Why isn't there more competition for Amazon?
- Thread starter Craig234
- Start date
RossMAN
Grand Nagus
- Feb 24, 2000
- 79,035
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AreaCode707
Lifer
- Sep 21, 2001
- 18,447
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Amazon is an amazingly diverse company. It'd be hard to compete without being a leader in:
You would not BELIEVE the crazy powerhouses they have in all these areas. Bezos is no slouch; he's build a near-invincible company. The retail business could collapse tomorrow and Amazon would still be a massive force to be reckoned with.
It's impressively still run in a fairly chaotic, decentralized not-quite-entrepreneurial fashion. It's not an easy place to work but it has a far small proportion of lazy and idiotic people than average.
- Online retail
- Streaming
- Data Storage
- Physical goods production (housewares, etc.)
- Insane distribution process
- Reseller marketplace
- Electronics production
- Licensed media
- Produced media
- Billing systems
- Tracking systems
- Pricing systems
- etc
- etc
- etc
You would not BELIEVE the crazy powerhouses they have in all these areas. Bezos is no slouch; he's build a near-invincible company. The retail business could collapse tomorrow and Amazon would still be a massive force to be reckoned with.
It's impressively still run in a fairly chaotic, decentralized not-quite-entrepreneurial fashion. It's not an easy place to work but it has a far small proportion of lazy and idiotic people than average.
KlokWyze
Diamond Member
I heard it was pretty instense to work there... and the pay is NOT that great. Sounds like Walmart or some shit.
So are we saying that the competitive marketplace is obsolete and we should just do nothing while Amazon approaches 100% market share, and that's fine?
These issues always exist to different degrees. Wal-Mart had to take on 100-year old masters of retail, but they did it (while failing in Germany).
At what point does Amazon's dominance start to be bad for consumers while no one can challenge them?
Phokus
Lifer
- Nov 20, 1999
- 22,994
- 779
- 126
Because Amazon is very aggressive with their pricing and have razor thin margins. Very few people want to compete with them. This is actually a strength for them and why they have a much much higher P/E ratio than Apple whose high margins are actually a weakness for them in the long term.
lxskllr
No Lifer
- Nov 30, 2004
- 60,265
- 10,700
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You have an infinite number of choices. No one says you have to buy online. You're also free to compete against them. I suggest finding an under-served niche, and doing it better than Amazon.
AreaCode707
Lifer
- Sep 21, 2001
- 18,447
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The unspoken approach to hiring devs is to hire massively straight out of college, drill all the Dev I and II roles nearly to death, and plan for a high attrition rate. If you reach Dev III you're Amazon material and life gets better (at least, as good as life at a fast-paced tech company ever gets - none of these places are known as cushy employers.)
If you go in as anything other than an entry-level dev it's not quite so bad.
AreaCode707
Lifer
- Sep 21, 2001
- 18,447
- 133
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You asked why they didn't have more competition, not SHOULD they have more competition, or how can we promote more competition.
I think they should have more competition because we as a people should start to value other things than instant gratification, low prices and ease of shopping.
If you value hand-crafted, local goods, buy local. You want interesting music? Buy a ticket to a local band's show, and pick up a cd they made themselves. A serious cultural shift is the only thing that will really make a difference. And that's unlikely to happen on the required level.
Let's say there is another Amazon, or two. So now you pick from three mega-corps who are transcending industry barriers. Is that really better? They'll compete with each other primarily on price and selection, squeezing the goods producers and artists even further, homogenizing selection, increasing over-work, etc. What do we gain as consumers, as a culture, from that?
Let Amazon be Amazon. If you don't like it, change your lifestyle so that you're not part of the demand that they're meeting so well. Break the cycle.
notposting
Diamond Member
- Jul 22, 2005
- 3,498
- 33
- 91
I used them a few times.
Then they got rid of Sabine Ehrenfeld, who wasn't a reason I used them, but she um, well, I liked her. Yeah.
Haven't really even bothered to check them for years when shopping.
RossMAN
Grand Nagus
- Feb 24, 2000
- 79,035
- 443
- 136
They used to be a lot more popular especially for memory foam padding and cheap flat-rate shipping regardless of size/weight.
Your first reply was on-target - I am just discussing how Amazon violates the competitive market we all like to think is how things work. Questions are why/how, and implications.
You raised a fine second issue in this post, that goes beyond what I was discussing, to consumerism more generally. Interestingly that goes back a long time.
JFK made similar comments about problems from a shift in culture to just buying too much crap.
I was going to see if I could find a quote quickly, and ran across this one ironically:
I can't find the Kennedy quote quickly.
videogames101
Diamond Member
- Aug 24, 2005
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SparkyJJO
Lifer
- May 16, 2002
- 13,357
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It's well on the way, given how small the other shares are.
No; having such dominance has importance in our economy.
Competition is a centerpiece of our economy, in theory.
We don't just have Exxon, but Chevron and Shell and others. We don't just have Wal-Mart, but Target and department stores and others. And so on.
Amazon has little real competition - its size is remarkable and raises issues.
It's interesting to look at why what you might expect - other companies to also sell general merchandise on the internet competitively - hasn't really happened.
Amazon's main competition instead seems to just be niche sellers. So it's a good question why there isn't more competition.
