Molson Hart makes his living selling toys on Amazon but says the company is taking a large chunk of sales. Is Jeff Bezos fair to small businesses?
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Welcome to the tucker crossing pod cash, where every story is an on a story and not one of them has been massaged or influenced or censored by a corporate gatekeeper. We made a lot of these. You could find all of IT and a lot of exclusive content at tucker carson dot com.

We hope you'll check that out. Here's today's episode. Buying products on amazon dot come as a little bit like mastering. Not everybody admits to IT, but honestly, you suspect it's pretty common. It's just so easy.

But what exactly is amazon dot com do? How do jeff days those gets so rich? The details are unknown to most people, even frequent users of the site. When new documentary takes a, those should look at what amazon does at its business practices and what those practices due to the people who try to make a living selling their products on the site. The documentary called amazon market power monopoly.

So the filmmakers interview amazon sellers who say they're barely keeping their heads above water because the company's policies, those policies, tell them exactly how much they can charge for their own products. So take a look at this clip from the movie. IT shows a german business man who makes and sells children's beds and does not all of business on amazon dot com.

He says the company was pressure on me to keep this Prices low, as low as possible, to keep customers rebuying that same product. On another site such as ebay family, one finds out selling his products cheaper. On another site like ebay, they will punish h him by making his products very hard to find an amazon.

They do this by taking away what is called his byo x the bay box is the area you click on the product page to make a purchase. If there's no byo, x customers tend to live. And by IT somewhere else, that sounds confusing. Watch the man and demonstrate exactly how this is done .

is most important. Online shop window at amazon, the so called by box, the frame box around the shopping card field.

So this box here, that's just called the buy box, and you can see the attacked by. And if I click shopping.

But mark shock can also lose the boy box for his bet. For example, if his Prices are not competitive.

just do iit. That means for me, with byo X, I can sell without by box. Ninety five to ninety nine percent of the sales are gone.

It's like a byo x who gets the byo x is decided by amazon alone. Marco shock shows us.

I'm going to change the Price to three hundred forty nine euros, and we will see that in about fifteen minutes the boy box, he has gone.

And indeed, after fifteen minutes, the boy box is disappeared for customers, IT now seems as if the item is not available the moment.

In other words, amazon decides what you charge for your products. And if you don't obey, they will shut you down. But in the most passive aggressive corporate way that just remove your byo x, it's fasting.

And there's a lot like that in this film because on to follow the business of a man called most in heart A C E O, an educational toy company that does most of his business on amazon. The film crew is there when heartlessness t that amazon was once again raise its fees on him, so return a profit. He was force to jack his Prices. Watch.

we are probably after race Prices. So uh, what the what amazon on did is they uh increased all the pfl m fees by about five percent. So if you look over here, we ve got email shipping brain places is gonna five percent more expensive.

Now the taxi has to be calculate in .

order to keep our profits at the same level, we're going have to raise the Price by you know fifty cents. So maybe we're gonna to seventeen ninety nine um up from six. The problem if he increases .

on amazon, he must also increase the Prices of his products on ebay, walmart and even in his own web store, although they are not affected by the fee increase. If he doesn't do that, experience shows that he loses .

the byo x on amazon.

So it's not really a free market tactic. If they are forcing to raise your Prices on other platforms, it's a monopoly tactic. And there's a difference.

That's something free market. You just saw that a monopoly ate most in heart knows that very well. He's lived, ted.

He's the man you just saw on that clip and he joins us now most in heart. Thanks for joining us. The clip which is play as a fair representation of your life as .

a name on seller yeah that's absolutely a fair representation of our life as an amazon seller. Um if your products are cheaper off amazon that they are on amazon, then you lose all your sales on amazon, which is a big prom for us because ninety percent of our sales come from amazon.

So what you're saying, I think, is that amazon sets the Price market wide, not just on its own site, but on other sites. So that is that correct?

In a way that's true, right? So if you look at the statistics and a lot of people have a different statistics s out there, the amazon controls roughly fifty percent of the whole online e commerce market depending on how you calculated.

And for us, since ninety percent of ourselves come from amazon, and since amazon is more expensive to sell on, then other platforms like ebay, walmart or even our own website aims on, in a way kind of does set the Price. Because if we Price our products, lower off of them is on because those um those off amazon platforms are cheaper than amazon. We lose ninety percent of our sales on amazon. So we have to constantly keep our Prices up off amazon. And we can we can't lower our Prices on amazon to the costs off amazon because then end up losing money because amazon is more expensive to salon, that is to sell on off and zine faster.

