Exposing the Dark Side of Amazon

Tucker Carlson
10 May 202423:39

Summary

TLDRThe video script discusses the monopolistic practices of Amazon, as explored in the documentary 'Amazon Market, Power Monopoly.' It features interviews with sellers who claim that Amazon's policies force them to keep prices low, with the threat of losing visibility on the platform if they sell at lower prices elsewhere. The documentary highlights the 'buy box' feature, which is crucial for sales but can be removed by Amazon if a seller's prices are not competitive. Molson Hart, a CEO of an educational toy company, shares his experience of being forced to raise prices due to increased fulfillment fees by Amazon, affecting his profitability and illustrating the platform's control over pricing. The conversation also touches on the challenges of selling on Amazon, the financial breakdown for sellers, and the dominance of Chinese sellers on the platform. The script concludes with a mention of a new service called Public Square, which aims to provide an alternative marketplace for small businesses.

Takeaways

  • 😀 Amazon's marketplace dominance affects sellers' pricing strategies significantly, with strict policies that influence pricing across other platforms.
  • đŸ€” Sellers like Marco Schck feel pressured by Amazon to maintain low prices, and risk losing visibility ('Buy Box') if their products are found cheaper elsewhere.
  • 📉 The documentary 'Amazon: Market Power Monopoly' explores how Amazon's policies create challenging conditions for sellers, leading to reduced profitability.
  • đŸš« Molson Hart discusses the direct impact of Amazon's fee increases on his business, forcing him to raise prices, which affects pricing on other platforms as well.
  • đŸ•”ïžâ€â™‚ïž Amazon employs algorithms to monitor prices across the internet, penalizing sellers on their platform if lower prices are found elsewhere.
  • đŸ·ïž Despite removing certain contractual obligations, Amazon continues to enforce its pricing policies through technological means, maintaining control over sellers.
  • 🔍 The fear of retaliation and contractual constraints deter sellers from publicly criticizing Amazon, contributing to a lack of transparency about its marketplace practices.
  • 💰 Amazon's fee structure is highly profitable for the company but leaves sellers with a small fraction of the sale price after deducting various fees.
  • 📊 Over 50% of top sellers on Amazon are non-American, with a significant portion being Chinese, indicating a shift in who profits most from Amazon's platform.
  • đŸ€ Molson Hart uses a pseudonym to discuss his experiences and challenges with Amazon openly, highlighting the personal risks sellers face when criticizing the platform.

Q & A

  • What is the documentary 'Amazon Market' focused on?

    -The documentary 'Amazon Market' is focused on examining Amazon's business practices and how they impact the people who try to make a living by selling their products on the Amazon platform.

  • How does Amazon enforce its pricing policies on sellers?

    -Amazon enforces its pricing policies by monitoring the prices of products on and off Amazon through an algorithm and potentially through user reports. If a seller is found to be selling their products cheaper on another platform, Amazon can punish them by making their products hard to find by removing their 'buy box'.

  • What is the 'buy box' on Amazon?

    -The 'buy box' on Amazon is the area on the product page where customers click to add the item to their shopping cart. It is a crucial feature as without it, customers tend to leave and purchase the item elsewhere.

  • How does Amazon's fee structure impact sellers?

    -Amazon's fee structure significantly impacts sellers by taking a substantial portion of the retail price. This includes a commission fee, fulfillment fees, and additional costs for advertising, storage, and shipping, which can reduce the seller's profit margins.

  • What challenges do sellers face when selling on Amazon?

    -Sellers face challenges such as Amazon's pricing policies, high fees that reduce profit margins, the risk of losing the buy box if they sell cheaper elsewhere, and the pressure to keep prices low to remain competitive on the platform.

  • Why do some sellers find it difficult to speak out against Amazon?

    -Sellers may find it difficult to speak out against Amazon due to fear of retaliation, such as losing the buy box or being de-listed, as well as contractual obligations that prevent them from making public statements about Amazon without permission.

  • What is the impact of Amazon's policies on the broader economy?

    -Amazon's policies may contribute to a shift in the economy, with Chinese manufacturers and sellers gaining a significant advantage due to lower costs, proximity to production, and less susceptibility to lawsuits. This could lead to a decline in the U.S. wholesale distribution and product design industry.

  • How does Amazon's dominance affect the pricing on other platforms?

    -Amazon's dominance in the online marketplace can influence pricing across the board. Sellers are often forced to keep their prices high on other platforms to avoid losing sales on Amazon, which can lead to higher prices for consumers.

  • What is Public Square and how does it differ from Amazon?

