Amazon’s Latest Supplier Purge Is an Indicator of Price Predation

Amazon’s noisy purge has finally revealed a crucial part of its recoupment strategy: leveraging its growing monopoly power to offload variable costs associated with storage and shipping onto its wholesalers and suppliers. In essence, it seems that Amazon is using its ever-increasing monopoly power as the “only mall in town” to forcefully transfer the variable costs associated with storage and shipping onto its wholesalers and suppliers. Therefore, the more likely future scenario is that Amazon, through implicit means, will require wholesalers and suppliers to drastically reduce their profit margins by assuming the enormous variable costs associated with free same and one-day delivery in order to stay in business.

Source: promarket.org