Thanks watching the episode with most and heart and give a sense of what amazon is really like worse than you thought. So if you don't want to use amazon until now, you haven't had much of a choice because it's effectively of poly. Well, now you don't have to because there is an option.

A new service made for you is called public square, and they are building a brand new way of conducting commerce, selling and buying that goes back to america's roots. So far, they have over seventy five thousand small businesses from this country offering their products and services. So if you are small business owner hoping to sell hand crafted goods, guns, M, O, fresh food, household essentials, whatever, public square is perfect view, it's a great place to do that to sell what you make is also a great place to buy what other people make.

And it's easy. You can add your business in less than ten minutes for free, and so your products nationwide for more good a public square slash tucker, the response to this program and more happy to have them proud, in fact. So if I can ask a stupid question, how does amazon know what you're doing off amazon?

Yeah, that's a great question. So I think they do IT two different ways. The primary way they do IT is basically by using an algorithm that just like scrapes the entire internet, looking at Prices on walmart, looking at Prices on ebay.

And in in the video that you showed in the documentary, that's how, uh, amazon was able to shut down that person's product so fast within fifteen minutes. So the algorithm is kind of like monitoring the whole internet to C, F. Prices are higher, lower on and off.

Amazon and IT might also be possible for the used to be like a button on pages on amazon where consumers could report like a Better Price elsewhere. So there might be like a human component as well, but it's mainly just an algorithm. They're watching crisis on and our family is on.

If they know when you've been sleeping, they they know when you're awake, I mean, it's like IT, they're part of the surveilLance data. I mean, you wouldn't imagine because you're selling on amazon and amazon will be watching your behavioral in their places, right?

Yeah to my mind, it's totally unnecessary and there's there's no need for this policy. Um they used to contractually enforce this, so there used to be a line in the contract the seller sign with amazon. They would say that you would not sell your products for less off amazon.

And then there was like kind of like regulatory coffle le in europe and they ended up removing that from their contracts. But then they maintain the policy um algorithmically and um in twenty nineteen I I wrote an article about IT and I can kind of explain why so hard to get these kind of narratives ves about amazon. But I run article about IT in that article ended up getting wrapped up into some into like an ftc loss. The city, california versus is on and that's why we're talking .

about IT today is back up sentence, if you would. What you mean? It's so hard to get that story out.

So like as I said, right, ninety percent of ourselves come from maison, right and um no one in the right mind uh like wants to bite the hand, defeat them, right? So the people who know most about amazon are the sellers who are selling on amazon like like my company, right? And so where when people speak up, your you taking you're taking some risk.

I tried to be fair regardless as well and not being critical of their policies. I think they're a good company with great people with some some bad policies, right? So don't wants to buy the hand that feeds you.

And then the second thing is, uh my company you know all companies to sell on amazon design a contract that says that you know you're not going to make public statements about amazon. You're not going to speak to the best to the press who without um express written permission from amazon, right? So those are two reasons for the people who know most about amazon to not speak about amazon.

And then you also have to remember that amazon is like really big in the documentary media space because amazon has its own netflix right? They have prime video. They have their own. Hou, yeah.

So if you if you want to make a documentary that amazon you have to like think carefully about, you know what's I going to do to your career going forward? I'm not saying amazon does this, but you know you may not be able to sell a film or documentary amazon in the future. And so you know those are the reasons why it's a hard to get this information out there.

How long do you think before they get their own defense department.

uh, defense department like the department defense or like you're describe.

you're describing a company that's a lot of course, I know this on some level, but a lot more powerful and a lot more willing to flex its power than maybe some of us imagining just ten years ago.

Well, okay. So like I I I am a witness in I don't know if i'm technically a witness, but i've been pulled into those two losses, the ftc in a bunch of states verse amazon and the state california verse amazon. And like generally speaking, I can say this about my interaction because i'm bound by a confidential the in terms of what I can say with the losses.

Yeah um like IT is in attorney's job to discredit someone who uh a doesn't help the the attorney ase right? And um that is that pretty much what I have been. Well, that is always often experienced in lawsuits of this kind and you know I went through sixteen hours of depositions um eight hours from city, california, eight hours from amazon.

