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0:57

Here's today's episode. The

1:29

documentary is called Amazon Market

1:32

Power Monopoly. So

1:34

the filmmakers interview Amazon sellers who say they

1:36

are barely keeping their heads above water because

1:38

of the company's policies. Those

1:40

policies tell them exactly how much they can charge

1:43

for their own products. So take

1:45

a look at this clip from the movie. It

1:47

shows a German businessman who makes and sells children's

1:49

beds and does nearly all of his business on

1:51

amazon.com. He says the

1:53

company puts pressure on him to keep his prices

1:56

low as low as possible to keep customers from

1:58

buying that same product on another site. such

2:00

as eBay. If Amazon finds out

2:02

that he's selling his products cheaper on another

2:05

site like eBay, they will punish him by

2:07

making his products very hard to find on

2:09

Amazon. And they do this by taking

2:11

away what is called his buy box. The

2:14

buy box is the area you click on

2:16

the product page to make a purchase. If

2:18

there's no buy box, customers tend to leave

2:21

and buy it somewhere else. That

2:23

sounds confusing. Watch the man demonstrate

2:25

exactly how this is done. His

2:28

most important online shop window at Amazon,

2:31

the so-called buy box, the framed box

2:33

around the shopping cart field. So

2:39

this whole box here that's just called the

2:41

buy box, and you can see the Add

2:43

to Cart button here. And if I click

2:45

on it now, then I have this in

2:47

the shopping cart and I can buy the

2:49

item. But

2:51

Marko Shock can also lose the buy box

2:54

for his beds. For example, if his prices

2:56

are not competitive. That

2:59

means for me with buy box I

3:01

can sell. Without buy box, 95 to

3:03

99 percent of the sales are gone.

3:07

Who gets the buy box is decided

3:09

by Amazon alone. Marko Shock

3:11

shows us. I'm

3:16

going to change the price to 349 euros. And

3:22

we will see that in about 15 minutes,

3:24

the buy box here is gone. And

3:28

indeed, after 15 minutes, the buy

3:30

box has disappeared. For customers, it

3:32

now seems as if the item is not available

3:34

at the moment. In

3:37

other words, Amazon decides what you charge

3:39

for your products and if you don't

3:41

obey, they will shut you down. But

3:43

in the most passive aggressive corporate way,

3:45

they just remove your buy box. It's

3:48

fascinating. And there's a lot like that in this

3:50

film. It goes on to follow the business of

3:52

a man called Molson Hart. He's the

3:54

CEO of an educational toy company that does

3:56

most of his business on Amazon. The

3:59

film crew is there. when Hart learned that

4:01

Amazon would once again raise its fees on

4:03

him. So in order to turn a

4:05

profit, he was forced to jack his prices. Watch. We

4:08

are probably gonna have to raise

4:10

prices. So

4:14

what they what Amazon did

4:16

is they increased all

4:18

the fulfillment fees by about 5%. So

4:23

if you look over here, we got an email, shipping

4:27

brain place is gonna be 5% more expensive.

4:32

Now the Texan has to recalculate.

4:35

In order to keep our profits at the same level, we're gonna have

4:37

to raise the price by 50 cents.

4:41

So maybe we're gonna go to 17.99 up from 16.99. The problem, if he increases

4:45

on Amazon, he

4:50

must also increase the prices of his products

4:52

on eBay, Walmart, and even in his own

4:54

web store. Although they are not affected by

4:56

the fee increase. If he doesn't do that,

4:59

experience shows that he loses the buy

5:01

box on Amazon. Oh,

5:05

so it's not really a free market

5:07

tactic. If they're forcing you to raise

5:09

your prices on other platforms,

5:12

it's a monopoly tactic. And there's a difference.

5:14

That's not the free market you just saw.

