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Comment by thatguy0900 | Hacker News Reader

The incentives dont always get messed up. Every grocery store has their own branded items, they even usually get special shelf placement and sales. Its only the greed of these tech companies that makes it an issue by really going hard on abusing their position

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That example is always brought up, but honestly? I don't think that's a fair thing either. I think that particular form of abuse is mild enough and has existed for long enough that we don't even think about it.

A law that stops tech companies from this abuse should also stop grocery stores from doing the same thing.

I would really not like to double my grocery bill by being excluded from buying the store brand items. I actually like Great Value because it's half the price, same as Amazon Basics. I think they are both fine things to exist.

The best way to keep prices low is strong competition.

Amazon Basics undercuts competitors by having no cost to sell on the Amazon marketplace. Then once the competitor they're imitating is out of business, they can raise prices, and you wind up paying more.

I think it would be perfectly fine if the Basics brand existed as an independent company and paid the same fees as everyone else. But real competitors can't sell at a loss indefinitely just to win over the whole market.

>Amazon Basics undercuts competitors by having no cost to sell on the Amazon marketplace.

Amazon branded products have an advantage through access to analytics, not cost of doing business. Amazon issues internal chargebacks to subsidiaries and business units for use of their platforms.

That's still an unfair advantage to Amazon Basics that competitors can't get.

Good points.

Still, even with those charges, Amazon can just choose to take losses knowing they aren't really losses. They can run that brand unprofitably and if the losses are coming from distribution fees being charged internally, well, the company still comes out ahead.

And the internal analytics is really a much worse abuse. I suspect that grocery stores make their internal brands the same way, and again, I'm strongly opposed to that being allowed.

I think a significant difference is that supermarkets don't make significant money on their own branded items. They are more like loss-leaders.

Aldie and Lidl operate by selling almost exclusively, recent supply chain issues have at least temporarily changed this some, their own store brands. If whole chains survive by selling cheaper store brands I assume the other supermarkets are making decent money off their store brands.

It's often not fair. Trader Joe's has a reputation for bringing in new and popular name brand items. Once they determine market fit with their customers and build demand they clone the items and replace with their own brand.

The dirty little well known secret is that store brands are created in the same factories as the name brand and are often the same companies.

> I think that particular form of abuse is mild enough

How mild is it, really? Consumers might not feel it, but for all we know manufacturers (at least the smaller ones) are getting anti-competitively slaughtered.

Greedy doesn't make sense as a criticism of individual for-profit corporations any more than predatory makes sense as a criticism of a cat. The problem in this case isn't that Google and Apple are greedy; the problem is that there aren't effective competitive forces in their markets to keep them in check.

That's probably not the best example. There are a lot of brands on the shelves, but very, very few companies. The grocery chains don't produce those items. Store-brand stuff is more of a white-labeling situation with the goal of capturing more of the price curve. It's pretty much a single producer for all the stuff, occasionally with slight variations so people don't catch wise. If you were to start an independent producer, you'd have a very hard time finding shelf space.

French producers complain of unfair negotiations with large supermarket corporations. Multinationals can win against distributors, but it's much harder for smaller local farms.

grocery stores aren't a marketplace, they're a store. they purchase product from suppliers, and re-sell it. they're making the purchase and taking on the risk of stocking the competitor's product. if they can't sell that product, they're the ones taking a loss, not the supplier (generally speaking, some vendors get better terms than others).

the problem with a marketplace is that the marketplace isn't taking on any of the risk. google is just getting a cut of sales, so their incentive is to sell the product where they get the biggest cut and there's no self-interest in them treating anybody else fairly.

Your grandad's grocery store worked that way, but modern retailers are actually pay to play. They are more like a marketplace than you'd think.

Ever wondered why big stores have meters of just Coke and Pepsi, but corner shops have a few each of dozens of brands of drink? it's because only the big brands can afford to buy in. The retailers have market power and they use it to divest cost and risk onto the suppliers.

Getting a new product into a grocery chain also often involves expenses beyond buying shelf space like paying fees setting up sample tables.

There are some beloved brands that can get away with not paying to play. In Canada Hawkins Cheezies made it a badge of honour that it was usually on the bottom shelf at gas stations because they had a policy of not paying for shelf placement.

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