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The Elizabeth Warren Sideshow

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GreenGoo
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Re: The Elizabeth Warren Sideshow

Post by GreenGoo » Sun Mar 10, 2019 12:44 pm

Amazon marketplace is an online market place. Kraken even refers to it by name.

They also gouge their "partners" according to Kraken.

eBay might be considered an online marketplace as well. The lack of regulation and oversight makes buying from small guys a difficult choice for consumers. Do you risk being scammed to save 3 dollars? Or 20? Or 500? Or do you just go to the big guys and pay extra up front, knowing you've got a multimillion dollar corporation with a reputation to protect and fear of the law (although the law's teeth seem to be getting filed down little by little in this regard) backing your purchase. Not to mention economies of scale mean that you *can't* save anything with a mom and pop shop.

So it's more risk AND higher prices buying from anyone who isn't already a behemoth. With so few behemoths it's only a matter of time before prices start to rise. The moment steam had a good stranglehold on digital distribution their prices started to rise and haven't stopped. Sure there are others but the market is littered with online store corpses. GOG is struggling it seems and everyone but Steam seems to be just one bad quarter from collapsing. We've watched them come and go. Ubisoft and EA can afford to maintain their own software and store because they are huge. Data centres and distribution software development don't come cheap, and those are expenses with limited profit attached.

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Kraken
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Re: The Elizabeth Warren Sideshow

Post by Kraken » Sun Mar 10, 2019 1:23 pm

Victoria Raverna wrote:
Sun Mar 10, 2019 10:55 am
Kraken wrote:
Sun Mar 10, 2019 3:01 am
Victoria Raverna wrote:
Sun Mar 10, 2019 12:50 am
Kraken wrote:
Sat Mar 09, 2019 7:34 pm
Combustible Lemur wrote:
Sat Mar 09, 2019 6:44 pm

Amazon discount prices hide the dark side of their profits. Last time I heard Prime isn't even directly profitable. It is designed to maximize data collection and improve their AI research.
Don't get me started on the shakedown that is the Amazon Marketplace. Have you noticed how few independent, mom-and-pop shops still exist? Yeah, that's why.
Not because of Walmart?
I meant online shops. Sorry, I should have said.
I don't think that is because of Amazon. I think the problem is marketing. You need a lot of advertising to have a successful online store. Online mom-and-pops shops just don't make sense.

What you need is an online shopping mall where mom and pop shops can open shop inside. Then you can pool your advertising fund.

I don't know about the situation in US, maybe Amazon killed all competitors. In Indonesia, we now have several competing online marketplaces that allow people to "open shop" and sell stuff through them. While there is still no successful mom and pop online shops, small business owners still can sell their product online.

I think those online marketplace are still burning money to compete but they attracted a lot of investors and two of local ones are now over US$ 1 billion in valuation.

Do you have something like them in US that can survive and compete with Amazon Marketplace?
Small businesses can still sell their products online within the Amazon Marketplace. There is no effective alternative. Etsy, I suppose, if you sell crafty items. I guess eBay still exists, too.

The problem is that Amazon sellers sacrifice independence. Your product descriptions and photos must conform to Amazon rules. Your shipping and return policies are Amazon's policies. If you stray, they can shut you down, and the appeal process is not in your favor. Amazon owns your customer data. If you go with Fulfillment By Amazon they handle distribution, so you lose control over packaging and shipping. Amazon takes 20% off the top of every sale, plus a fee for warehousing your merchandise if you're using FBA. If you pass on FBA and continue to ship your own products, you're obliged to ship fast and free or lose your favorable placement. Unless you have a unique product, you're competing with potentially hundreds of others of small sellers for that crucial page-one placement, and that competition gets dirty (counterfeit products, fake reviews, anonymous complaints, etc). If your product is too successful, Amazon might simply take it away from you and sell it directly.

Technically you're still independent, but in every way that matters you're working for Amazon and paying them for the privilege.