5:17

That's how monopolies operate. Molson

5:19

Hart knows that very well. He's lived it. He's the

5:21

man you just saw in that clip. And he joins

5:23

us now. Molson Hart, thanks for joining us. The clip

5:25

we just played is a fair representation of your life

5:27

as an Amazon seller. Yeah, that's

5:30

absolutely a fair representation of our

5:32

life as an Amazon seller. If

5:34

your products are cheaper off Amazon

5:37

than they are on Amazon, then

5:40

you lose all your sales on Amazon, which is a

5:42

big problem for us because 90% of our sales come

5:46

from Amazon. So

5:48

what you're saying, I think is

5:50

that Amazon sets the price market

5:52

wide, not just on its own site,

5:54

but on other sites. So that's

5:56

is that correct? In

5:59

a way that's true. Right. So if you look

6:01

at the statistics and a lot of people

6:03

have a different statistics out there, the Amazon

6:05

controls roughly 50% of the

6:07

whole online e-commerce market, depending on how

6:09

you calculate it. And for

6:11

us, since 90% of our

6:14

sales come from Amazon, and since Amazon

6:16

is more expensive to sell on than

6:19

other platforms like eBay, Walmart, or

6:21

even our own website, Amazon in

6:23

a way kind of does set

6:26

the price. Because if we price

6:28

our products lower off of Amazon,

6:30

because those off Amazon platforms are

6:32

cheaper than Amazon, we lose 90%

6:36

of our sales on Amazon. So

6:38

we have to constantly keep

6:40

our prices up off Amazon.

6:42

And we can't lower our

6:44

prices on Amazon to the costs

6:47

off Amazon, because then we'll end up losing

6:49

money because Amazon is more expensive to sell

6:51

on than it is to

6:53

sell on off Amazon. It's fascinating. Thanks

6:56

for watching the episode with Molson Heart

6:58

and it gives you a sense of

7:00

what Amazon is really like worse than

7:02

you thought. So if

7:04

you don't want to use Amazon and up till

7:06

now you haven't had much of a choice because

7:08

it's effectively a monopoly. Well, now you don't have

7:11

to because there's an option, a

7:13

new service made for you. It's called public

7:15

square. And they're building a

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7:20

and buying that goes back to

7:22

America's roots. So far, they have

7:24

over 75,000 small

7:26

businesses from this country offering their

7:28

products and services. So if you're

7:30

a small business owner hoping to

7:33

sell handcrafted goods, guns,

7:35

ammo, fresh food, household essentials,

7:37

whatever public square is perfect

7:39

for you. It's a great place to do

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that to sell what you make. And it's

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also a great place to buy what other

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people make. And it's easy. You can add

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more, go to public square slash

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Tucker. They're a sponsor of this program