    -Public Square is a new service designed as an alternative to Amazon, catering to small businesses looking to sell handcrafted goods, guns, ammo, fresh food, and household essentials. It aims to provide a marketplace that supports small businesses and offers a different approach to commerce, distinct from Amazon's model.

  • What are the benefits for sellers to diversify their sales channels away from Amazon?

    -Diversifying sales channels away from Amazon can help sellers reduce their dependence on a single platform, mitigate risks associated with Amazon's policies, and potentially reach a wider customer base through various marketplaces.

  • How do Chinese sellers benefit from selling on Amazon?

    -Chinese sellers benefit from selling on Amazon due to their proximity to manufacturing, ability to iterate on products quickly, lower costs, and reduced exposure to U.S. taxes and legal liabilities.

Outlines

00:00

🛒 Amazon's Business Practices and Seller Challenges

The first paragraph discusses the ease of buying products on Amazon and introduces a documentary called 'Amazon Market Monopoly.' The documentary explores Amazon's business practices and their impact on sellers, particularly how Amazon controls pricing and uses the 'buy box' feature to enforce low prices. It features a German businessman who sells children's beds on Amazon and explains how losing the buy box can significantly reduce sales. The summary also touches on the story of Molson Hart, CEO of an educational toy company, who has to increase prices due to Amazon's fee increases, highlighting the challenges of operating within Amazon's marketplace.

05:02

📊 Amazon's Control Over Pricing and Market Share

The second paragraph delves into Amazon's alleged control over the online e-commerce market, which is estimated to be around 50%. Molson Hart, who is heavily dependent on Amazon for his sales, explains how Amazon's pricing policies affect his business and the necessity to maintain higher prices on other platforms to avoid losing sales on Amazon. The paragraph also mentions a new service called Public Square, which aims to provide an alternative platform for small businesses. It discusses the methods Amazon might use to monitor prices across the internet and the challenges faced by sellers when speaking out against Amazon due to contractual restrictions and the fear of retaliation.

10:03

🚹 The Impact of Amazon's Policies on Sellers

The third paragraph continues the discussion on Amazon's power and how it influences sellers' profitability. It outlines the financial breakdown for a seller's product, revealing that after Amazon's fees, the seller is left with a small profit margin. The speaker, presumably Molson Hart, describes his experience as a witness in lawsuits against Amazon and the difficulties in speaking out against the company due to potential repercussions. The paragraph also raises the question of whether Amazon's dominance constitutes a monopoly and the impact of their policies on consumer prices.

15:07

🌐 International Competition and Amazon's Market Dynamics

The fourth paragraph examines the international aspect of selling on Amazon, particularly the success of Chinese sellers on the platform. It discusses the structural advantages that Chinese sellers have, such as proximity to manufacturing, lower costs, and reduced legal risks. The paragraph also highlights the shift in the global economy, where Chinese manufacturers are now selling directly to consumers in the U.S., bypassing traditional American distribution channels. This has led to a competitive landscape where U.S. sellers struggle to compete with Chinese sellers on price and speed of innovation.

20:09

đŸ€” Future Prospects and Personal Insights from a Seller

The final paragraph touches on the future of selling on Amazon and the personal story of the interviewee, Molson Hart. Despite the challenges, Hart expresses his intention to continue selling on Amazon while also trying to reduce his business's dependence on the platform. He shares his experience of trying to build a successful business amidst Amazon's competitive marketplace and the satisfaction he derives from creating educational toys. The paragraph concludes with a light-hearted note about Hart's name and a broader reflection on the importance of free speech and the role of media in covering significant issues.

Mindmap

Keywords

💡Amazon Market Power Monopoly

Amazon Market Power Monopoly refers to a documentary that scrutinizes Amazon's business practices and their impact on sellers. It is central to the video's theme as it highlights the power dynamics between Amazon and third-party sellers, showcasing how Amazon's policies can dictate pricing and sales volume, as illustrated by the experiences of the German businessman and Molson Hart.

💡Buy Box

The Buy Box is a prominent feature on Amazon's product pages, allowing customers to add items to their carts with a single click. It is a critical element for sales on the platform, as losing the Buy Box can significantly reduce a product's visibility and sales. The video discusses how Amazon can control the Buy Box, effectively influencing a seller's success.

💡Price Control

Price Control refers to the power a marketplace has over the pricing of goods sold within it. In the context of the video, Amazon is accused of controlling prices not just on its own platform but also on other sites, which can force sellers to maintain higher prices everywhere to avoid penalties on Amazon. This is a key issue in the documentary, as it raises questions about fair competition and monopoly practices.

💡Fulfillment Fees

Fulfillment Fees are the charges that Amazon imposes on sellers for storage, packaging, and shipping of their products. The video discusses how an increase in these fees can force sellers to raise their prices to maintain profitability, which in turn affects the consumer and can lead to a loss of the Buy Box if prices are not competitive on Amazon.

