Marco Schach and Molson Hart expose Amazon’s predatory grip on third-party sellers, where a 5% fee hike or off-platform price undercutting triggers algorithmic buy-box removal—slashing sales by 95–99%. Brain Flakes’ Hart reveals $17 products yield just $3 profit after 15% commissions, $6.60 fulfillment fees, and ads, while Chinese sellers (52% of top U.S. vendors) dominate via cost advantages. Legal battles—like the FTC’s lawsuit and California’s 16-hour deposition—highlight Amazon’s monopolistic tactics, from pricing surveillance to media suppression via Prime Video/Hulu ownership. Despite diversification efforts, Hart admits Amazon’s 50% market share leaves sellers trapped in a system where compliance equals exploitation. [Automatically generated summary]
Buying products on Amazon.com is a little bit like masturbation.
Not everybody admits to it, but honestly you suspect it's pretty common.
It's just so easy.
But what exactly does Amazon.com do?
How did Jeff Bezos get so rich?
The details are unknown to most people, even frequent users of the site.
Well, a new documentary takes a closer look at what Amazon does at its business practices and what those practices do to the people who try to make a living selling their products on the site.
The documentary is called Amazon Market Power Monopoly.
So the filmmakers interview Amazon sellers who say they are barely keeping their heads above water because of 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 businessman who makes and sells children's beds and does nearly all of his business on Amazon.com.
He says the company puts pressure on him to keep his prices low as low as possible to keep customers from buying that same product on another site such as eBay.
If Amazon finds out that he's selling his products cheaper on another site like eBay, they will punish him by making his products very hard to find on Amazon.
They do this by taking away what is called his buy box.
The buy box is the area you click on the product page to make a purchase.
If there's no buy box, customers tend to leave.
And buy it somewhere else.
That sounds confusing.
Watch the man demonstrate exactly how this is done.
unidentified
His most important online shop window at Amazon, the so-called buy box, the framed box around the shopping cart field.
So this whole box here that's just called the buy box, and you can see the add to cart button here.
And if I click on it now, then I have this in the shopping cart and I can buy the item.
But Marco Schach can also lose the buy box for his beds.
For example, if his prices are not competitive.
That means for me, with buy box I can sell.
Without buy box, 95 to 99% of the sales are gone.
Who gets the buy box is decided by Amazon alone.
Marco Schach shows us.
I'm going to change the price to 349 euros.
And we will see that in about 15 minutes, the buy box here is gone.
And indeed, after 15 minutes, the buy box has disappeared.
For customers, it now seems as if the item is not available at 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.
They just remove your buy box.
It's fascinating, and there's a lot like that in this film.
It goes on to follow the business of a man called Molson Hart.
He's the CEO of an educational toy company that does most of his business on Amazon.
The film crew was there when Hart learned that Amazon would once again raise its fees on him.
So in order to turn a profit, he was forced to jack his prices.
Watch.
unidentified
We are probably going to have to raise prices.
Why?
What's going on?
Increased all the fulfillment fees by about 5%.
So if you look over here, we got an email.
Shipping brain flakes is going to be 5% more expensive.
Now, the Texan has to recalculate.
In order to keep our profits at the same level, we're going to have to raise the price by, you know, 50 cents.
So maybe we're going to go to $17.99.
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 buy box on Amazon.
So far, they have over 75,000 small businesses from this country offering their products and services.
So if you're a small business owner hoping to sell handcrafted goods, guns, ammo, fresh food, household essentials, whatever, Public Square is perfect for you.
It's a great place to do that, to sell what you make.
And it's also a great place to buy what other people make.
And it's easy.
You can add your business in less than 10 minutes for free and sell your products nationwide.
If you learn more, go to public square slash Tucker.
They're a sponsor of this program and we're happy to have them.
Proud, in fact.
So if I can just ask a stupid question, How does Amazon know what you're doing off Amazon?
unidentified
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 the video that you showed in the documentary, that's how Amazon was able to shut down that person's product so fast, within 15 minutes.
So the algorithm is kind of like monitoring the whole internet to see if prices are higher or lower on and off Amazon.
And it might also be possible for, there 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 where they're watching prices on and off Amazon.
But they know when you've been sleeping, they know when you're awake.
I mean, it's like they're part of the surveillance data.
I mean, you wouldn't imagine, because you're selling on Amazon, that Amazon would be watching your behavior in other places, right?
unidentified
Yeah, to my mind, it's totally unnecessary and there's no need for this policy.
They used to contractually enforce this.
So there used to be a line in the contract that sellers signed with Amazon that would say that you would not sell your products for less off Amazon.
And then there was kind of like a regulatory kerfuffle in Europe and they ended up removing that from their contracts, but then they maintained the policy.
Algorithmically.
And in 2019, I wrote an article about it.
And I can kind of explain why it's so hard to get these kind of narratives about Amazon.
But I wrote an article about it.
And that article ended up getting wrapped up into like an FTC lawsuit, the state of California versus Amazon.
What do you mean it's so hard to get that story out?
unidentified
As I said, 90% of our sales come from Amazon.