7:58

and we're happy to have them proud. In fact, So

8:00

if I can just ask a stupid question, how

8:02

does Amazon know what you're doing off Amazon? Yeah,

8:06

that's a great question So I think they

8:08

do it two different ways the primary way

8:11

they do it is basically by using an

8:13

algorithm that just like scrapes The entire internet

8:15

looking at prices on Walmart looking at prices

8:17

on eBay and in the video

8:19

that you showed in the documentary That's

8:21

how Amazon was able to shut down

8:23

that person's product so fast within 15

8:25

minutes So the algorithm is kind

8:28

of like monitoring the whole internet to see if

8:30

prices are higher lower on and

8:32

off Amazon And it might also

8:34

be possible for there used to be like a

8:36

button on pages on Amazon where consumers

8:38

could report like a better Price elsewhere,

8:40

so there might be like a human

8:42

component as well But it's mainly just

8:44

an algorithm where they're watching prices on

8:46

and off Amazon But they know when

8:49

you've been sleeping they know when you're awake. I mean this Like

8:52

they're part of the surveillance data I mean

8:54

there you wouldn't imagine because you're selling

8:57

on Amazon that Amazon would be watching your behavior

8:59

in other places, right? Yeah

9:02

to my mind it's totally unnecessary and

9:04

there's there's no need for this policy

9:07

They used to contractually enforce this

9:10

so there used to be a line in the contract

9:12

that seller signed with Amazon They would say that you

9:14

would not sell your products for less off Amazon and

9:16

then there was like kind of like

9:18

a regulatory kerfuffle in Europe And

9:21

they ended up removing that from their

9:23

contracts, but then they maintained the policy

9:27

Algorithmically and In

9:30

2019 I wrote an article about it And

9:34

I can kind of explain why it's so

9:36

hard to get these kind of narratives about

9:38

Amazon But I wrote an article about it

9:40

and that article ended up getting wrapped up

9:42

into some into like an FTC lawsuit The

9:44

state of California versus Amazon and

9:46

that's why we're talking about it today What

9:50

if just back up a sentence if you would what

9:52

do you mean it's so hard to get that story

9:54

out? So

9:57

like as I said right 90% of our sales come from

10:00

Amazon and no one in their

10:02

right mind wants to

10:04

bite the hand that feeds them. So

10:06

the people who know most about Amazon are the

10:08

sellers who are selling on Amazon

10:11

like my company. And

10:13

so when people speak up, you're taking

10:15

some risk. I

10:17

try to be fair regardless of whether or

10:19

not I'm being critical of their policies. I think

10:21

they're a good company with great people with some

10:24

bad policies. So don't want to bite the hand

10:26

that feeds you. And then the second thing

10:28

is my company, all

10:30

companies that sell on Amazon, they sign a contract

10:32

that says that you're not going to make public

10:35

statements about Amazon. You're not going to speak to

10:37

the press without express written

10:40

permission from Amazon. So

10:42

those are two reasons for the

10:45

people who know most about Amazon to

10:47

not speak about Amazon. And then

10:49

you also have to remember that Amazon is

10:51

really big in the documentary media space because

10:53

Amazon has its own Netflix. They have Prime

10:55

Video. They have their own Hulu. So

10:57

if you want to make a documentary about Amazon,

10:59

you have to think carefully about what's

11:02

that going to do to your career going forward.

11:04

I'm not saying Amazon does this, but you may

11:06

not be able to sell a film

11:09

or documentary to Amazon in the future. And

11:12

so those are the reasons why it's kind

11:14

of hard to get this information out there. How

11:17

long do you think before they get their own Defense Department? Like

11:23

the Department of Defense? Or like where? I

11:25

mean, you're describing a company that's a lot,

11:27

and of course we all sort of know

11:29

this on some level, but that's a

11:32

lot more powerful and a lot more willing to

11:34

flex its power than maybe some of us imagined

11:36

just 10 years ago. Well,

11:38

okay. So like I am

11:40

a witness in, I don't know if I'm

11:43

technically a witness, but I've been pulled into

11:45

those two lawsuits, the FTC and a bunch

11:47

of states versus Amazon and the state of

11:49

California versus Amazon. And like

11:52

generally speaking, I can say this about

11:54

my interaction because I'm bound by confidentiality

11:57

in terms of what I can say with the

11:59

lawsuits. Yeah. Like

12:02

it is an attorney's job

12:04

to discredit someone who doesn't

12:08

help the attorney's case, right? And

12:13

that is, that's pretty much what I

12:16

have been, well, that is what is

12:18

often experienced in lawsuits of this kind.

12:21

And I went through 16

12:24

hours of depositions, eight

12:26

hours from the state of California, eight

12:28

hours from Amazon. I spent like 20

12:30

or 30 hours collecting documents. And it's

12:33

been a very painful, time consuming and

12:35

expensive experience for me. Amazon does a

12:37

lot of things, but I

12:39

don't know. I mean, they got the drones,

12:42

but I don't think they're selling weapons quite

12:44

yet. Right. Well, I didn't think that of

12:46

a movie studio and be able to control coverage of their own company.

12:48

A few years ago. So you never know where

12:51

these things are going, Molson Hart. But

12:53

I just wonder, since you obviously have thought

12:55

about this in larger terms, you've been involved

12:58

or a witness to these lawsuits. I

13:00

mean, aren't we approaching the definition

13:02

of a monopoly? So business

13:05

is something that controls its silo, you

13:07

know, where it operates. A monopoly is

13:09

a business that controls an

13:11

entire market. And kind

13:13

of what you're describing is a company

13:16

that controls online commerce,

13:19

the prices. Amazon

13:22

with its weight and the way that

13:24

they keep on jamming fees down sellers

13:26

throats. And this isn't just about me

13:29

as someone who sells on Amazon complaining

13:31

about Amazon's fees. Like these fees end

13:33

up becoming higher prices for you if

13:35

you shop on Amazon. They,

13:39

I don't want to say that they control

13:41

pricing on the entire American internet or the

13:43

countries where they operate, but you know, they're

13:45

pretty, you know, they have a lot of weight

13:47

when it comes to where prices are in

13:50

terms of whether or not they're a monopoly.

