Why Amazon will (and should) put Performance Bike out of business

[shovelhd]

I work in manufacturing, and we're booming. I believe that specialty manufacturing, not cookie cutter commodity manufacturing, is starting a healthy resurgence in the USA. We shall see.

I wasn't blaming Amazon for economic problems. I'm questioning how a company that is actively displacing workers with automation, and is going after practically every market that is currently supported by retailers, which employ a lot of people, how they are not an anti-trust violation.

AT&T was broken up for far less. They had one product.

[Climb01742]

Originally Posted by shovelhd

I work in manufacturing, and we're booming. I believe that specialty manufacturing, not cookie cutter commodity manufacturing, is starting a healthy resurgence in the USA. We shall see.

I wasn't blaming Amazon for economic problems. I'm questioning how a company that is actively displacing workers with automation, and is going after practically every market that is currently supported by retailers, which employ a lot of people, how they are not an anti-trust violation.

AT&T was broken up for far less. They had one product.

The difference was, AT&T had been an actual, gov't approved monopoly. They had no real competition. Amazon has competition. Walmart, for example. And with Walmart partnering with Google, the future could be more competitive.

Amazon is far from perfect. But it's hard to find many large companies that aren't trying to do more with less. They'll couch it as improving margins, but cutting workers is how most achieve it. Think of the disruption that will occur when self-driving vehicles become real. Would you want to be a truck driver, bus driver, cab driver? Think of all the jobs in newspapers, magazines and advertising that Google and the internet have decimated. 'Creative' destruction of jobs is, sadly, part of capitalism. It's a far bigger topic, but the answer probably isn't changing companies, but changing the fabric of our economic society.

[Mark McM]

According to this Boston Globe article, e-commerce (like Amazon) is creating more jobs than traditional retailers are losing:

https://www.bostonglobe.com/business...hRN/story.html

[oldpotatoe]

Originally Posted by shovelhd

The protest picture concerned wages, but we weren't discussing wages. We were discussing employee count.

We weren't? Or were?

My point is a pile of negative responses when the title says 'walmart' and a teeny fraction if it says 'amazon'..

[fkelly]

Online retailing, Amazon and the like, is inevitable and of course well underway. For many things (not all) it's just more efficient. Google "luddites". Study the evolution of assembly lines in the early 20th century.

That said, the success of Amazon itself is not inevitable. Hundreds of car assembly lines started up in the early 20th century and only a handful survived.

Setting up and maintaining an Internet E-commerce is HARD. I did a minor one for a bike club a decade ago, it is a pain in the ass. I can't imagine how many hundreds or even thousands of programmers and other technical people Amazon has used to develop and support their system. Look at other sites, like say Verizon. Without getting into a litany of complaints they are completely incompetent when compared to Amazon. Or look at Adobe. These are technology and even web development companies but they can't even handle simple things like user registration properly.

Amazon just works. Want to see your orders for the last two years and reorder one item? It's there: maybe two clicks away. Looking at a product and want to read user reviews? One click. Want to see comparable products? A click. Place an order: one click. And so on.

Getting it to work this way is an almost unimaginably complex task. Across the world. 24x7.

[93legendti]

Generally, "big" isn't enough to constitute an anti-trust violation. Thankfully.

I don't know of a case where a seller of goods someone else manufactured was sued for anti-trust. Maybe it has happened or could happen...I don't think it's the same as Apple and Samsung conspiring to fix the prices of their phones. Or, T-Mobile buying up Sprint, ATT and Verizon and then doubling the rates for cell service.


The goal of anti-trust laws is to protect consumers from abuse:

"The main statutes are the Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. These Acts, first, restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Second, they restrict the mergers and acquisitions of organizations that could substantially lessen competition. Third, they prohibit the creation of a monopoly and the abuse of monopoly power."

(It's been a long time since I worked on an anti-trust case, but I can't see the law changing 180 degrees...)


"The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws. On the other hand, certain acts are considered so harmful to competition that they are almost always illegal. These include plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These acts are "per se" violations of the Sherman Act; in other words, no defense or justification is allowed."

https://www.ftc.gov/tips-advice/comp...antitrust-laws

[Gsinill]

Originally Posted by fkelly

Getting it to work this way is an almost unimaginably complex task. Across the world. 24x7.

+100

User experience is probably one of the hardest things to get right.
Link that with the actual physical processes that have to happen in the background like logistics and warehousing...
From an IT perspective, what Amazon has achieved is mind boggling, nobody comes even close IMHO.

The real scary part is that they are not just dominating retail but are also one if not the leading IT service providers:
"In the second quarter, AWS controlled 34 percent of the could infrastructure market, topping Microsoft, IBM and Google combined according to Synergy Research Group.".

Scary!

[marciero]

Originally Posted by Gsinill

+100

...
The real scary part is that they are not just dominating retail but are also one if not the leading IT service providers:
"In the second quarter, AWS controlled 34 percent of the could infrastructure market, topping Microsoft, IBM and Google combined according to Synergy Research Group.".
...