💡Monopoly

A Monopoly is a market condition where a single company dominates the market to the point where it can control prices and exclude competition. The video explores whether Amazon's practices constitute a monopoly, given its significant control over online commerce and its ability to enforce pricing policies that affect sellers on other platforms.

💡Public Square

Public Square is mentioned in the video as an alternative platform for commerce that is positioned as a response to Amazon's dominance. It is presented as a marketplace for small businesses to sell their products without the constraints and fees associated with Amazon, offering a more democratic and diverse commercial environment.

💡Algorithmic Pricing

Algorithmic Pricing refers to the use of algorithms to automatically set or adjust prices based on various market factors. The video suggests that Amazon uses such algorithms to monitor prices across the internet and ensure that sellers do not offer their products at lower prices on other platforms, which can lead to penalties like the loss of the Buy Box.

💡Non-Disclosure Agreement

A Non-Disclosure Agreement (NDA) is a legal contract that establishes a confidential relationship between parties. In the context of the video, sellers on Amazon are bound by such agreements, which can prevent them from publicly discussing their experiences or Amazon's business practices without explicit permission, contributing to the difficulty in shedding light on Amazon's market control.

💡Chinese Sellers

Chinese Sellers are highlighted in the video as being particularly successful on Amazon, with a significant number of top sellers being Chinese companies. This success is attributed to various factors, including lower costs, proximity to manufacturing, and potential government subsidies. Their prevalence on the platform raises questions about the impact on American businesses and the global e-commerce landscape.

💡Vertical Integration

Vertical Integration is a business strategy where a company owns or controls several stages of the production or distribution process. The video discusses how Chinese manufacturers are vertically integrating by selling directly to consumers on Amazon, which can put traditional American wholesalers and distributors at a disadvantage due to the reduced costs and increased efficiency of the Chinese sellers.

💡Profit Margin

Profit Margin is a financial metric that shows how much profit a company makes for every dollar of revenue. In the video, the low profit margin for sellers on Amazon is exemplified by the case of a seller who makes only $3 to $4 on a $17 product after all Amazon fees are deducted. This underscores the financial challenges faced by sellers and the high costs associated with selling on the platform.

Highlights

Amazon's business practices and policies are examined in the documentary 'Amazon Market, Power Monopoly', which reveals the struggles of sellers on the platform.

Sellers on Amazon are pressured to keep prices low to prevent customers from buying the same product on other sites like eBay.

Amazon can punish sellers who sell cheaper on other sites by removing their 'buy box', making their products hard to find.

The 'buy box' is the purchase area on a product page; without it, customers tend to leave and buy elsewhere.

Amazon's control over pricing can lead to a loss of 95-99% of sales if a seller loses the buy box.

Amazon's fee increases force sellers like Molson Hart to raise prices, affecting profitability and market competitiveness.

Sellers are forced to maintain higher prices on other platforms to keep the buy box on Amazon, which is not a free market tactic.

Amazon's market share and pricing policies can influence the broader online commerce market, potentially resembling a monopoly.

Amazon's algorithm monitors prices on and off the platform to ensure sellers don't offer lower prices elsewhere.

Sellers face challenges in speaking out against Amazon due to contractual obligations and fear of retaliation.

Amazon's dominance in the media space, including owning platforms like Prime Video, can affect how it is portrayed in documentaries.

Amazon's fulfillment fees and commissions significantly reduce seller profits, with some keeping as little as $3-$4 from a $17 product sale.

Despite the challenges, some sellers, particularly those from China, still manage to thrive and get rich selling on Amazon.

Chinese sellers have structural advantages on Amazon, including lower costs, faster product iteration, and reduced legal risks.

The shift of manufacturing to China has led to a vertical integration that threatens the U.S. wholesale distribution and product design industry.

Molson Hart, a seller and interviewee, has had to reduce dependence on Amazon by diversifying sales channels.

Hart's experience as a witness in lawsuits against Amazon has been time-consuming and expensive, highlighting the power dynamics.

The interview concludes with a discussion on the importance of free speech and the challenges of reporting on powerful entities like Amazon.