I spent like in twenty or thirty hours collecting documents and been a very painful, time consuming and expensive experience for me. Amazon does a lot of the things, but I don't know. I mean, they have got the drones. They are selling .

weapons. Didn't think that a few years ago. So you know you never know where these things are going and most and heard um but I just wonder since you obviously thought about this in in larger terms because you been involved or witness to these, I mean, isn't this aren't we approaching the definition of of a monopoly?

So business is seeing that controls its silo. Word Operates a monopoly is a business that controls and entire market. And kind of what you're describing is a company that the controls online commerce, the pricing, uh.

amazon with its way in the the way that they keep on jammie fees down sellers throats. And this isn't just about me as someone who sells on is on complaining about amazon's s fees like these fees end up becoming higher Prices for you. If you shop on amazon, they uh, I don't want to say that they control pricing on the entire american internet or the countries where they Operate.

But you know they are pretty you know they have a lot of weight when IT comes to where Prices are in terms whether not there's a monopoly. Um you know that's not for me to decide this, for the courts to decide. And you like I said before, I sincerely not just saying IT because I don't want to get smacked by him as on I mean, I don't and but they are good company and they have they have great people, but they do have some bad policies.

And I think best outcome would be for them to you, stop with the bad policies. I wrote an open letter to jeff bezos on twitter. Got some play. I think he read IT because he's responded to me on twitter before or X, I should say um and you know I think you would just be Better if they ended the bad policies rather than you know potentially being broken up for something like that.

I think he owns the washing post, which is the main news source in the capital city. So I don't think you will be broken up at any time soon. I suspect the post with editorials against that if IT came down to IT.

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So just ask you is your business it's you're in this business who makes money selling an amazon.

Uh amazon yeah .

um so like .

uh for us right so we have a one of our best sellers is brain like I got my prop is seventeen dollars okay on amazon right now? And um after all the fees are paid, we get seven out of the seventeen dollars. okay.

So it's seventeen dollars on amazon. After the fisa paid, we receive seven. With that seven dollars we have to pay rent, insurance, um all employees and we also have to pay for .

the cost of the dollars. Subtracting from does not include your manufacturing costs .

or correct? yes. So you started seventeen, ten of those dollars and I can .

run through the fees. That's a crazy number.

IT, yeah, yeah. Do you want me to break down?

Would you mind? yes. I mean, wait, all a little bit surprised. I know I thought they took a vig of some kind and they should have theyselves your product of that's great. But the fact that they would take the majority of the retail Price is stunning to me.

Well, it's it's more than the majority. And you have to remember that we are not selling to amazon. We are selling on amazon.

So all the risk is with us of product doesn't sell, amazon has no risk. They can actually just continue to charge us fees. Not only that, they're charges like extra double fees for having too much in mentorian amazon.

So yeah at the risk of embarrassing myself, find your show. I will attempt to do some math and i'll tell you how we go from seventeen dollars yes, I like right. So seventeen dollars first in our category in toys, amazon charges fifteen percent okay, so that's um so let's call that around two fifty OK.

So fifty percent of seventeen dollars. So now i'm down to fourteen fifty, okay? Then we have to pay a fulfillment fee to amazon that's around six dollars and sixty cents. So I think about fourteen, fourteen and fifty. So that kiss me to eight, that kiss me to seven dollars in ninety cents OK.

So just those two things, the the fifteen percent commission and then the six dollar sixty cent fulfillment fee, the amazon charges um I believe got me down to uh night. I am embarrassing myself. But something like the high seven, and then we have to pay advertising and storage and shipping to amazon.

And the tag gets us down to around seven dollars. O, K. So we receive seven dollars when one jar of brain flakes is salt. And with that seven dollars we have to pay our rents. Our employee salaries are insurance we even have to pay for.

We have to ensure amazon as well, okay? And then we have to pay for the cost of the product, which is like what's say three fifty. So on the seventeen dollars will make depending on what our costs are, because costs go up and down between three to four dollars.

So we are profits about three to four dollars out of the seventeen dollars. And there are, like all sorts of crazy fees I could walk through. It's, well.

that is amazing. H, that's done all what I imagined at all. So the, the, the, the strong majority goes to amazon right off the top. So then how how could you make a living? Do I mean, how many brain flakes do you have to sell to, like, take a week off and get a disney world in August?