707 posted a good start at an attempt to answer - but it implies the days of competition are over.
You seem uninterested in the topic, so not sure why you posted.
AreaCode707
Lifer
- Sep 21, 2001
- 18,447
- 133
- 106
Amazon doesn't violate the competitive market, it's the result of the competitive market. When you're the best competitor you outdistance others. And, for the record, the others still exist. And they still exist as inferior. If you have a problem with that and want to see true similar competition threaten Amazon, buy the same product at a higher price and with slower shipping and convince others to do the same as charity until the competitor is in a position to compete with Amazon (assuming their leadership and strategy and people are equally good or better.) Good luck with that.
Other alternative? To regulate Amazon, pretty much for the sole purpose of destroying their business to force consumers to spend equally even though it would mean higher prices and slower shipping, etc.
If you have a problem with the lack of regulation find an area that needs to be regulated for a good reason and pursue that. It may impact Amazon's business but not for a purely arbitrary goal of damaging them as a company simply because they're the best at what they do.
For the record, I think a lot of the world is better off because of Amazon's internal policies. I listened to a lawyer argue with a goods provider who wanted Amazon to look the other way on their child-labor-produced goods, and the Amazon lawyer telling them that it wasn't a negotiable point; if they wanted to do business with Amazon they had to adhere completely to the no-child-labor clause in the contract. I've seen Amazon go to battle for the right to privacy (not wanting to give up customer purchase history) and the right to free speech (the right for contentious printed material to be sold on their site).
On the flip side, I've seen them go on record AGAINST net neutrality. The people who run that company have a more ethical basis than most I've seen in corporate leadership, and attempt to balance that against the decisions that are in the best interest of their business, when they don't find that a moral violation.
AreaCode707
Lifer
- Sep 21, 2001
- 18,447
- 133
- 106
As an fyi, Amazon considers Wal-Mart their prime competition in the retail space.
KaOTiK
Lifer
- Feb 5, 2001
- 10,877
- 8
- 81
I read an article awhile back talking about it. Basically they get no competition because they priced themselves to have razor thin margins. So a new company wanting to move in has to be willing to make practically nothing on sales to get customers. With the infrastructure Amazon has built up and their buying power they are in a position that they pay the lowest price for an item and its shipping with very fast turn around time. Hard to compete with that when the market leader is willingly living on razor thin margins.
One thing to remember is that Amazon sales also benefit other businesses -- if you buy a CD or a lamp from Amazon, they buy it from someone else and pay that company.
So that 33% is the share of store front sales, not of product sales. It's nothing like the 90% monopoly on desktop OS sales that Microsoft has.
If you go to Amazon to buy a lamp, they offer literally thousands, from dozens of companies. They give you the chance to support any lamp maker you want. If some hand-crafty "artisan" lamp maker wants to they can even sell their lamps through Amazon as a third party seller.
So: competition among lamp makers is massively increased, and consumer choice is massively increased.
The way they dominated in their first product line, books, was by offering buyers a hundred times the selection of a Barnes and Noble brick and mortar store. This helped smaller publishers and niche authors immensely. They now make it easy to by-pass publishers and self-publish your e-book for their Kindle reader, and their Kindle apps that work on almost every device.
Again, a huge increase in the choices we have for products, and (unlike Wal-mart) it's done by having an open and ever-increasing selection of products and companies.
It might get bad if Amazon has 75% of the online store front business someday, maybe. But they don't have the incentive to squeeze lamp makers or shoe companies the way Wal-mart does, because they don't need to have every product priced cheaply. They sell lamps priced from $5 to $500 and let you choose.
So that 33% is the share of store front sales, not of product sales. It's nothing like the 90% monopoly on desktop OS sales that Microsoft has.
If you go to Amazon to buy a lamp, they offer literally thousands, from dozens of companies. They give you the chance to support any lamp maker you want. If some hand-crafty "artisan" lamp maker wants to they can even sell their lamps through Amazon as a third party seller.
So: competition among lamp makers is massively increased, and consumer choice is massively increased.
The way they dominated in their first product line, books, was by offering buyers a hundred times the selection of a Barnes and Noble brick and mortar store. This helped smaller publishers and niche authors immensely. They now make it easy to by-pass publishers and self-publish your e-book for their Kindle reader, and their Kindle apps that work on almost every device.
Again, a huge increase in the choices we have for products, and (unlike Wal-mart) it's done by having an open and ever-increasing selection of products and companies.
It might get bad if Amazon has 75% of the online store front business someday, maybe. But they don't have the incentive to squeeze lamp makers or shoe companies the way Wal-mart does, because they don't need to have every product priced cheaply. They sell lamps priced from $5 to $500 and let you choose.
Puppies04
Diamond Member
- Apr 25, 2011
- 5,909
- 17
- 76
Wasn't there a thread here a few months back linking to an article that explained how amazon basically takes up the "bottom rung" of the ladder by having such thin margins and using its massive buying power to make it almost impossible to start up a rival company without losing a metric fuck ton of money.
Or did I dream that?
Or did I dream that?
earlier thread on this with a link to a great article:
http://forums.anandtech.com/showthread.php?t=2300000
http://forums.anandtech.com/showthread.php?t=2300000
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