13:53

You know, that's not for me to decide. That's

13:55

for the courts to decide. And like I said

13:57

before, sincerely, not just saying

13:59

it. because I don't want to get smacked by Amazon.

14:01

I mean, I don't. But

14:04

they are a good company and they have

14:06

great people, but they do have some bad

14:09

policies. And I think the best outcome would

14:11

be for them to, you know,

14:13

stop with the bad policies. And I wrote an

14:15

open letter to Jeff Bezos on Twitter. It

14:17

got some play. I think he read it, because

14:19

he's responded to me on Twitter before, or

14:22

X I should say. And,

14:25

you know, I think it would just be better if

14:27

they ended the bad policies, rather than, you know,

14:30

potentially being broken up or something like that. But again,

14:32

that's not really for me to decide. Well, they're not

14:34

gonna, I mean, he owns the Washington Post, which

14:36

is the main news source in the

14:39

capital city. So I don't think they're

14:41

gonna be broken up anytime soon. And I suspect the Post

14:43

would editorialize against that if it came down to it. Hey

14:50

guys, it's Vivek Ramaswamy here, inviting you

14:52

to listen to my podcast, True. We

14:55

just relaunched it after the campaign, and

14:57

we are already writing up the podcast

14:59

charts. Here's why. I

15:01

think that hard, in-depth conversations about the tough

15:04

issues is the only way we're gonna get

15:06

this country back. Because make

15:08

no mistake, we are currently in a war

15:10

for the future of America, and you cannot

15:12

win a war unless you're willing to speak

15:15

the truth. If you want

15:17

standard conservative talking points, this podcast is

15:19

not for you. But if

15:21

you wanna go deeper and hear the conversations,

15:23

you're not gonna find anywhere else. The conversations

15:26

that will challenge you, that

15:28

will challenge me, then subscribe to Truth

15:30

with Vivek Ramaswamy on Apple,

15:32

Spotify, or wherever you get your

15:35

podcasts. And I promise you, you're

15:37

gonna cover terrain that you're not gonna hear elsewhere.

15:42

So let me just ask you, since

15:44

it's your business, you're in this business,

15:46

who makes money selling on Amazon? Amazon?

15:52

Yeah. So, like,

15:56

for us, right? So we have a, one

15:58

of our best sellers is... brainflakes, I

16:00

got my prop, it's $17

16:03

on Amazon right now. And

16:05

after all the fees are paid, we get seven out

16:08

of the $17. So it's

16:10

$17 on Amazon. After the fees

16:13

are paid, we receive seven. With

16:15

that $7, we have to pay

16:17

rent, insurance, all

16:19

employees, and then we also have to

16:21

pay for the cost of the product.

16:23

Wait, wait, wait. So the $10 you're

16:25

subtracting from the $17 does not include

16:27

your manufacturing costs or? Correct.

16:30

Yeah. So you started $17,

16:34

$10 of those dollars and I can run

16:36

through the fees. Would you mind? Because that's

16:38

a crazy number. Yeah, let's do it. Yeah.

16:40

Yeah. Do you want me to break down how we

16:42

get to that number? Would you mind? Yes. I mean,

16:44

wait, hold on. I'm just, I'm a little bit surprised.

16:46

I mean, I thought they took a VIG of some

16:48

kind and they should. They're selling your product for you.

16:50

That's great. But the fact that

16:53

they would take the majority of the

16:55

retail price is stunning to me.

16:59

Well, it's more than the majority and

17:01

you have to remember that we are not selling

17:03

to Amazon. We are selling on

17:06

Amazon. So all the risk is with us.

