I’ve worked for Amazon. The thing you have to remember on the retail side is much of the focus is on CP (contribution profit) and much of analysis has to do with finding the largest negative CP products in different marketplaces and pulling levers to make them less negative. There’s a large number of negative CP items carried just because it improves customer selection which helps drive larger cart orders. I never heard of squeezing more profits out of already profitable products probably because positive CP is an indicator of a competitive price point.

Grocery stores have been doing this for decades.

"Our milk supply expires at the end of the week? 50% off!"

And then they raise the price of eggs, bread, peanut butter, and other frequently purchased items by 5 cents each.

That's not the same. This is more along the lines of examining what is causing the negative CP. The margin is impacted by several factors that determine the cost, but then you can go a step further and look at the net impact on profit based on the items it was purchased with. Much of what is sold on Amazon is not stocked by Amazon. Therefore the symbiotic relationship that is best is to maximize vendor profit AND Amazon profit. This means being competitive on the Amazon marketplace as well as against other retailers and that can be best achieved by Amazon lowering the net margins to be profitable, but not uncompetitive. These are things from the quality of images and detail about the product to the shipping options, to the damage incurred during storage/shipping. The end goal is to optimize for the customer propensity to checkout and not return the items which is also a good sign of customer satisfaction. Most people who walk into a grocery are going to walk out with whatever they put in their cart. Cart abandonment is much higher in e-commerce and so there's a good deal of effort understanding what lowers the propensity to complete the order.

The manufacturing cost for DVDs is close to zero so sellers have room to cut prices. They aren't comparable to appliances.

Licencing and content production cost money, though.

People seem to forget that the manufacture of the final saleable product is but a fraction of the cost to produce the product. While the individual saleable item might be cheap to manufacture, there are many more expenses that are paid for through the sale of the product. Licensing and production definitely costs, but there are other day-to-day expenses as well. The office staff that is not production, but is necessary to keep the facilities functioning also must be considered (HR, secretaries, assistants, legal, janitorial, etc).

Those are sunk costs for any production by the time you get to selling retail DVDs.

Yeah, there's nothing inherently bad about monopolies. The problem only arises when monopolies are forced into people by the government. Instead, people choose Amazon on their own.

But Telecoms and the old Robber Barons had monopolies without government forcing people.

I mean there are areas where peoples only choice of ISP is Comcast and equally the Government wasn't forcing people to buy Standard Oil.

Any monopoly is bad because it allows them to ignore consumers as there is no competition.

> But Telecoms and the old Robber Barons had monopolies without government forcing people.

Telecoms were totally built by govs. Back in the days govs were obsessed with controlling the means of communication, so all the related biz was due to the monopoly right.

> AT&T established a network of subsidiaries in the United States and Canada that held a government-authorized phone service monopoly, formalized with the Kingsbury Commitment, throughout most of the twentieth century.

> With $18.8 million spent in 2013, Comcast has the seventh largest lobbying budget of any individual company or organization in the United States.[62] Comcast employs multiple former U.S. Congressmen as lobbyists.

Sure, nothing to do with the government. Go ahead, try to bypass FCC and establish a new telecom company. It's literally pushed by the gov, as in any heavily regulated domain with patents and other monopoly rights.

As for robber barons, that's mostly an antitrust myth to scare people

> After 1900 it did not try to force competitors out of business by underpricing them.[37] The federal Commissioner of Corporations studied Standard's operations from the period of 1904 to 1906[38] and concluded that "beyond question ... the dominant position of the Standard Oil Co. in the refining industry was due to unfair practices—to abuse of the control of pipe-lines, to railroad discriminations, and to unfair methods of competition in the sale of the refined petroleum products".[39] Due to competition from other firms, their market share had gradually eroded to 70 percent by 1906 which was the year when the antitrust case was filed against Standard, and down to 64 percent by 1911 when Standard was ordered broken up[40] and at least 147 refining companies were competing with Standard including Gulf, Texaco, and Shell.

But everyone does lobbying. Singling our Comcast like that is weird to prove a point of government and telecoms. Even if they are in the top 10.

>But everyone does lobbying.

What? Your local Cafe does lobbying? Only magacorps do that, and yes, they use it to protect themselves from competition.

And no, protecting yourself from competition using lobbying, monopoly rights, patents, regulations means exactly this: big biz uses government to ensure its monopoly/oligopoly, aka governments creating monopolies.

>Comcast like that is weird to prove a point of government and telecoms

Comcast is using government to ensure its marketshare is not an example of government forcing people to use the service?

It exactly is IMHO.

It’s disingenuous to do faux ignorance by acting like you don’t know what I roughly meant when I said everyone. You know I wasn’t talking about your local cafe. Or even a $10M/year company.

> It’s disingenuous to do faux ignorance by acting like you don’t know what I roughly meant when I said everyone. You know I wasn’t talking about your local cafe. Or even a $10M/year company.

Then articulate your point more clearly.

Sure, many the American megacorps are using the government for their own sake. That's exactly proving why US is such a crony state, where big corps are protected from competition by a huge apparatus of bureaucracy.

What's your point? If they use the government it's not the government's fault? Government is literally a mean of establishing oligopolies and shifting the bargaining balance from people to corporations.

> Then articulate your point more clearly.

I don’t buy that you didn’t know I didn’t mean everyone because of articulation. As if such a basic point needs to be specified so much.

You point is moot because there is no capitalist society where big companies will not interfere with government. If government is too big, they will lobby the government. If government is too small/inexistent, they will run monopolies by direct financial control and other "standard" practices: buying out competitors, collusion, threats of violence.

> buying out competitors, collusion, threats of violence.

You can't buy a competitor if he don't want to be sold. Neither can you threat somebody with violence if the government does its job. I don't even comprehend how the absence of interventionism presume allowance of such violent measures. Don't confuse violence with "non-competitive practices". The latter are seldom harmful, or at the very least much less harmful than those leveraged by the allowance of interventions.

I gave the Diapers.com parent company example elsewhere. They were doomed with Amazon’s relentless price cutting and marketing. Either they sell or they’ll become worthless. You can say they have a choice, but did they really? I don’t think they did.

> They were doomed with Amazon’s relentless price cutting and marketing. Either they sell or they’ll become worthless. You can say they have a choice, but did they really?

So they've provided a worse service? I'm fine with it, if it means lower prices.

Of course they had a choice. And not only "to sell or become worthless", but also invent or innovate, as Amazon did, when it swallowed a huge chunk of Walmart's pie.

I don't know if Amazon is good or bad, neither myself nor anybody around ever used it, but if its service would not be good enough, any competitor could easily use it to conquer the market (as Amazon itself did), until Amazon would protect itself via regulatory capture.

Utter, utter bollocks. See - Microsoft and the stagnation of the web around IE 6.

There's plenty of problems with market capture by a single entity, government or no.