Transcripts

00:00

buying products on amazon.com is a

00:02

little bit like masturbation not

00:04

everybody admits to it but honestly you

00:07

suspect it's pretty common it's just so

00:09

easy but what exactly does amazon.com do

00:13

how did Jeff Bezos get so rich the

00:15

details are unknown to most people even

00:18

frequent users of the site well new

00:20

documentary takes a closer look at what

00:22

Amazon does at its business practices

00:25

and what those practices do to the

00:27

people who try to make a living selling

00:28

their products on the site the

00:30

documentary is called Amazon Market

00:33

power Monopoly so the filmmakers

00:35

interview Amazon sellers who say they

00:37

are barely keeping their heads above

00:39

water because of the company's policies

00:41

and those policies tell them exactly how

00:43

much they can charge for their own

00:44

products so take a look at this clip

00:46

from the movie it shows a German

00:47

businessman who makes and sells

00:50

children's beds and does nearly all of

00:51

his business on

00:53

amazon.com he says the company puts

00:55

pressure on him to keep his prices low

00:56

as low as possible to keep customers

00:58

from buying that same product on another

01:00

site such as eBay if Amazon finds out

01:03

that he's selling his products cheaper

01:05

on another site like eBay they will

01:07

punish him by making his products very

01:09

hard to find on Amazon and they do this

01:12

by taking away what is called his buy

01:14

box the buy box is the area you click on

01:16

the product page to make a purchase if

01:19

there's no buy box customers tend to

01:21

leave and buy it somewhere else that

01:24

sounds confusing watch the man

01:26

demonstrate exactly how this is done his

01:29

most important important online shop

01:30

window at Amazon the so-called buy box

01:33

the framed box around the shopping cart

01:38

field so this whole box here that's just

01:41

called the buy box and you can see the

01:43

add to cart button here and if I click

01:46

on it now then I have this in the

01:47

shopping cart and I can buy the

01:51

item but Marco shck can also lose the

01:54

buy box for his beds for example if his

01:56

prices are not competitive

02:00

that means for me with buy box I can

02:01

sell without buy box 95 to 99% of the

02:05

sales are

02:07

gone who gets the buy box is decided by

02:10

Amazon alone Marco shock shows

02:14

us

02:16

so I'm going to change the price to

02:21

€349 and we will see that in about 15

02:24

minutes the buy box here is

02:27

gone and indeed after 15 minutes the buy

02:31

box has disappeared for customers it now

02:33

seems as if the item is not available at

02:35

the

02:36

moment in other words Amazon decides

02:40

what you charge for your products and if

02:41

you don't obey they will shut you down

02:43

but in the most passive aggressive

02:46

Corporate Way they just remove your buy

02:48

box it's fascinating there's a lot like

02:50

that in this film it goes on to follow

02:52

the business of a man called Molson Hart

02:55

he's a CEO of an educational toy company

02:57

that does most of its business on Amazon

02:59

the film crew was there when Hart

03:01

learned that Amazon would once again

03:03

raise its fees on him so in order to

03:05

turn a profit he was forced to Jack his

03:07

prices watch we

03:09

are probably going to have to raise

03:12

prices why what's going on so uh what

03:15

they what Amazon did is they uh

03:18

increased all the Fulfillment fees by

03:20

about

03:21

5% so

03:23

um if you look over here uh we got an

03:26

email uh shipping brain FL is going to

03:29

be 5% more

03:32

expensive now the Texan has to

03:35

recalculate in order to keep our profits

03:37

at the same level we're going to have to

03:38

raise the price by you know 50 cents so

03:42

maybe we're going to go to

03:44

$77.99 um up from $6.99 and the problem

03:49

if he increases on Amazon he must also

03:51

increase the prices of his products on

03:53

eBay Walmart and even in his own web

03:55

store although they are not affected by

03:57

the fee increase if he doesn't do that

04:00

experience shows that he loses the buy

04:02

box on

04:04

Amazon oh so it's not really a free

04:07

market tactic if they're forcing you to

04:09

raise your prices on other platforms

04:13

it's a monopoly tactic and there's a

04:15

difference that's not the free market

04:17

you just saw that's how monopolies

04:19

operate Molson Hart knows that very well

04:21

he's lived it he's the man you just saw

04:22

in that clip and he joins us now molsen

04:24

Hart thanks for joining us the clip we

04:26

just played is a fair representation of

04:28

your life as an Amazon Seller

04:30

yeah that's absolutely a fair

04:31

representation of our life as an Amazon

04:34

Seller um if your products are cheaper

04:37

off Amazon than they are on Amazon then

04:40

you lose all your sales on Amazon which

04:43

is a big problem for us because 90% of

04:45

our sales come from

04:47

Amazon so what you're saying I think is

04:50

that Amazon sets the price Market wide

04:53

not just on its own site but on other

04:55

sites so that's is is that correct