Disney world's pretty expensive. yeah. We were lucky to sell hundreds of thousands of jars of brain fix and bigger sets. And so before making three to four dollars, uh, H, R, or whatever, you know. And if you sell one hundred thousand dollars, you can, you do have money to pace salaries and rent all that stuff and you can maybe go to disney land once every two years. I would.

does anyone get rid selling that you know of get rich selling on amazon?

Yeah people people still do get rich. Um I think a lot of chinese companies i've gotten rich as well. Um pretty crazy statistics for you. Over fifty percent of the top sellers on amazon are not american OK. So so in the U S.

Marketplaces like let's say fifty two percent of the sellers are not american and of that fifty two percent, uh, the top sellers are of that fifty two percent, they're predominantly chinese. And the chinese sellers, even though we're selling in the united states, even though it's our country, we should understand how marketing works. Here is our language.

They they just clean up. They do very well in terms of market share. They don't all make money, but h many of them do um to make money on. You're not even .

describing the source of manufacturing. I mean, I think the number will be a lot harder than fifty two percent if you are if you are measure where the stuff is actually made. But your type of the shellers .

yeah that such an excEllent point. So if you go back to like the one hundred and seventy and eighties, we had a lot of manufacturer in our country. We were making things. All those factories shifted largely to china, some to mexico, overseas. generally.

What's going on now is that the chinese in other countries to understand are kind of vertically integrating, and they're taking over the product design and wholesaling and distribution had traditionally has been in the united states. So once upon a time, you know, goodbye from an american factory, okay? And the american factory would sell its bad to american store, whatever.

And then we had this transitional period where chinese factories were selling to distributors who were selling to stores. Our chinese factories were selling to target whatever. What's happening now is the chinese factories are selling directly on amazon to U.

S. consumers. And the net result of this because the playing field is uh in in the chinese favor. And I can kind of explain why is that the U S. Like wholesale distribution product um design industry has come under threat from very tough competition from china.

And so now like we lost our factories and in my opinion, I think we're gona lose this middle part of our economy. Um largely two companies in china. How does china .

have a structural advantage in this?

So for one um these chinese sellers, the selling on amazon, they don't have to file U S. Uh income tax returns so they don't have to worry about estimated taxes like like we do. Um they're close to the factories so they can iterate on products much faster.

They have lower costs. And um you know that's enough ah they are less acceptable the lawsuits because they are overseas. It's just the they may may not have government subsidies.

Or just like I mean, think about if you wanted design a new product, isn't A A lot easier to let you go down the street to the factory, talk to the guy, worked that out that IT is to like communicate over video, fly to china, deal potentially with the quarantine e and worked that out in order to makes something new. So the chinese have a lot of advantages when he comes to selling on amazon. And what's wild is like we're sellers is on amazon whenever we get an email from amazon, like the top part, it's in english. And then like the bottom part, it's all in chinese because so many sellers are are chinese on amazing.

Are you gonna continue doing .

us selling on amazon? yes. Uh, yeah um i'm we're going to for many years, we've tried to reduce that.

Used to be ninety eight percent, usually before ninety eight percent of our sales were on amazon and we've got IT down ninety percent. And then twenty twenty three, we've gotten a down a little bit lower. And so we're just continuous ly trying to reduce our dependence on amazon.

But it's so difficult in the toy space. Um it's hard but like I like what I what i'm doing. I like my team and like IT feels really good to like make something and then to make something that's like good for people like you know help spatial thinking it's an toy um so yeah I want to keep doing that.

At last question I can't resist is most hurt your real .

name now is a fake name no it's it's real. So um I like .

the greatest name over .

my brother's name is Hilton and the joke is a he, uh, where he was conceived and i'm why my dad used to work for molson buries up in montreal, canada and he saw that fit to name me after the bury. Even though i'm unrelated, my brother was, I came in. He was conceived in in a halt and hotel .

in a your parents are heroes. I've never met them, but I like them so much the most in heart. Thank you for that explanation.

I was absolutely most other thing I ve had today. Appreciate thanks for listening the tucker cross in podcast. If you liked IT, be sure to hit, subscribe and leave a review. And remember, we only release some of our interviews podcast. The only place you can get all of IT, including test episodes, is tucker carlson and dot com, and we hope you will.