If you don't assimilate, then you face the advertising issue that you mentioned, and online advertising is controlled by two other monopolies: Google and Facebook. I won't go into detail about that except to say that it's prohibitively expensive. When I started with AdWords I could buy keywords for as little as 5 cents a click. By the time I shut down, it was hard to get any clicks for less than 50 cents -- and with a respectable 2% sell-through, you need to buy 50 clicks for each sale. You can't pay $25 to sell a $20 product.

None of this was true when I started Curio City in 2005, although the forces were already in motion. Amazon tried to recruit me three times over the years. I researched it each time, and each time I concluded that the cons outweighed the pros. I might have been able to grow CC into a million-dollar business, but I would have been miserable doing it, and it could be snatched away at any time.

To bring this back on topic, these monopolies are absolutely able to crush or assimilate all competitors. Consumers don't see what's behind the Buy Now button, nor do they care. Cheap stuff arrives promptly; what's not to like? Which is why these monopolists need government oversight and rules, unless you're comfortable with their ever-widening dominance.

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Kurth
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Re: The Elizabeth Warren Sideshow

Post by Kurth » Sun Mar 10, 2019 2:25 pm

Kraken wrote:
Sun Mar 10, 2019 1:23 pm
The problem is that Amazon sellers sacrifice independence. Your product descriptions and photos must conform to Amazon rules. Your shipping and return policies are Amazon's policies. If you stray, they can shut you down, and the appeal process is not in your favor. Amazon owns your customer data. If you go with Fulfillment By Amazon they handle distribution, so you lose control over packaging and shipping. Amazon takes 20% off the top of every sale, plus a fee for warehousing your merchandise if you're using FBA. If you pass on FBA and continue to ship your own products, you're obliged to ship fast and free or lose your favorable placement. Unless you have a unique product, you're competing with potentially hundreds of others of small sellers for that crucial page-one placement, and that competition gets dirty (counterfeit products, fake reviews, anonymous complaints, etc). If your product is too successful, Amazon might simply take it away from you and sell it directly.
And from a my perspective (that of a major brand), here's where a huge problem lies. Amazon controls everything about its marketplace but takes zero responsibility for what goes on there. The extent of counterfeit (not to mention blatant and illegal knockoff) product being sold on Amazon out in the open is incredible. Check out this recent article from the Atlantic if you are interested: Amazon May Have a Counterfeit Problem.

It's so bad that Amazon has recently started listing potential exposure to liability for the sale of counterfeits as a risk to the company in its 10K filings. That is significant.

And from the small business owner's perspective, it's even worse (see Kraken's full comments above). There are so many stories about small business owners with a cool product setting up shop on Amazon, doing really well at first, investing in their business, only to have Amazon start selling a knock-off or counterfeit version.

Unfortunately, so far, the courts have been reluctant to find Amazon liable for much of the IP infringement that takes place on its site. Amazon is generally shielded by the defense that it is not actually a "seller" of goods because it never actually takes title to those goods but merely acts to facilitate transactions in which title passes from the actual seller to the end consumer. This is even the case where the goods are Fulfilled By Amazon, despite the fact that Amazon is storing those goods, distributing those goods, handling payments for those goods and even any returns and customers service related to those goods. Still, no direct liability for Amazon. So far.

So, is Amazon flawed and are we in need of some regulation/case law that addresses some of these issues? Absolutely.

I just don't trust Elizabeth Warren and her trust-busting posse to be the ones coming up with the fix.
The Net interprets censorship as damage and routes around it -- John Gilmore

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GreenGoo
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Re: The Elizabeth Warren Sideshow

Post by GreenGoo » Sun Mar 10, 2019 3:51 pm

Kurth wrote:
Sun Mar 10, 2019 2:25 pm
I just don't trust Elizabeth Warren and her trust-busting posse to be the ones coming up with the fix.
Sure.

Who else has taken a public stance on this problem? I'm not being facetious, I really don't know everyone's platform and don't watch Amazon specifically for news about it.

Assuming there are others, who do you trust (at least more than Warren) to come up with a fix? How are they suggesting they go about it?