17:08

If the product doesn't sell, Amazon

17:11

has no risk. They can actually just continue to

17:13

charge us fees. Not only that, they'll charge us

17:15

like extra double fees for having too much inventory

17:18

at Amazon. So yeah, at the risk of embarrassing

17:20

myself on your show, I will attempt to do

17:22

some math and I'll tell you how we go

17:24

from $17. Yes. I

17:27

would love that. Yeah, let's do it. All

17:29

right. So $17. First in

17:32

our category in toys, Amazon charges 15%.

17:36

Okay. So that's,

17:38

um, so let's call that around 250.

17:40

Okay. So 15% of $17. So now I'm down to

17:45

14.50. Okay. Then we

17:48

have to pay a fulfillment fee to Amazon.

17:50

That's around $6 and 60 cents. So

17:54

I think about 450, uh, 14.50. So that

17:56

gets me to eight. That gets me

17:58

to $7. 90

18:01

cents. Okay, so just those two things,

18:03

the 15% commission and then the $6.60 fulfillment

18:08

fee that Amazon charges, I

18:11

believe got me down to 9. I'm

18:16

embarrassing myself, but something like the high

18:18

sevens. Yeah. And then we have to

18:20

pay advertising and storage and

18:23

shipping to Amazon and

18:25

that gets us down to around $7.

18:28

Okay, so we receive

18:30

$7 when one jar of brain

18:32

flakes is sold. And

18:35

with that $7, we have to

18:37

pay our rent, our

18:39

employees, salaries, our insurance.

18:41

We even have to pay for, we have to insure

18:43

Amazon as well. Okay. And then we have to pay

18:46

for the cost of the product, which is like, let's

18:48

say $3.50. So on the $17, we'll make, depending

18:52

on what our costs are, because costs go

18:54

up and down between three to four dollars.

18:56

So our profit is about three to four

18:58

dollars out of the $17. And there

19:01

are like all sorts of crazy fees that I

19:04

could walk you through. It's wild. That

19:06

is amazing. That's not at

19:09

all what I imagined at all.

19:11

So the

19:13

strong majority goes to Amazon right

19:15

off the top. So then

19:18

who, how could you make a living doing? I mean,

19:20

how many brain flakes do you have to sell to

19:23

like, take a week off and go to

19:25

Disney World in August? Disney

19:28

World's pretty expensive. Yeah. You know, we

19:31

were lucky to sell hundreds of thousands

19:33

of jars of brain flakes and bigger

19:35

sets. And so if we're making three

19:37

to four dollars, a

19:40

jar or whatever, you

19:42

know, and if you sell $100,000, you

19:44

can, you do have

19:46

money to pay salaries and rent and all that

19:48

stuff. And you can maybe

19:51

go to Disneyland once every two years.

19:53

Does anyone get rich selling, do you

19:55

know of, get rich selling on Amazon?

19:58

Yeah. People. People. Still do

20:01

get rich. I'm I think a

20:03

lot of Chinese companies have gone

20:05

rich as well. I'm the pretty

20:07

crazy statistic for you. Over fifty

20:09

percent. Of. The top

20:12

sellers on Amazon or

20:14

not American. Okay,

20:17

So he is so in the Us market

20:19

place Like with say fifty two percent of

20:22

the sellers are non American and of that

20:24

fifty two percent. The. The

20:26

top sellers of. Stuff. Of that,

20:28

fifty two percent are predominantly Chinese, and

20:30

the Chinese sellers even though we're selling

20:33

in the United States, even though it's

20:35

our country, we should understand how marketing

20:37

works here. It's our language, their the.

20:40

They. Just clean up the do very well in

20:42

terms of market share. the know make money but

20:44

many of them do. A

20:46

submersible to make money on as you're

20:49

not even describing the source of manufacturing

20:51

Metics, an overview on cars, and fifty

20:53

two percent if you're. if

20:55

you're messing with a stuff was actually made the your

20:57

time with the sellers. Yeah.

20:59

That That's such an excellent point. So

21:01

if you go back to like the

21:04

Nineteen seventies, nineteen eighties, we had a

21:06

lot of manufacturers in our country. We

21:08

were making things all those factories shifted.

