These kind of contracts are standard for all kinds of third party marketplaces. You don't have to sell through them if you don't agree with the contract.
When the price advantage is the size of the fee difference or smaller, that's fair and good for competition and I support legal restrictions on contract clauses that want to block it.
Demanding price parity is completely standard for all resellers and market places, pretty much on all scales and all around the world.
Of course you want more legal restrictions and regulations. That's the standard hacker response to anything that comes up, probably including if you want suger in your coffee or not.
But try to think about why Amazon would put such a thing in their contract. If they were just out to abuse any power dynamic, they would of course tell sellers that they have to put a more expensive price anywhere else. Price parity is fair for all parties involved. And if sellers think Amazon's fees are too high then they shouldn't use Amazon - which is what the great majority of product sellers have decided to.
Massive monopoly power. Some profit is better than none, even as Amazon works to make 'some' as small as possible.
> Demanding price parity is completely standard for all resellers and market places, pretty much on all scales and all around the world.
Price parity would be great if they were selling the product to Amazon, and Amazon was demanding that price be the same among all retailers. Because of the structure of the deal with this markup, we need to consider the numbers with and without the markup.
> the standard hacker response
Wha.
Also I want quality competition and I only want to regulate anti-competitive things.
> But try to think about why Amazon would put such a thing in their contract.
Because it benefits them.
> If they were just out to abuse any power dynamic, they would of course tell sellers that they have to put a more expensive price anywhere else.
That would get them more scrutiny and be too obviously unfair. Demanding the same price sounds fair until you look into the details.
> Price parity is fair for all parties involved.
Parity is fair when you properly include or exclude markups based on context.
> And if sellers think Amazon's fees are too high then they shouldn't use Amazon
And lose most of their sales? It's an abusive relationship because of the power Amazon has, and they structured these rules to limit the ways other companies can compete.
> Because it benefits them.
That is how business have been conducted since the age of Moses and before: Nobody wants to do business unless they benefit from it. Ideally the benefit is mutual. Usually the benefit has to be mutual for business to be made.
> Parity is fair when you properly include or exclude markups based on context.
Parity means the price for the end customer, or at the very least the advertised price for the end customer.
> And lose most of their sales?
99,9999999999% of product sales in the world and 99,99999999% of the monetary value of product sales in the world are made without any involvement of Amazon. If a company has made themselves dependent on Amazon because they don't want to deal with sales, that is their own problem.
You have no need to fight for the sellers on Amazon. They are shrewd businesses who would prefer nothing more than to spit on you and on their customers, unless they were on fire. Amazon has grown as large as they have by being a middle man who gives better customer service and security to customers than most online shops. There is real value in that goodwill. Of course they charge sellers to let them be on their platform.
And on top of "percent of sales in the world" being the wrong metric, Amazon is approaching a trillion dollars in product sales. The Amazon GDP is bigger than most countries.
> Parity means the price for the end customer, or at the very least the advertised price for the end customer.
If that's the definition, then parity is not automatically a good thing.
If I want to sell my product to different stores for $50 and let them price it how they want, I should be allowed to do that, and no contract should block that competition.
Amazon will yell at you and threaten your sales if another store drops the price, even if you had no involvement.
> Ideally the benefit is mutual. Usually the benefit has to be mutual for business to be made.
And Amazon is so powerful it's absorbing 90% of the benefit and suppressing the competition that would change that. That's bad.
> They are shrewd businesses who would prefer nothing more than to spit on you and on their customers, unless they were on fire. Amazon has grown as large as they have by being a middle man who gives better customer service and security to customers than most online shops. There is real value in that goodwill.
Amazon has been spending a lot of that goodwill, and they could be just as good to customers without inflating prices and squeezing their suppliers so hard.
Your average business with a real brand name might even care more about their reputation than Amazon does. You're coming across as ridiculously infatuated with Amazon if you think they're that far above the average company.
It would. That's why they're still on Amazon. That's why Amazon is charging them. That's business and running a company means competing in business.
Companies aren't people. They don't deserve any empathy. They have to compete in an antagonistic environment against other companies for the benefit and mercy of receiving the customer dollar. That's how it is supposed to be in order to benefit customers.
At most, businesses who deserve our empathy and a bit of slack should be local businesses who employ people where we live.
You argue that because Amazon is a big company they have some kind of outsized influence. In the market of consumer goods they are just a dwarf compared to the total size of the market. And they have competitors who are also giant and perfectly capable of competing in every space they operate. Nobody likes Amazon. I certainly don't like them, but I use them when it is beneficial for me as a customer.
> If I want to sell my product to different stores for $50 and let them price it how they want, I should be allowed to do that, and no contract should block that competition.
You aren't selling your product directly to Amazon. You are using them as a marketplace / sales service for selling your products to customers. If you were selling your product to Amazon directly, then there shouldn't be any price parity contract, I agree.
> Amazon will yell at you and threaten your sales if another store drops the price, even if you had no involvement.
In practice I wonder how these situations pan out. Like you say, it is impossible for a seller to control how other stores price the item.
This isn't about empathy for corporations. I'm being overcharged because of these policies, because I'm effectively forced to pay the Amazon overhead no matter where I buy. I don't like wasting my money.
> They have to compete in an antagonistic environment against other companies for the benefit and mercy of receiving the customer dollar. That's how it is supposed to be in order to benefit customers.
And this version of price parity makes it much harder for other storefronts and marketplaces to compete.
> In the market of consumer goods they are just a dwarf compared to the total size of the market.
Their share of online consumer goods gives them tons of power. Half a trillion dollars is not weak here.
> You aren't selling your product directly to Amazon. You are using them as a marketplace / sales service for selling your products to customers. If you were selling your product to Amazon directly, then there shouldn't be any price parity contract, I agree.
And so the loophole is built.
In a marketplace setup, enforcing a version of price parity that keeps the same end price regardless of fees causes bad results.
> In practice I wonder how these situations pan out. Like you say, it is impossible for a seller to control how other stores price the item.
From what I've seen it's very effective. Beg/threaten that store to increase prices, likely drop your Amazon price to unsustainable levels in the mean time so you don't have to fight later to get Amazon to reattach you to the buy button.