Re:The FTC Sues to Break Up Amazon over an Economy-Wide “Hid...
by kube-system on Wednesday October 04, 2023 @07:39PM
(#37773170)
There are two reasons why that 65% number is wildly unrealistic:
1. We're ignoring fixed costs associated with onboarding with an ecommerce platform. Selling on one website has significantly lower fixed costs than it is to sell on every ecommerce site on the internet minus one. We're talking thousands upon thousands of retailers, not a handful.
2. Not all ecommerce sites represented in that 65% permit third party sellers.
If Amazon's market share is 35%, then the non-amazon customers comprise the other 65% (which, being greater than 50%, constitutes "most").
Amazon: ($5 selling price - $3 fees - 0.80 COGS) * (100k * 35%) = $42,000
Not-Amazon: ($2 selling price - $0 fees - 0.80 COGS) * (100k * 65%) = $78,000
If a seller raises prices to match Amazon, they can be undercut elsewhere by those willing to forgo Amazon for the larger overall market share.
Amazon is convenient to small sellers in that they offer more customers on a single site than any other, and with limited bandwidth sellers logically want to minimize how many different sites they need to interact with, but charging for convenience is not inherently anticompetitive behavior. Amazon may have abused it's position in the particulars of its MFN implementation, but MFNs in general are fine.