04:59

in a way that's true right so if you

05:01

look at the statistics and a lot of

05:03

people have a different St statistics

05:04

out there that Amazon controls roughly

05:07

50% of the whole online e-commerce

05:09

Market depending on how you calculate it

05:12

and for us since 90% of our sales come

05:15

from Amazon and since Amazon is more

05:18

expensive to sell on than other

05:20

platforms like eBay Walmart or even our

05:23

own website Amazon in a way kind of does

05:26

set the price because if we price our

05:28

products lower off of Amazon

05:30

because those um those off Amazon

05:33

platforms are cheaper than Amazon we

05:35

lose 90% of our sales on Amazon so we

05:39

have to constantly keep our prices up

05:42

off Amazon and we can't we can't lower

05:45

our prices on Amazon to the costs off

05:48

Amazon because then we'll end up losing

05:50

money because Amazon is more expensive

05:52

to sell on than it is to sell on off

05:55

Amazon it's fascinating thanks for

05:57

watching the episode with molsen Hart

05:59

and giv gives you a sense of what Amazon

06:00

is really like worse than you thought so

06:04

if you don't want to use Amazon and up

06:06

till now you haven't had much of a

06:07

choice cuz it's effectively a monopoly

06:10

well now you don't have to because

06:11

there's an option a new service made for

06:14

you it's called Public Square and

06:16

they're building a brand new way of

06:18

conducting Commerce selling and buying

06:21

that goes back to America's Roots so far

06:24

they have over 75,000 small businesses

06:27

from this country offering their product

06:29

and services so if you're a small

06:31

business owner hoping to sell

06:33

handcrafted Goods guns ammo fresh food

06:37

household essentials whatever Public

06:39

Square is perfect for you it's a great

06:41

place to do that to sell what you make

06:43

it's also a great place to buy what

06:45

other people make and it's easy you can

06:47

add your business in less than 10

06:49

minutes for free and sell your products

06:52

Nationwide to learn more go to Public

06:55

Square Tucker they're a sponsor of this

06:58

program and we're happy to have them

06:59

proud in fact so if I can just ask a

07:02

stupid question how does Amazon know

07:04

what you're doing off

07:06

Amazon yeah that's a great question so I

07:08

think they do it two different ways the

07:10

primary way they do it is basically by

07:12

using an algorithm that just like

07:14

scrapes the entire internet looking at

07:16

prices on Walmart looking at prices on

07:18

eBay and in in the video that you showed

07:21

in the documentary that's how uh Amazon

07:23

was able to shut down that person's

07:25

product so fast within 15 minutes so the

07:28

algorithm is kind of like monitor during

07:29

the whole internet to see if prices are

07:31

higher or lower on and off Amazon and it

07:34

it might also be possible for there used

07:36

to be like a button on pages on Amazon

07:39

where consumers could report like a

07:40

better price elsewhere so there might be

07:42

like a a human component as well but

07:45

it's mainly just an algorithm where

07:46

they're watching prices on and off

07:48

Amazon but they know when you've been

07:50

sleeping they know when you're awake I

07:51

mean this it's like they're part of the

07:54

surveillance data I mean there you

07:55

wouldn't imagine because you're selling

07:57

on Amazon that Amazon would be watching

07:59

your behavior in other places

08:01

right yeah to my mind it's totally

08:04

unnecessary and there's there's no need

08:06

for this policy um they used to

08:08

contractually enforce this so there used

08:11

to be a line in the contract that seller

08:13

signed with Amazon that would say that

08:14

you would not sell your products for

08:16

Less off Amazon and then there was like

08:18

kind of like a regulatory Kur fuffle in

08:20

Europe um and they ended up removing

08:23

that from their contracts but then they

08:25

maintained the policy um algorithmically

08:29

and um in 2019 I I wrote an article

08:33

about it and I can kind of explain why

08:36

it's so hard to get these kind of

08:37

narratives about Amazon but I wrote an

08:40

article about it and that article ended

08:41

up getting wrapped up into some into

08:43

like an FDC lawsuit the state of

08:45

California versus Amazon and that's why

08:47

we're talking about it

08:49

today what just back up a sentence if

08:52

you would what do you mean it's so hard

08:54

to get that story

08:56

out so like as I said right % of our

08:59

sales come from Amazon and um no one in

09:02

their right mind uh like wants to bite

09:05

the hand that feeds them right so the

09:07

people who know most about Amazon are

09:09

the sellers who are selling on Amazon

09:12

like like my company right and so we're

09:14

when people speak up you're you taking

09:16

you're taking some risk I I try to be

09:18

fair regardless of whether or not I'm

09:20

being critical of their policies I think

09:22

they're a good company with great people

09:24

with some some bad policies right so

09:26

don't want to bite the hand that feeds

09:27