My sense is that AWS is increasingly used by research institutions. And it's not in many cases because these places dont have their own resources. I've spoken with researchers at two leading institutions that have the money and resources to do their computing in-house, but use AWS as standard practice. I was very surprised to hear that, and maybe a little naive. Here you are curing cancer or whatever and you're trusting a glorified supermarket with your precious data and computations. They said it was simply more cost-effective to have AWS handle all that when projects got to be a certain size.

[CunegoFan]

Originally Posted by 93legendti

Generally, "big" isn't enough to constitute an anti-trust violation. Thankfully.

I don't know of a case where a seller of goods someone else manufactured was sued for anti-trust. Maybe it has happened or could happen...I don't think it's the same as Apple and Samsung conspiring to fix the prices of their phones. Or, T-Mobile buying up Sprint, ATT and Verizon and then doubling the rates for cell service.


The goal of anti-trust laws is to protect consumers from abuse:

"The main statutes are the Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. These Acts, first, restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Second, they restrict the mergers and acquisitions of organizations that could substantially lessen competition. Third, they prohibit the creation of a monopoly and the abuse of monopoly power."

(It's been a long time since I worked on an anti-trust case, but I can't see the law changing 180 degrees...)


"The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws. On the other hand, certain acts are considered so harmful to competition that they are almost always illegal. These include plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These acts are "per se" violations of the Sherman Act; in other words, no defense or justification is allowed."

https://www.ftc.gov/tips-advice/comp...antitrust-laws

If you have some time then you might want to read this:

http://www.yalelawjournal.org/note/a...itrust-paradox

[54ny77]

Staggeringly good read.

Thanks for the link.

Originally Posted by CunegoFan

If you have some time then you might want to read this:

http://www.yalelawjournal.org/note/a...itrust-paradox

[93legendti]

Yes. Thank you for confirming my analysis:

"In particular, current law underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets incentivize the pursuit of growth over profits, a strategy that investors have rewarded. Under these conditions predatory pricing becomes highly rational—even as existing doctrine treats it as irrational. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

In order to capture these anticompetitive concerns, we should replace the consumer welfare framework with an approach oriented around preserving a competitive process and market structure. Applying this idea involves, for example, assessing whether a company’s structure creates anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the economics of online platform markets incentivizes predatory conduct and capital markets permit it. More specifically, restoring traditional antitrust principles to create a presumption of predation and to ban vertical integration by dominant platforms could help maintain competition in these markets. If, instead, we accept dominant online platforms as natural monopolies or oligopolies, then applying elements of a public utility regime or essential facilities obligations would maintain the benefits of scale while limiting the ability of dominant platforms to abuse the power that comes with it.

My argument is part of a larger recent debate about whether the current paradigm in antitrust has failed. Though relegated to technocrats for decades, antitrust and competition policy have once again become topics of public concern.459 Last year, the Wall Street Journal reported that “[a] growing number of industries in the U.S. are dominated by a shrinking number of companies.”460 In March 2016, the Economist declared, “Profits are too high. America needs a dose of competition.”461 Policy elites, too, have weighed in, issuing policy papers and hosting conferences documenting the decline of competition across the U.S. economy and assessing the resulting harms, including a drop in start-up growth and widening economic inequality.462 Antitrust even made it into the 2016 presidential campaign: Democrats included competition policy in their party platform for the first time since 1988, and in October of the same year, presidential candidate Hillary Clinton released a detailed antitrust platform, highlighting not only a need for more vigorous enforcement but for an enforcement philosophy that takes into account market structure.463"

[Black Dog]

We are back on the road to feudalism. The blip of economic freedoms and prosperity of the post war era is coming to an end. Income gaps are growing and the new wealth created as economies expand is being taken by the upper income demographic. Compare tax rates across income groups from the most prosperous period (post war) to today and you can see how the flow of wealth has been dammed and diverted.

[dave thompson]

Originally Posted by Black Dog

We are back on the road to feudalism. The blip of economic freedoms and prosperity of the post war era is coming to an end. Income gaps are growing and the new wealth created as economies expand is being taken by the upper income demographic. Compare tax rates across income groups from the most prosperous period (post war) to today and you can see how the flow of wealth has been dammed and diverted.

The rich are getting richer. The rest of us, not so much.

[Climb01742]

Originally Posted by dave thompson

The rich are getting richer. The rest of us, not so much.

True. Because, in part, both political parties now eat at the trough of the donor class.

[mtechnica]

Originally Posted by shovelhd

I work in manufacturing, and we're booming. I believe that specialty manufacturing, not cookie cutter commodity manufacturing, is starting a healthy resurgence in the USA. We shall see.

I also work in manufacturing and my company has recently started doing a LOT of business with Amazon. I'm not even sure how many machines we have shipped to them this year (50+ and who knows how many robots?) because I'm not on that project, but they are basically maxing out our capacity both with the multipack machines and palletizing cells. They are investing heavily and they are not messing around.