> It's almost impossible to beat Amazon in the supply-chain economics, unless you have a highly specialized product and deals with the manufacturer
Yeah. And the opposite of a highly specialized product is exactly the example the article gave--a piece of metal to hold up your laptop. I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?
I think the consumer can only gain from such entries into the market. AmazonBasic products are often just a standardization of a simple product in a market with too many options. Consumers trust Amazon to deliver on their promises and when confronted with a choice between 800+ USB hubs, I'll choose the cheapest option that is guaranteed to work. There is almost 0 utility for the consumer in choosing a "better" USB hub than AmazonBasic's offering but the downside of choosing a "no-name" hub is measurably significant.
The genius in AmazonBasic concept was in realizing that building the better mousetrap doesn't always mean building the best mousetrap, it means building the best mousetrap for the price. There are so many goods with a market that falls into just two categories, ones that work and ones that don't. Whichever brand is able to gain consumers trust in knowing their offering will work will quickly rise to dominate such a market.
I'm curious how you know what's good for consumers more than they do. Would you mind explaining why it's bad for cost-cutting consumers in the long run?
Seems like amazon is content to run razor thin margins, and if they jack up the price after competitors go out of business, that move would recreate a market for item X and burn some Amazon good will.
I also find the Amazon branding on that laptop stand to be really tacky, though!
Ostensibly this kind of obvious copying is the sort of thing that design patents are supposed to thwart.
Re: why - It's really basic monopoly theory - squeeze out competition, then raise prices. Are you certain that Amazon will always be content to run razor thin margins? At some point Amazon will have subsumed the buying habits of the consumers long after Rain is dead and buried. Will someone new really come along?
I have one of these at work (and my colleague one of the name brand articles) - you don't see the branding on either one 99% of the time, because your laptop is covering it.
Ultimately, it is just a laptop stand, and it's a quality one. I'm just surprised that it took Amazon to come up with a lower priced competitor - I've been looking for something that wasn't $50 for a long time. All of its competitors other than Amazon are overpriced, flimsy pieces of plastic.
There's also a certain amount of acknowledgement that you're not going to get the best or perfect product for the price that you pay Amazon, but you will get better service (that is, replacement/refund) than you're likely to get from TJ's Wholesale Emporium or a random individual seller on Amazon.
> I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?
The thing you stand to lose is the original making of that product.
While making the laptop stand is "simple" (and I object to that statement as manufacturing anything is rarely "simple"), getting it in front of people, marketing it, and selling it is not. Amazon sits back and looks for any products that now sell over $X million dollars and then simply walks in.
So, now if I'm a manufacturer, I will do several things:
1) I might avoid Amazon. Ever. Decreasing choice on Amazon certainly hurts the consumer, no?
2) I might make a shitty product specifically for Amazon to sell so it doesn't cannibalize my good product. I hope you like wading through even more crappy products on Amazon. That hurts the consumer, no?
3) I might simply not make the product. If I think that Amazon might clone me, I either might not develop the product or I might artificially restrict the sales if I know that Amazon flags products above "n units sales or $m total revenue".
> The thing you stand to lose is the original making of that product.
I would argue that Amazon Basics is filling the niche between quality premium and questionable cheap products with reliable products at a fair price.
If you want a Lightning cable for your iPhone what are your choices? A $1 part from an unknown Chinese factory that might work, or the $29.99 cable from Belkin, Griffin or Monster that will work? You know the cheap cable is a roll of the dice but you can't stomach the alternative either. That's where Amazon Basics comes in, it's the Toyota Carolla of whatever it is you're looking for.
It's not like Amazon is edging out anyone, they're offering products in categories that are over saturated with thousands of competing choices and no way for a customer to distinguish a good deal from a rip off.
Would that be handled like most certification processes where the business applies for certification and pays a fee? Or where Amazon randomly selects vendors and tests them, the later seems like it would be more costly than sourcing the products yourself.