you and then the second thing is my

09:29

company you know all companies that sell

09:32

on Amazon they signed a contract that

09:34

says that you know you're not going to

09:35

make public statements about Amazon

09:36

you're not going to speak to the pess to

09:38

the Press without um Express written

09:40

permission from Amazon right so those

09:43

are two reasons for the people who know

09:46

most about Amazon to not speak about

09:48

Amazon and then you also have to

09:50

remember that Amazon is like really big

09:52

in the documentary media space because

09:54

Amazon has its own Netflix right they

09:55

have Prime video they have their own

09:57

Hulu so if you're if you want to a

09:59

documentary about Amazon you have to

10:01

like think carefully about you know

10:03

what's that going to do to your career

10:05

going forward I'm not saying Amazon does

10:07

this but you know you may not be able to

10:08

sell a film or documentary to Amazon in

10:11

the future and so you know those are the

10:14

reasons why it's kind of hard to get

10:15

this information out there how long do

10:18

you think before they get their own

10:19

defense

10:20

department uh defense department like

10:23

the Department of Defense or like lawers

10:25

I mean you're you're descri you're

10:27

describing a company that's lot and of

10:30

course we all sort of know this on some

10:31

level but that's a lot more powerful and

10:33

a lot more willing to flex its power

10:35

than maybe some of us imagined just 10

10:37

years ago well okay so like I I I am a

10:41

witness in I don't know if I'm

10:43

technically a witness but I've been

10:45

pulled into those two lawsuits the FTC

10:48

in a bunch of States versus Amazon and

10:49

then the state of California versus

10:50

Amazon and like generally speaking I can

10:54

say this about my interaction because

10:56

I'm Bound by uh confidentiality in terms

10:59

of what I can say with the lawsuits yeah

11:01

um like it is an attorney's job to

11:05

discredit someone

11:07

who uh doesn't help the the attorney's

11:11

case right and um that is that's pretty

11:16

much what I have been well that is what

11:18

is often experienced in lawsuits of this

11:21

kind and you know I went through 16

11:24

hours of

11:25

depositions um eight hours from the

11:27

state of California eight hours from

11:29

Amazon I spent like you know 20 or 30

11:32

hours collecting documents and it's been

11:33

a very painful timec consuming and

11:36

expensive experience for me Amazon does

11:38

a lot of things but I don't know I mean

11:41

they got the drones but I don't I don't

11:42

think they're selling weapons uh quite

11:44

yet right I well I didn't think they'd

11:46

have a movie studio and be able to

11:47

control coverage of their own company a

11:49

few years ago so you know you never know

11:51

where these things are going molsen Hart

11:53

um but I just wonder since you obviously

11:55

you've thought about this in in larger

11:57

terms cuz you've been in involved or

11:59

witness to these lawsuits mhm I mean

12:01

isn't this aren't we approaching the

12:03

definition of a of a monopoly so

12:05

business is something that controls its

12:07

Silo you know where it operates a

12:08

monopoly is a business that controls an

12:12

entire market and kind of what you're

12:15

describing is a company that just that

12:17

controls

12:18

online Commerce the

12:21

pricing uh Amazon with its weight and

12:25

the the way that they keep on jaming

12:27

fees down sellers throats and this isn't

12:29

just about me as someone who sells on

12:31

Amazon complaining about Amazon's fees

12:33

like these fees end up becoming higher

12:35

prices for you if you shop on Amazon

12:38

right um they uh I don't want to say

12:40

that they control pricing on the entire

12:42

American internet or the countries where

12:44

they operate but you know they're pretty

12:46

you know they they have a lot of weight

12:48

when it comes to where prices are in

12:50

terms of whether or not they're a

12:52

monopoly um you know that's not for me

12:54

to decide that's for the courts to

12:56

decide and like I said before I

12:59

sincerely not just saying it because I

13:00

don't want to get smacked by Amazon I

13:02

mean I don't and but they are a good

13:06

company and they have they have great

13:07

people but they do have some bad

13:09

policies and I think the best outcome

13:12

would be for them to you know stop with

13:14

the bad policies and I wrote an open

13:16

letter to Jeff Bezos on Twitter it got

13:18

some play I think he read it because

13:20

he's responded to me on Twitter before

13:22

or X I should say um and you know I

13:26

think it' just be better if they ended

13:28

the bad policies rather than you know

13:30

potentially being broken up or something

13:32

like that but again that's not really

13:33

for me to decide well they're not going

13:35

to I mean he owns the Washington Post

13:37

which is the main news source in the

13:39

capital city so I don't think they're

13:41

going to be broken up anytime soon and I

13:43

I suspect the post would editorialize

13:44

against that if it came down to it um so

13:47

