com/p/Philips-Hue-White-Ambiance-A19-L...

https://www.bestbuy.com/site/philips-hue-white-ambiance-a19-...

All $29.99. A couple years ago I was buying a lot of these in ones and twos. I was also also having a lot of trouble with Amazon Logistics messing things up (and Amazon refusing to allow me to "deprioritize" them, so I could get my package through another carrier with fewer issues). That struggle lead me to take another look at local retail, and removed my illusions about Amazon's automatic superiority. The local stores have most of the same items, for the same price, and available more quickly without shipping delays. They also don't have the fake-review fueled counterfeit problems that Amazon has.

As I've learned more about shopping at local stores, my Amazon use has been reduced to items that are only available on it or that I don't know where to find elsewhere.

If their data is correct there were times when it was available for 10-20% off.

Having read more comments in this thread I'm starting to think that my experience has been different (for the better) because 80+% of the time I know what I'm looking for before I visit Amazon. I rely on Wirecutter and other websites for recommendations if I'm looking for something I know little about.

Another thing is that Amazon has almost everything. It's much simpler to buy a couple of books + nail clippers + socks (one of my recent purchases) from them than make separate orders elsewhere.

And unlike probably most of the posters here I'm from Europe and I haven't experience any unusual issues with shipping so maybe it's a real and more recent concern in the US.

It's not much of a problem, but not much of an advantage either.

So, the question I'm confronted with is: why pay the same for a worse experience? The Amazon route forces me to pay more (Prime) to get it within 2-5 days, or even more to get it faster. Then there are the AMZL_US delivery hassles on top of that. The Home Depot route costs me 25 cents of gas and a 20-40 min of time to get it now-now.

> Do you have any examples where Amazon is selling a product for "outrageously higher"?

Not offhand, but I specifically recall seeing outrageously higher prices for some grocery/drugstore type items. Stuff like a $2 item selling for $6.

Before the MAP ruling, manufacturers could not ban resellers based on pricing, and you saw a lot more Internet discounting on products that the manufacturer saw as "premier" items, that they didn't want reputationally-impacted by low sale prices.

6 companies might sell the same product at varying prices, some of them uploading 1000s of items they have dropshopping for, but no real inventory. 1 or 2 may legitimately sell the product at a manually entered price that's competitive - when those sellers sell out, the others who dropship at cost+100% show up as the default seller.

The big dropshippers make their profit off infrequent, high margin sales that can be auto fulfilled when legitimate sellers run out of inventory.

On the other hand, IIRC studies show that larger companies pay more than smaller ones, and I think there have even been suggestions that this explains some of the GDP per capita differences between developed nations, that some have more large companies that are then more productive due to economies of scale and specialization.

But I can attest to 2 products I've ordered yearly for the past 3 years, increase in price about 10% each year. The diversity of competing products has decreased substantially.

(Well, that and the problem that Walmart sometimes drives out all the mom and pop shops and then closes the Walmart a few years later, leaving the town with nothing but the next closest Walmart 30 miles away.)

Amazon makes no money in retail to drive out competitors and when that day finally happens! Just you wait! The prices! I'm still waiting. The ride has been beneficial so far.

[1] http://journals.sagepub.com/doi/full/10.1177/000312241876244...

Buying private-label items in supermarkets over name brand has been recommendation #1 in personal finance circles for at least as long as I've been alive. Hell, some private label products are better than brand... I'll go out of my way to buy Kroger's private label ice cream and sodas.

And it's not just food. Half the stuff you see in Walmart is private label, including clothing and pharmacy products (and I've found that I actively prefer their private label sleepwear over name brand). And whenever I buy OTC meds at CVS, of course I always take the private-label bottle, which has the same ingredients yet is half the price.

> I've seen this happen in a couple product lines over the year and is one reason we pulled off Amazon

Oh, I see. You have a personal financial stake in spreading FUD against private-label brands because you operate a name-brand business.

