The crazy thing is Amazon keeps entering these hyper-competetive, low margin industries. It's pretty tough to cry foul that they are acting like a trust when they constantly position themselves as the third or fourth player breaking up an oligopoly.
Or, if you're cynical, you can say they are playing the long game. Once amazon controls the full vertical for everything, you'd be hard pressed to find anyone else to do business with. Then, they can turn up the money faucet.
Books is a good indicator. We have about 100k+ listings at any given point. We have seen at least 50% of our competitors go out of business since the last rate hike (mid summer).
...you are now paying about $3 more per book and the majority of that now goes to Amazon. Not the third party seller. They raised % taken and also began taking a percentage of shipping fee which is why you see a bunch of third party sellers listing free shipping. Basically they caught up to Ebay in that regard.
"Used" books are not really profitable to sell on Amazon anymore. If you want better prices go to Abebooks.com. Same sellers and generally $2-3 cheaper now.
Your nitpicking is totally unfounded. Oligopoly refers to the state of the market, not the intent of actors within the market. If there's only a few, large firms it's an oligopoly regardless of the reason.
Depends on the definition you’re reading. Google says it’s “a state of limited competition, in which a market is shared by a small number of producers or sellers.”
Limited competition is the lead phrase there. By this definition, parcel delivery is not an oligopoly if it’s competitive.
Well no... His distinction was that oligopoly required intent. And my point is that limited competitors is by definition limited competition.
Really, boiled down my point is that this: "I think people are over-using the word "oligopoly" for any situation where a few companies have most of the market" is really dumb because an oligopoly is any situation where a few companies have most of the market. Perhaps the rise in use of the word oligopoly is reflective of the increase in oligopolistic markets, but it's not due to misuse, certainly not the one he outlined.
You're the one who threw in the word "intent", not TorKlingberg. I would further assume that by "colluding", he didn't necessarily mean explicit cartel behavior, but more typical oligopolistic behavior where the "competitors" inexplicably keep prices stable (or increasing) despite the supposed competition.
I also disagree that limited competitors is the same as limited competition. The two may often be related but don't have to be. When two competitors have razor-thin margins because they're competing aggressively, there isn't a lack of competition. When 10 competitors somehow manage to keep their prices in sync and increase their margins over time, there is a lack of competition even though the number of competitors is high.
But I really don't care to debate definitions further. I chimed in to explain the disconnect between these two views on the meaning of the word "oligopoly". I don't personally care which you prefer.
If one doesn’t believe that a market with only two companies could be competitive, they should consider Uber and Lyft. I wouldn’t be surprised if employees from each dressed up in war paint and brawled a la The Warriors.