No one in their right mind wants to bite the hand that feeds them.
The people who know most about Amazon are the sellers who are selling on Amazon, like my company.
When people speak up, you're taking some risk.
I try to be fair, regardless of whether or not I'm being critical of their policies.
I think they're a good company with great people.
Some bad policies, right?
So don't want to bite the hand that feeds you.
And then the second thing is my company, you know, all companies that sell on Amazon, they signed 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 press without 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 really big in the documentary media space because Amazon has its own Netflix, right?
They have Prime Video.
They have their own Hulu.
So if you want to make a documentary about Amazon, you have to think carefully about what's that going to do to your career going forward.
I'm not saying Amazon does this, but you may not be able to sell a film or documentary to Amazon in the future.
And so those are the reasons why it's kind of hard to get this information out there.
Yeah, I mean, you're describing a company that's a lot, and of course we all sort of know this on some level, but that's a lot more powerful and a lot more willing to flex its power than maybe some of us imagined just 10 years ago.
unidentified
Well, okay.
So, like, I am a witness in...
I don't know if I'm technically a witness, but I've been pulled into those two lawsuits.
The FTC in a bunch of states versus Amazon and the state of California versus Amazon.
And, like, generally speaking, I can say this about my interaction because I'm bound by confidentiality in terms of what I can say with the lawsuits.
Like, it is an attorney's job to discredit someone who...
It doesn't help the attorney's case, right?
And that's pretty much what I have been...
Well, that is what is often experienced in lawsuits of this kind.
And, you know, I went through 16 hours of depositions, eight hours from the state of California, eight hours from Amazon.
Spent like, you know, 20 or 30 hours collecting documents, and it's been a very painful, time-consuming, and expensive experience for me.
Amazon does a lot of things, but I don't know.
I mean, they got the drones, but I don't think they're selling weapons quite yet.
Well, I didn't think they'd have a movie studio and be able to control coverage of their own company a few years ago.
So, you know, you never know where these things are going, Molson Hart.
But I just wonder, since you obviously have thought about this in larger terms, because you've been...
I mean, isn't this...
Aren't we approaching the definition of a monopoly?
So business is something that controls its silo, you know, where it operates.
A monopoly is a business that controls an entire market.
And kind of what you're describing is a company that controls online commerce, the pricing.
unidentified
Amazon, with its way in the...
The way that they keep on jamming fees down sellers' throats, and this isn't just about me as someone who sells on Amazon complaining about Amazon's fees.
These fees end up becoming higher prices for you if you shop on Amazon.
I don't want to say that they control pricing on the entire American internet or the countries where they operate, but they have a lot of weight when it comes to where prices are.
In terms of whether or not they're a monopoly, that's not for me to decide.
That's for the courts to decide.
Fees Paid to Amazon00:04:20
unidentified
And like I said before, I sincerely, not just saying it because I don't want to get smacked by Amazon.
I mean, I don't.
But they are a good company and they have great people, but they do have some bad policies.
The outcome would be for them to, you know, stop with the bad policies.
And I wrote an open letter to Jeff Bezos on Twitter.
It got some play.
I think he read it because he's responded to me on Twitter before or X, I should say.
And, you know, I think it would just be better if they ended the bad policies rather than, you know, potentially being broken up or something like that.
We're lucky to sell hundreds of thousands of jars of brain flakes and bigger sets, and so if we're making $3 to $4 a jar or whatever, If you sell $100,000, you do have money to pay salaries and rent and all that stuff.
And you can maybe go to Disneyland once every two years, I would say.
You're not even describing the source of manufacturing.
I mean, I think the number would be a lot higher than 52% if you were measuring where the stuff was actually made.
But you're talking about the sellers.
unidentified
Yeah, that's such an excellent point.
So if you go back to the 1970s, 1980s, we had a lot of manufacturers 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 and other countries to some extent are kind of vertically integrating and they're taking over the product design and wholesaling and distribution that traditionally has been in the United States.
So once upon a time, you could buy from an American factory.
And the American factory would sell its product to an American store or whatever.
And then we had this transitional period where Chinese factories were selling to distributors who were selling to stores or Chinese factories were selling to Target or 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 in the Chinese favor, and I can kind of explain why, is that the U.S. wholesale distribution product design industry has come under threat from very tough,
difficult competition from And so now, like, we lost our factories, and in my opinion, I think we're going to lose this middle part of our economy, largely to companies in China.
How does China have a structural advantage in this?
unidentified
So, for one, these Chinese sellers, they're selling on Amazon.
They don't have to file U.S. income tax returns.
They don't have to worry about estimated taxes like we do.
They're close to the factory, so they can iterate on products much faster.
They have lower costs.
That's enough.
They're less susceptible to lawsuits because they're overseas.
They may or may not have government subsidies.
Think about it.
If you want to design a new product, isn't it a lot easier to go down the street to the factory, talk to the guy, work that out than it is to communicate over video, fly to China, deal potentially with a quarantine, and work that out in order to make something new?
The Chinese have a lot of advantages when it comes to selling on Amazon.