My local FiveGuys sells a Cheeseburger for $11.87 Thru DoorDash app but for $9.89 thru the FiveGuys App. We aren't even talking about a different service like Delivery vs Pickup, those fee's get layered in later -- its the same menu priced 20% higher to pass costs of the partnership onto the customer. This is anti-consumer and deceptive and is the sort of behavior Amazon prevents with their policy.
You're still completely confused about your own analogy. Fiveguys are analogous to product vendors, in that they actually have the thing that the customer wants. Doordash are analogous to Amazon, in that they charge a fee for delivery of the thing that the customer wants.
Yes it is
> It represents the additional value that their service provides.
In theory but that is with non real world assumptions.
In this case, I would be charged 20% more for the identical hamburger either being delivered to my house or me picking it up from the store because of how I placed the order. It has more to do with lack of transparency on the platform and deceptive billing practices than value add.
Amazon uses their leverage to not allow vendors to charge 20% to pad their margins. F@#$ DoorDash for lying about prices on their platform and allowing vendors to pass it on to consumers.
Continuing the doordash if it were like Amazon, the 1.98 extra for ordering on door dash is forced to be also charged to people who go pick it up themselves. That doesn’t make sense but that’s what Amazon is doing. Amazon is not forbidding them from padding the price, its forcing them to pad the price elsewhere in order to make that elsewhere uncompetitive. it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does.
For your view of it to be correct, the cost of an item would have to be separated into two categories, marketplace fees and base item cost. Market place fees would include every cost of selling on Amazon, any percent they take. Then if Amazon said that the base item cost must not be lower anywhere else, but the marketplace fee portion can vary, then yes your view would be correct. However, Amazon is actually saying yeah our marketplace fee portion may be exorbitantly higher, but you have to charge people our high prices even on other cheaper marketplaces
[1] A merchant is permitted to offer discounts for paying in cash, however, the discount must be given as a reduction from the standard price.
Does Amazon prevent you from offering promotions or discount code's on your own Shopify site? Otherwise I don't think it's analogous.
> it’s forbidding them to pass on cost saving from using marketplaces that don’t charge the exorbitant tolls that Amazon does.
No it's forbidding them from passing on the costs of the partnership, to Amazon's customers
> For your view of it to be correct, the cost of an item would have to be separated into two categories, marketplace fees and base item cost.
Which in my example you do have. The consumer experience is almost identical... I can place order for pickup/delivery thru the FiveGuy's app or thru the DoorDash app, but thru DoorDash the FiveGuys menu is priced 20% higher to pass-on the cost of the partnership to DoorDash's customers, instead of FiveGuy's selling a burger at lower margin.
If Amazon remove's the policy, prices go up 20% on Amazon to be at the same margin of their Shopify app or w/e. It's the businesses Amazon was squeezing who will benefit not the consumer. Maybe we shouldn't let Amazon or other oligopolies have that much power over vendors but they are taking the side of Amazon customers here.
And at the end of the day... some distribution channels are more expensive than they are worth. If the commercials don't make sense, stop listing on Amazon.
This is the point. Amazon is has too much market share for that to be feasible.
Anyway multiple people have attempted to explain how Amazon’s policy is not in the interest of us consumers or the businesses. At this point, one can ponder it and try to see that view or one can keep thinking Amazon is helping us rather than driving up the prices.
> but thru DoorDash the FiveGuys menu is priced 20% higher to pass-on the cost of the partnership to DoorDash's customers, instead of FiveGuy's selling a burger at lower margin.
But they can’t sell at a lower margin! They have no margin to spare!
> Amazon remove's the policy, prices go up 20% on Amazon to be at the same margin of their Shopify app
No, prices stay the same on Amazon to be competitive with other Amazon sellers. Prices lower elsewhere off Amazon
Market share of what ? The internet?
Of course Vendors can become too dependent selling thru Amazon just like they can with any large retailer or on any enterprise client. But that is not the same things as a monopoly.
Even this anti-Amazon parent piece, only makes the claim that 60% of shoppers "start their journey on Amazon", whatever that means. Personally, I might "start my journey" on Amazon but I only try to buy digital goods (AWS, Video) and will actually be fine with paying more through other sites and having to create account and all that headache, because I've had extremely negative experiences with Amazon & don't trust co-mingling.
They can spend lots of money on Google, FB (or even Walmart and Target) adds instead of on Amazon.
> But they can’t sell at a lower margin! They have no margin to spare!
Then they should stop selling through that channel, maybe chartering private jets isn't the best distribution strategy for a lemonade stand... Or they can make changes to their business so that these channels make sense.
>> Amazon remove's the policy, prices go up 20% on Amazon to be at the same margin of their Shopify app > No, prices stay the same on Amazon to be competitive with other Amazon sellers. Prices lower elsewhere off Amazon
Were both generalizing about fundamental changes to massive/complicated marketplace so who knows both versions could play out to some extent... but like I've said I think the businesses will inflate costs to pass to the consumer, if they are given the opportunity.
This has been illegal in USA since 1890. The only hope for Amazon is to hire every decent economic torts lawyer in the nation before e.g. Shopify get their act together. This is open-and-shut restraint of trade. Given the sums involved, it might actually be possible that a year or two could pass when Bezos doesn't get even more stinking rich...