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"To ward off concerns over margins, Amazon is offering SBA sellers a minimum gross proceed — which guarantees set profit for sellers based on a set selling pric

"To ward off concerns over margins, Amazon is offering SBA sellers a minimum gross proceed — which guarantees set profit for sellers based on a set selling price, even if Amazon lowers the price — for each product. The catch: Amazon wrote in its FAQ about SBA that MGP would be revisited “typically once every six months,” and that brands would have seven days to accept the new MGP, or reject it and deactivate a product from SBA." This is literally price fixing. Furthermore, Amazon hasn't lowered the price of anything not already in-process of technological price changes (like e-readers); if prices are lower it's because the margins shrank, the quality was reduced or the overall tech advanced without Amazons help. Since they've earned literally half of their past 12 years of Net Income in 2018 alone, it's difficult to reason how they have cut the cost of anything while not making money, nor producing products through greater economies of scale than existing suppliers, while acquiring billions upon billions worth of logistics assets, another billions upon billions of business subsidiaries, and somehow had enough free cash flow to create robots, pay decent wages (even for shitty work environments) and still provide Jeff Bezos with enough money to buy almost equal number of businesses under the Bezos Expedition banner. Amazon is a fraud, Jeff was a VP on Wall Street before he became a fake ass tech guru, and he and his cronies have been pumping up the stock price fraudulently as a means of providing cash through the sale of treasury stock and because interest rates have been so low since the financial crisis that investors will let them.

privateSFacct 7y ago
The concern with this and other products is that amazon will drive DOWN margins. THAT is the seller worry / complaint. Driving down margins is not price fixing. Amazon provides a promise that it will pay folks a minimum price for their products, revisited periodically. That is the same thing any other retailer does with their suppliers. Amazon current net profit is 4% of sales. This is actually one of their HIGHEST % of sales net income number in their history, they've historically been at 1-2%. Take healthcare for example. They rarely publish their cash list prices making it extremely difficult to comparison shop, they consolidate local competitors into major network to reduce choice, they adhere to minimum price schedules, they surprise you with all sorts of unexected charges which are difficult to impossible to avoid (out of network charges in an in network hospital). Many of those items are flags of anti-competitive behavior by the way. Amazon has clear pricing, has introduced a marketplace for competition between types of items (including new vs used) etc. When you see folks going after Amazon and not other much clearer issues of competition (false advertising, the health care industry etc) that should raise a red flag. If you look at whether Amazon or the medical industry leads to more consumer bankruptcies, it's not even close. The worry should be that with huge sales volume they can put future potential competitors out of business in spaces like a digital home assistant etc by underpricing their products. Sales of pencil cases etc is not going to be their high margin area, their high margin will be in marketplace / fulfillment and compute fees among others.

privateSFacct 7y ago

The concern with this and other products is that amazon will drive DOWN margins. THAT is the seller worry / complaint. Driving down margins is not price fixing. Amazon provides a promise that it will pay folks a minimum price for their products, revisited periodically. That is the same thing any other retailer does with their suppliers. Amazon current net profit is 4% of sales. This is actually one of their HIGHEST % of sales net income number in their history, they've historically been at 1-2%. Take healthcare for example. They rarely publish their cash list prices making it extremely difficult to comparison shop, they consolidate local competitors into major network to reduce choice, they adhere to minimum price schedules, they surprise you with all sorts of unexected charges which are difficult to impossible to avoid (out of network charges in an in network hospital). Many of those items are flags of anti-competitive behavior by the way. Amazon has clear pricing, has introduced a marketplace for competition between types of items (including new vs used) etc. When you see folks going after Amazon and not other much clearer issues of competition (false advertising, the health care industry etc) that should raise a red flag. If you look at whether Amazon or the medical industry leads to more consumer bankruptcies, it's not even close. The worry should be that with huge sales volume they can put future potential competitors out of business in spaces like a digital home assistant etc by underpricing their products. Sales of pencil cases etc is not going to be their high margin area, their high margin will be in marketplace / fulfillment and compute fees among others.