IMO the second one would be almost impossibly difficult at Amazon's scale. It would have to be the first. And of course that means setting the price so that they can handle the amount of incoming requests, which means it will eliminate some smaller groups. But i feel like if i were a creator of something, i'd want to pay the money to get it "certified" rather than amazon copy it.
First off, "simple" is relative. A laptop stand is relatively simple, that's just what it is.
So, you're saying we stand to lose original making of products that are easy for Amazon to copy. That's exactly what I'm saying isn't that important.
You point 3 is what you should do if your product is not innovative or cannot compete with a generic AmazonBasics version. If it's truly better, or complex enough that it simply won't be copied by Amazon, then make it and you won't have issues.
If Amazon is the only company willing to make a product, that gives them a monopoly by definition. When have consumers benefited when they only have one choice?
I actually just bought the Rain stand for my rMBP a week ago, and have to say that I'm impressed with the industrial design. Sure, it's just a laptop stand, but it's solid aluminum and has solid design principles - it's a heavy piece of metal that looks and functions well enough it could have been designed by Apple and Jony Ive himself.
I'm fairly certain the AmazonBasics stand isn't the same quality, but that's not really the market they're going for. They're going for good enough and cheap - AmazonBasics cables are a good example of this - they're not high end, but they're affordable and when you just need an HDMI cable, they work fine.
Honestly, Amazon is in the perfect position to compete with their partners like this, and I don't see the harm. If anything the customer experience is even better because we now have reasonable low-priced options to buy that might not have been there before.
I have the Amazon one, my colleague the Rain version. When your laptop is on it, you can't tell the difference between the two.
Yes, it's steel instead of Aluminum, which means it weighs around 3 lbs instead of the Rain's 2 lbs (it's thick). Otherwise, it functions perfectly well as a laptop stand, which is all I really wanted out of it.
I also bought a different, brand-name stand for my rMBP. I'm one of the people who are willing to pay extra for a product because it looks better. I don't think Amazon is threatening higher-price/lower-quantity products that are truly outstanding (much better looking, much better quality). These make more money off of one sale, and have a smaller market. The more complex the product is, the easier it is for a company to set their version apart from the AmazonBasics one. I think they're only threatening those that are simply "easy enough" to copy without losing functionality and utility. The laptop stand is very close to the "easy enough" part of the spectrum. Things like USB hubs and ethernet cables, even closer.
Same. I'm not swayed by price. It's the build quality and materials that matter most to me. While there might be consumers who are drawn to Amazon's laptop stand, I'm willing to assume that the majority of buyers for Amazon's product would not have purchased the pricier options to begin with.
See: Walmart's Great Value brand products. Walmart has used it for a long time to hold consumer prices in check. If Nabisco attempts a large price hike, Walmart deploys their Great Value brand right next to said Nabisco product and undercuts them down to a price they regard as reasonable. Despite Walmart's extreme size and market dominance in traditional retail over the last ~20 years, they've never used - at a wide scope - their Great Value brand as an opportunity jack up prices or destroy competitors.
That's super unlikely to happen. At least with a product like this. Jacking up the price would just encourage other manufacturers to do the same as Amazon: release a cheaper product. What Amazon has done is best for the consumer.
No, the biggest risk is that Amazon will kill innovation by reducing the expected returns to product development expenditures so that investment in product development is reduced.
But there's nothing innovative about the original versions of the AmazonBasics products. That's why they're called AmazonBasics. I'll agree with you when we have an AmazonBasics car or smartwatch, which turn will change the entire paradigm and probably won't happen.
If that was true, that wouldn't need to free ride on other peoples product and market development. Yeah, it's not the flashy big-picture innovation that goes into inventing whole new product categories -- but it has a cost and provides values, and if Amazon is swooping in to eat the returns of other firms investments, they destroy the incentive to make the ivestments, and improvements in the product categories at risk will be impaired.
Yeah. And the opposite of a highly specialized product is exactly the example the article gave--a piece of metal to hold up your laptop. I don't think there's anything we stand to lose from this happening to products so simple and generic. Or is there?