I believe Costco (Kirkland brand) and likely Amazon also contract with one of the major brands (e.g., Tide detergent) to make a store-label parallel product with perhaps slightly different formulation, but often the exact same formulation. The name brand saves on their marketing costs and sells at higher margin, Costco gets a great product they can sell to customers for less than the competition, and customers willing to trust the Costco "Kirkland" brand save a lot of money ... it's a three-way win.

From https://www.wideopeneats.com/store-brand-vs-name-brand-why-k... ...

    >> It’s a common misconception that the generic is made from a cheaper brand.
    >> Sometimes the generic is made overseas with inferior products, but a lot
    >> of Kirkland Signature products are actually the exact same product as the
    >> name brand product.  ...  Sometimes, they’re even manufactured in the
    >> same facility!

EDIT: backpack experience

It's different imo. They see what private label products sell on FBA (and the specs they need to fulfill), and then can just negotiate better deals from the same suppliers, because most FBA sellers ship straight from chinese factories to Amazon warehouses it's no secret where it's coming from. And for many product categories there aren't that many high quality factories anyway.

The important part are the specs and quality of the product, if you don't specify and interact with the factories, you'll get crap, if you spec by focusing on the wrong things you pay too much and still get crap. The FBA sellers are basically just testing the right mixture until Amazon steps in adopting their formula. A successfull low cost product is just that, a good enough quality at an as low as possible price.

If you're looking from a supplier side, yeah this business is bleak. But keep in mind someone will always accept a lower margin, run the same business more efficiently, or can produce your goods at a lower cost.

Just because you guys can't stay in the game, doesn't mean the game is broken. You got beat by open competition.

But I'm talking about design and product expertise. People sourcing knockoffs can create a cheaper version 1 of a product, but only a brand connected to it's customers will use their feedback for version 2, 3, 4, n+1.

I'm a little insulated in the food niche because product quality and freshness and expiry dates are huge risk factors, but this applies to other industries as well.

You can buy a knock-off Amazon branded chain lubricant from China that lists the same ingredients if you want, and it may work well in low impact situations. But for my motorcycle, you bet your ass I'm spend 2-3x the lowest price I can find on Amazon for a well known brand with a reputation and uses quality inputs and filters and has no additives. When my health is on the line, brand expertise is essential.

Same with food. There's a floor for quality, and you can't escape the value trade-off. Something being cheaper doesn't mean it's quality is unaffected, but the short-term, inexperienced people at Amazon don't care about that.

I can buy and sell our "product" at half price by buying last year's crop or a lower grade, and I can sell that garbage exclusively through Amazon and "win" the completion, but nobody really wins in that case - me or the customer or our competitors - only Amazon.

It's just capitalism at work. Yesterday's high-quality high-price item becomes today's low-priced low-quality commodity. Quality-focused small brands in every industry and every market need to be constantly improving, developing new product improvements, new niches, new products. (E.g. an even-higher quality version for the luxury niche.)

It's extremely unlikely that Amazon will be be able to raise prices long-term on an own-brand item with "no competition" simply because... well, capitalism. As soon as they do, manufacturers in China or whoever sells the equivalent product at Wal-Mart will list on Amazon for a lower price and make money... so Amazon lowers the price again... and as always, the invisible hand of capitalism keeps prices low for the consumer.

With Amazon, I don't think they are seeking that balance at all. I do not think it's a good long-term move for their retail side. The problem with stabbing all of your friends in the back is that you also have a back.

When I was a kid, the supermarket had an isle named "generic", and all the generic stuff was relegated to that isle and came in plain yellow packaging. Back then, I would have accepted that they're not selling to the same customers as the name brands.

Today, store brand stuff at the supermarket is sitting on the shelf right next to the name brand stuff, with intentionally similar packaging. They are absolutely competing with the name brand stuff. And thats true at Home Depot and Walmart and Costco and everywhere else I shop that has a mix of store-brand and third-party brand stuff.