let let me just a ask you since it's

13:49

your business since you're in this

13:50

business who makes money selling an

13:54

Amazon uh

13:56

Amazon yeah um so

14:00

like uh for us right so we have a one of

14:03

our best sellers is brain flakes I got

14:05

my prop it's $17 okay right on Amazon

14:08

right now and um after all the fees are

14:11

paid we get seven out of the

14:14

$17 okay so it's $70 on Amazon after the

14:17

fees are paid we receive seven with that

14:19

$7 we have to pay rent Insurance um all

14:24

employees and then we also have to pay

14:25

for the cost of the product wait wait

14:27

wait oh wait so the the $10 you're

14:30

subtracting from the 177 does not

14:31

include your manufacturing costs

14:34

or correct yeah so you start at 17 10 of

14:38

those dollars and I can run through the

14:40

fees would you mind well because that's

14:42

that's a crazy number yeah let's do it

14:44

yeah yeah do you want me to break down

14:47

how yes I mean wait hold on I'm just I'm

14:50

I'm a little bit surprised I mean I

14:52

thought they took a vig of some kind and

14:53

they should it's they're selling your

14:55

product for you that's great M but the

14:57

fact that they would take the majority

15:00

of the retail price is stunning to

15:03

me well it's it's more than the majority

15:06

and you have to remember that we are not

15:08

selling to Amazon we are selling on

15:11

Amazon so all the risk is with us if the

15:13

product doesn't sell Amazon has no risk

15:16

they can actually just continue to

15:17

charge us fees not only that they'll

15:19

charge us like extra double fees for

15:21

having too much inventory at Amazon so

15:24

yeah at the risk of embarrassing myself

15:26

on your show I will attempt to do some

15:28

math and I'll tell you how we go from

15:30

$177 down seven all the way down our

15:32

profit yeah let's do it all right so $17

15:36

first in our category in toys Amazon

15:38

charges

15:40

15% okay so that's

15:43

um8 so let's call that around 250 okay

15:46

so 15% of $17 so now I'm down to

15:51

$450 okay then we have to pay a

15:53

fulfillment fee to Amazon that's around

15:57

$660 so I think 450 ,450 so that gets me

16:01

to eight that gets me to

16:05

$7.90 okay so just those two things the

16:08

the 15% commission and then the

16:11

$660 fulfillment fee that Amazon charges

16:15

um I believe got me down to uh

16:19

nine I I'm embarrassing myself but

16:21

something like the high sevens yes and

16:24

then we have to pay advertising and

16:26

storage and shipping to Amazon and that

16:31

gets us down to around $7 okay so we

16:34

receive $7 when one jar of brain flakes

16:38

is sold and with that $7 we have to pay

16:42

our rent our employees salaries our

16:46

insurance we even have to pay for we

16:48

have to insure Amazon as well okay and

16:50

then we have to pay for the cost of the

16:52

product which is like let's say $350 so

16:55

on the $17 we'll make depending on what

16:58

our costs are because costs go up and

16:59

down between three3 to four doar so our

17:02

profit is about3 to $4 out of the $17

17:06

and they are like all sorts of crazy

17:07

fees I could walk you through it it's

17:10

wild that is amazing that's not at all

17:14

what I imagined at all so the the the

17:18

the strong majority goes to Amazon right

17:21

off the top so then who how how could

17:24

you make a living do it I mean how many

17:25

brain flakes do you have to sell to like

17:28

take a week off and go to Disney World

17:30

in

17:32

August um Disney World's pretty

17:34

expensive you know we we're lucky to to

17:37

sell hundreds of thousands of jars of

17:38

brain Flakes and bigger sets and so if

17:41

we're making three to four dollars uh a

17:45

jar or or whatever you know and if you

17:48

sell $100,000 you can you do have money

17:51

to pay salaries and rent and all that

17:53

stuff and you can maybe go to Disneyland

17:56

uh once every two years I would say does

17:58

anyone get rich selling that you know of

18:01

get rich selling on

18:02

Amazon yeah people people still do get

18:05

rich um I think a lot of Chinese

18:08

companies have gotten rich as well um

18:10

pretty crazy statistic for you over

18:14

50% of the top sellers on Amazon are not

18:20

American okay so so in the US

18:24

Marketplace like let's say 52% of the

18:27

sellers are non- American and of that

18:29

52% the the top sellers are that of that

18:32

52% they're predominantly Chinese and

18:36

the Chinese sellers even though we're

18:37

selling in the United States even though

18:39

it's our country we should understand

18:41

how marketing works here it's our

18:43

language they they they just clean up

18:45

they do very well in terms of market

18:47

share they don't all make money but many

18:49

of them do um it's still possible to

18:52

make money on Amazon you're not even

18:54

describing the source of manufacturing I

18:56

mean I think the number would be a lot

18:57

higher than 52% if you were if you were

19:00

measuring where the stuff was actually

19:01

made but you're talking about the

19:03

sellers yeah that that's such an

19:05

excellent point so if you go back to

19:07

