Quote:
Originally Posted by DiapDealer
From Shatzkin:
I wasn't aware that the publishers were being forced to sell their products through Amazon. Surely they can disintermediate them any time they like?
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If Amazon is powerful enough, they start dictating the terms, because the company cannot stay in business without them.
Walmart pretty much has this kind of power in the retail market. Read up on Vlasic pickles + walmart, for example. Walmart basically has the power to dictate to some companies what price they will pay - the company has two choices. Do it and struggle, or tell Walmart to stuff it, and lose such a large volume of shares that you go out of business anyway.
I don't believe Amazon is this powerful in the book market, yet, though. Collaborative price fixing isn't the way to avoid them getting power.