Of all the places I shop, Amazon is the only one whose store-brand is plainly labeled as such, and I give them kudos for that. Some places like the grocery store and Costco have a single store-brand, so you don't have to work too hard to figure out whats name brand and what isn't. While yet other places have several store brands that aren't really marketed as such in an attempt to confuse you into thinking you're getting a name brand (plumbing and electrical fixtures at Home Depot and Lowes is where I've seen this most rampantly)

I want to add that there is a hidden benefit for name brands to having the house brands there, at a lower price point. There's plenty of fascinating reading on "price positioning" and how having a lower house brand right next to the national brand results in increased sale of the national brand.

My main point was that I don't think Amazon sees its relationship with vendors the same way that older retailers do. WMT has a deserved reputation for being very aggressive with their suppliers, but I believe that their culture still sees the relationship goal as win-win (they would argue that they are helping their suppliers achieve better efficiency, or often licensing the national brand's stock to make their house brand so more sales for all). I know nothing about Amazon's buyer culture, but their own brand activity does not seem to give much consideration to supplier health.

It's also interesting to note that their own brands are immune to the commingling problem, which gives them a perverse incentive to let that problem ride. That makes me very uncomfortable.

I'm sorry but I just can't buy that. Generics in the supermarket and drugstore (at least the ones I go to) are directly next to the name-brand and clearly compete directly. There's no "arrangement" or "balancing of interests" between the two, any more than Coca-Cola and Pepsi have an arrangement or balance of interests to appear on the shelf next to each other -- which they of course don't, but rather are in cutthroat competition with each other, the same way they have been for decades.

It's flat-out competition pure and simple, there's zero difference of intent from what Amazon is doing. And both survive, because some people prefer to pay a little extra for name-brand or quality, and some people prefer to save a little money and trust generics. The only balance is between pricing and demand.

Many store-brand generics are manufactured by the exact same company that manufactures the name brand. The arrangement works because the manufacturer know that some consumers are cost conscious, some are brand conscious and willing to pay more. If they lower the price of the name-brand to get the cost conscious consumers, they lose out on the name brand markup. The solution is often two slightly different brand from the same company at different price points. For this to work, it's important that the store brand packaging have zero connection to the name brand.

Costco is especially known for doing this. IIRC, Kirkland batteries are probably Duracells in different packaging.

The invisible hand corrects mistakes, but that's no defense of making mistakes.

This is what creates the imbalance in the competition. The distributor uses a private-label to bundle the sales of a lucrative product-tier that is sold across multiple brands in his channel into a single in-house brand.

For the original-brand to enter this channel again after it has left, it would have to be _cheaper_ than the private-label (to exceed the profit the channel makes with its private-label product), or prove that it can sell MORE VOLUME than the private-label for whatever reason (=more profit for the channel).

Unfortunately for both cases the brand is entering at a steep disadvantage, because it would have to finance its own brand to overpower the brand of the private-label, market their product to push sales, yet sell-in at a lower price, and even rely on the very same brand it now competes with (100% of the channel customers are shopping there because of the channel-brand).

At this point in the game, creating consumer-value becomes a niche-topic, because the barrier is now to create more profit for the channel, otherwise he will not allow you to reach the consumer...

That's one of the reasons why we keep seeing an increase in own-brand stores of major companies. It's the lack of "brick and mortar net-neutrality"...

So, I would think the same would apply here: it's ok that Amazon has won a monopoly as a retail channel, but starting to leverage that to sell their own goods should be against antitrust laws. However, it seems that in the last 2 decades the only thing that courts have considered is "is the price lower for the consumer", so most antitrust laws appear to have been eviscerated in any case.

People seem to forget a fundamental part of capitalism is that government should intervene to maintain a level playing field. Then...what defines a level playing field..

edit: another quick googling says that US courts apparently almost never conclude a company has market power if they have less than 50% market share: https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?r...