like the 1970s 1980s we had a lot of

19:10

manufacturers in our country we were

19:12

making things all those factories

19:14

shifted largely to China some to Mexico

19:17

overseas generally what's going on now

19:20

is that the Chinese and other countries

19:23

to some extent are kind of vertically

19:25

integrating and they're taking over the

19:28

the product design and wholesaling and

19:32

distribution that had traditionally has

19:34

been in the United States so once upon a

19:37

time you know you could buy from an

19:39

American Factory okay and the American

19:41

Factory would sell its product to an

19:42

American Store whatever and then we had

19:45

this transitional period where Chinese

19:46

factories were selling to Distributors

19:49

who were selling to stores or Chinese

19:50

factories were selling to Target or

19:52

whatever what's happening now is the

19:53

Chinese factories are selling directly

19:57

on Amazon on two US consumers and the

20:01

net result of this because the playing

20:03

field is uh in the Chinese favor and I

20:06

can kind of explain why is that the US

20:09

like wholesale distribution product uh

20:13

design industry has come under threat

20:15

from very tough difficult competition

20:19

from China and so now like we lost our

20:22

factories and in my opinion I think

20:24

we're going to lose this middle part of

20:26

our economy um largely to companies in

20:31

China how does how does China have a

20:33

structural advantage in

20:35

this so for one um these Chinese sellers

20:39

they're selling on Amazon they don't

20:41

have to file us uh income tax returns

20:44

they don't have to worry about estimated

20:45

taxes like like we do um they're close

20:49

to the factory so they can iterate on

20:51

products much faster they have lower

20:54

costs and um you know that's enough uh

20:59

they're less susceptible to lawsuits

21:01

because they're overseas and it's just

21:04

you know they may or may not have

21:05

government subsidies or just like I mean

21:07

think about it if you want to design a

21:08

new product isn't it a lot easier to

21:10

like go down the street to the factory

21:11

talk to the guy work that out than it is

21:13

to like communicate over video fly to

21:15

China deal potentially with a quarantine

21:17

and work that out in order to make

21:19

something new so the Chinese have a lot

21:21

of um advantages when it comes to

21:22

selling on Amazon and what's Wild is

21:24

like we're sellers on Amazon whenever we

21:26

get an email from Amazon like the top

21:28

part it's in English and then like the

21:29

bottom part it's all in Chinese because

21:31

so many sellers are are Chinese on

21:34

Amazon amazing are you going to continue

21:36

doing

21:37

this selling on Amazon

21:40

or uh yeah um I'm we're gonna for many

21:45

years we've tried to reduce that it used

21:48

to be 98% usually before 98% of our

21:51

sales were on Amazon we've gotten it

21:53

down to 90% And then in 2023 we've

21:55

gotten it down a little bit lower and so

21:57

we're just continuously trying to reduce

21:59

our dependence on Amazon but it's so

22:01

difficult in the toy space um it's hard

22:04

but like I like what I what I'm doing I

22:07

like my team and like it feels really

22:09

good to like make something and then to

22:11

make something that's like good for

22:13

people like you know helps spatial

22:15

thinking it's an educational toy um so

22:18

yeah I want to keep doing it last

22:21

question I can't resist is Molen har

22:22

your real

22:23

name no it's a fake name no it's it's

22:26

real so um

22:30

ever it my brother's name is Hilton and

22:33

the joke is uh he's uh where he was

22:37

conceived and I'm why um my dad used to

22:40

work for Molson breweries up in Montreal

22:43

Canada and he saw it fit to name me

22:45

after the brewery even though I'm

22:47

unrelated my brother was I can't believe

22:50

he was conceived in a in a Hilton hotel

22:52

in Arizona boy your your parents are

22:54

heroes I've never met them but I like

22:56

them so much um you

22:59

about your children molon Hart thank you

23:01

for that explanation that was absolutely

23:02

the most interesting thing I've heard

23:03

today I appreciate

23:07

it free speech is bigger than any one

23:10

person or any one organization societies

23:12

are defined by what they will not perit

23:14

what we're watching is the total

23:16

inversion of

23:17

virtue hey it's Tucker Carlson the

23:20

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23:22

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23:24

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23:25

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23:28

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23:31

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23:34

it on Tucker carlson.com and we hope you

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will

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Tags associés
Amazon MonopolySmall BusinessE-commercePricing PoliciesSeller ExperienceOnline MarketplaceSupply ChainChinese SellersProfit MarginsAmazon FeesEntrepreneurship
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