Amazon enforces a Most Favored Nation (MFN) condition on sellers, basically implying that they cannot sell the same product elsewhere for cheaper. Funny enough - when Amazon pushes their fees higher, it means the prices go up everywhere, that's Amazon inflation.
so does this go for companies which sell electronics like phone companies etc. or since I think resellers sell it on amazon, maybe we don't have MFN condition?
But like, my question is, Doesn't this cripple every company which sells electronics on amazon or something?
I think amazon tries doing it to say that you would only get the best price here, thus people might buy from amazon which can then increase the sales making retailers believe they need to be on amazon agreeing to MFN policy and then crippling their custom market too I suppose
Are there any loopholes to this? What if I am a seller and then I can have lets say my book be on amazon for 100 bucks as an example and I can create a website where I sell it for 110$
But when someone signs up they can get a voucher for 20$ and then they can apply it for what I am selling which for them becomes 90$
I think amazon's MFN is monopolistic especially for things like books which is what amazon first was created for.
I kinda wish if there was a service where I can buy one time right to publish a book from the authors directly for like the books price and then be able to download it or print it from local competing printing/tech service shops..
It does cripple them, but only those Amazon can strong arm. There are some companies that refuse to sell on Amazon for this very reason - one example I know is Jellycats. MFN applies at reseller level - not at product level (obviously).
Yes, it is monopolistic - some call it technofeudalism, because Amazon owns the "land" and extract land rent out of it - with questionable service in return.
That's nonsense. People actually choose to use Amazon because their service is impeccable.
The argument about Amazon requiring cheaper prices is true in theory but in practice not strongly enforced. I just bought a kettle on Amazon instead of from another seller who had it 2 euros cheaper because I combined the purchase with other stuff that the seller didn't have.
I have readily told people that some items they were buying could be found for cheaper on AliExpress, but they didn't care because they wanted the convenience and fast service.
By the way, many of Amazon's suppliers sell the same product cheaper on AliExpress and other marketplaces; that completely kills the argument in the first place.
Amazon is successful because other companies were complacent and ignored the upcoming internet economy. Amazon built a very complex logistic system that took a very long time and a lot of investment to build. Now that they dominate, the lazy competitors cry about monopoly.
In my country (France), the traditional supermarkets are just about now coming in with alternatives to compete, and they are very far off the mark for both service/selection and often price as well…
Can be said for all monopolies. I am not arguing that Amazon is not successful. They are so successful that they are now showing monopolistic behaviour.
The MFN principle is enforced - but only for the same reseller. The same product may be sold in another channel under another reseller, Amazon cannot touch that. AliExpress is surely outside of that scope. Also, EU managed to "convince" Amazon to stop MFN in principle in EU countries, practice is different (they don't enforce it, but give credit breaks) - it's still being enforced in USA and subject to legal challenges: https://www.johnstonclem.com/news-insights/amazon-antitrust-...
https://www.proskauer.com/blog/amazons-most-favored-nations-...