Amazon is still growing at a good clip but I'd be really surprised if they were able to pass even 20%, let alone 50%.

We could probably have post-scarcity as Keynes envisaged right now if we hadn't created rampant throwaway consumerism along with increase in capability post WW2. The moment an issue is "solved" fake problems will be invented to sell a needless alternative. e.g. The creation and marketing of liquid soap that's worse in essentially all respects to bar soap, or the whole creation of body and looks insecurity to sell a cosmetic or cream.

So, surely in x years when technologically we're able to achieve post-scarcity it'll just spawn another fake solution to another fake problem? Another reason to keep working 40 hrs instead of dropping to 20.

Maybe it can truly appear after World War 3, the banking and finance wars.

Humans require a timely supply energy to live and act. Converting energy into human-usable form, requires energy. Recycling and remanufacturing require energy just like mining and "unsustainable" manufacturing do. And even renewable sources can collectively provide only a finite amount of energy per unit time.

That's a pretty low bar, isn't it? Show an iPhone's capabilities to, say, a WWII soldier or industrial revolution textile worker, and they'll deem it pretty magical.

Electronic computers were being built in WWII and television existed. I doubt many would see an iphone as magical.

The uneducated masses of soldiers and workers are much easier to dazzle and fool than technical personnel; and I apologize for not qualifying my previous comment enough to convey the idea that the Star Trek replicator, if it were to exist and be transported to the present day, would indeed be magic to any sane scientist or engineer.

Time Traveler: look at this iPhone!

WW2 soldier: that’s a flimsy looking walkie-talkie, wouldn’t last a day fighting the Waffen SS. Do you mind? I got work to do.

You could use it as a personal organizer - but without connectivity it can be argued that a paper organizer is easier to use. There are a few other programs that will also work in a fashion, but again lacking connectivity the paper equivalents are as good if not better.

There are also a few games that will work: you can really impress them with the games you can play.

The only thing impressive will be the camera - a full color picture that you can zoom in on and save is interesting. Having 10000 photos (plus some videos) in your pocket will get attention. Of course once the phone breaks you lose all that, but still it will be impressive.

You would also have no way to charge it, it’s not like any modern phone has simple inputs for 5v or whatever.

https://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-...

some are very obvious but it is similar when grocery shopping, it can be difficult to know who is making the product you buy.

The customer-expectation of a brand-product is based on the perception, the history and the presence of that brand, a well-crafted association and experience that is funded with the profit of the product.

The private-label product is cutting this funding. It will not finance the supplier-brand and it sets its own expectation and quality-thresholds on the product. The supplier accepts that and waives his control to get the volume-order and fill production-gaps in its factory.

In this kind of deal there is no direct relationship between the original brand and the private-label product anymore.

Edit, for clarification: It's not said that the potato-chips will be exactly the same. The minimum requirements of the brands may not match with the minimum-requirements of the private-label, i.e. for the private-label a different grade of potato, oil, salt might be used.

Isn't it time we grew up as society, get forthright and stop trying to trick people into buying stuff by hiding information so sellers can bait-and-switch, cut quantities, cut ingredient value, etc..

Isn't it embarrassing? You sell great batteries at a good price, but only long enough to capture the market so you can push bad value on millions of people and cause excess damage to the environment .. so you can make a personal fortune. Straight theft seems almost moral compared to this.

I bought biscuits yesterday, same box, same price, 17% less biscuits. Just now the packaging is very wasteful, but they managed to use extra plastic to disguise the reduction of food content. Oh, and apparently as the small print on the back gives the contents this is all fine. Some manager got a bonus for that I imagine.

Cognitive Violence is a thing. It won't (usually) kill you as directly as a blow to the skull, but it's not exactly life enhancing either.

If I'm Pepsi and you want to white-label my product but then again still want to tell everyone it's Pepsi, you still make your sales on the back of my brand-investment, so you'll have to pay for the brand as well.