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Re: The Elizabeth Warren Sideshow

Post by Kraken » Sun Mar 10, 2019 6:03 pm

I haven't delved into the nuts and bolts of Warren's proposal because I'm not expert enough to pass an intelligent judgment, and because I presume that it's more of an opening salvo than a finished legislative proposal (much like the Green New Deal). I'm glad that she's put challenging the tech monopolies out in the open. That's particularly bold for a Democrat because Silicon Valley's tech bros tend to the liberal side -- they may be budding oligarchs, but they're "our" oligarchs.

I'll worry about specifics if her bill seems to have legs. She does have good policy-wonk chops, and her general intention of shaking up capitalism to save it hits a sweet spot between Bernie's sweeping socialism and the usual establishment tinkering that changes nothing.

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Victoria Raverna
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Re: The Elizabeth Warren Sideshow

Post by Victoria Raverna » Sun Mar 10, 2019 6:32 pm

How do you break off Amazon? If it is not Amazon, you'll still have the same problem with another marketplace.

You reduce Amazon's competitive advantage then you'll have Jack Ma or someone else start a different marketplace that is still going to be a problem.

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Jaymann
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Re: The Elizabeth Warren Sideshow

Post by Jaymann » Sun Mar 10, 2019 6:54 pm

Amazon has also taken over the publishing industry for non-blockbuster writers, with minimal money going to the actual writers. I was wondering what if someone bit off that segment of their business model with improved percentage to writers. Seems like talent would flock to such a site. Of course you would have to be a billionaire to start such a venture.
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stessier
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Re: The Elizabeth Warren Sideshow

Post by stessier » Sun Mar 10, 2019 6:59 pm

Jaymann wrote:
Sun Mar 10, 2019 6:54 pm
Amazon has also taken over the publishing industry for non-blockbuster writers, with minimal money going to the actual writers. I was wondering what if someone bit off that segment of their business model with improved percentage to writers. Seems like talent would flock to such a site. Of course you would have to be a billionaire to start such a venture.
Do you have a reference for that? It's something I've been looking into but it's always seemed like they do better than other publishing routes.
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Jaymann
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Re: The Elizabeth Warren Sideshow

Post by Jaymann » Sun Mar 10, 2019 7:23 pm

stessier wrote:
Sun Mar 10, 2019 6:59 pm
Jaymann wrote:
Sun Mar 10, 2019 6:54 pm
Amazon has also taken over the publishing industry for non-blockbuster writers, with minimal money going to the actual writers. I was wondering what if someone bit off that segment of their business model with improved percentage to writers. Seems like talent would flock to such a site. Of course you would have to be a billionaire to start such a venture.
Do you have a reference for that? It's something I've been looking into but it's always seemed like they do better than other publishing routes.
I was going off anecdotal stuff (my son uses Amazon), but found an article of HuffPost easily enough.
The facts are sobering. At the January forum, Preston quoted the following statistics: Amazon controls 75 percent of online sales of books and 65 percent of e-books sales.

The numbers are more staggering with self-published authors. Eighty-five percent of e-books sold by self-published authors are controlled by Amazon.

These authors, hungry to see publication, eagerly sign Amazon contracts which bar them from using their material elsewhere. Non-compete clauses written into those contracts reduce authors’ freedom to make a living by reusing their writing.
It's pretty insidious.
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GreenGoo
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Re: The Elizabeth Warren Sideshow

Post by GreenGoo » Sun Mar 10, 2019 7:34 pm

Victoria Raverna wrote:
Sun Mar 10, 2019 6:32 pm
How do you break off Amazon? If it is not Amazon, you'll still have the same problem with another marketplace.

You reduce Amazon's competitive advantage then you'll have Jack Ma or someone else start a different marketplace that is still going to be a problem.
:roll:

I've tried absolutely nothing and I'm all out of ideas.

Why clean the house, it's only going to get dirty again.

I don't know how to fix it. This is not my area of expertise. I'm fairly sure "why bother" is not reasoned solution for a problem of this magnitude and importance, however.

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