21:11

Largely. To China, Something Mexico

21:13

overseas. Generally what's going on

21:15

now is that the Chinese

21:17

and other countries to semester

21:19

or kind of vertically integrating

21:21

and they're taking over. The.

21:24

Product design and wholesaling and distribution

21:26

that had traditionally has been in

21:28

the United States. So once upon

21:30

a time you know you could

21:32

buy from an American factory. Okay,

21:34

and America factory would sell. It's

21:36

brought to an American store. Whatever.

21:38

And then we had this transitional

21:40

period where Chinese factories were selling

21:42

to distributors who resigned to stores

21:44

or Chinese factories. Where is selling

21:46

to Target or whatever was happening

21:48

now is a Chinese factories. Are.

21:51

Selling directly. On

21:53

Amazon to Us consumers and

21:55

the net result of this

21:57

because the playing field is.

22:00

It in the Chinese fair and I

22:02

can kind of the explain why is

22:04

it the U S like wholesale distribution

22:06

product. Design.

22:09

Industry has come under

22:11

threat from very tough,

22:13

difficult competition from. China.

22:15

And so now like we lost our

22:17

factories and in my opinion, I think

22:20

we're going to lose this middle part

22:22

of our economy. I'm. Largely

22:24

to companies in China. How.

22:27

Does how does China have a structural

22:29

inventions? So.

22:32

For one armed these Chinese sellers

22:34

they're selling on Amazon they don't

22:36

have the file us or income

22:39

tax returns the he'll have to

22:41

worry about estimated taxes like like

22:43

we do on their close to

22:45

the factory so they can it

22:47

rate on products much faster. They

22:49

have lower costs and. You.

22:52

Know that's enough. Ah, his third lessons up

22:54

the bill. the lawsuit because they're overseas and

22:56

it's to theorem they may or may not

22:58

have government subsidies or dislike. I mean think

23:00

about if you want to design a new

23:02

product, isn't a a lot easier to like?

23:04

go down the street to the factory of

23:06

Arms of the guy, work that out there

23:08

is to like communicate over video, fly to

23:10

China, feel potentially with the quarantine and work

23:13

that out in order to make something new.

23:15

So the Chinese have a lot of advantages

23:17

when it comes to selling on Amazon. And

23:19

what's Wilde is like, were sellers on Amazon

23:21

whenever we get an email. From Amazon. like

23:23

the pop artists in English and then like

23:25

the bottom part von Chinese because so many

23:27

sellers are. Are Chinese. On

23:29

Amazon Amazing! Are you going to continue doing

23:31

this? Selling.

23:34

On Amazon for our hurts. Ah

23:37

yeah, I'm I'm word an ad. For

23:39

many years we've tried to reduce that

23:41

did used to be ninety eight percent

23:43

usually had before ninety eight percent of

23:45

our sales were on Amazon. We've got

23:47

a down and ninety percent and then

23:49

Toy Story three we've gone to.a little

23:51

bit lower and so we're just continuously

23:53

trying to reduce our dependence on Amazon,

23:56

but it's so difficult in the toy

23:58

space. It's hard, but. Like

24:00

what I. But. I'm doing a

24:02

i like my team and like it

24:04

feels really good. The like make something

24:06

and then to make something that's like

24:08

good for people like you know help

24:10

spatial thinking. It's an educational toy. I'm.

24:13

So. Now I want to keep doing it. And

24:16

last person I can't resist is Molson Hurt your real

24:18

name? Not

24:20

a fake name. Now it's it's real.

24:22

So I'm my greatest game ever! And.

24:26

It my brother's name is Hilton and

24:28

the joke is. He's.

24:31

A where he was conceived and I'm why.

24:34

My dad worth of a bird. Molson.

24:37

Breweries up in Montreal, Canada, and he

24:39

cites it to name it after the

24:41

brewery, even though I'm unrelated. My brother

24:43

was. Of I'd say blue he

24:46

was conceived in a in a Hilton hotel

24:48

an air suffer your your parents are heroes

24:50

of never met them but I like them

24:52

so much on the assume legacy of Zone

24:55

Molson Hard thank you for that explanation I

24:57

was absolutely motions thing I've heard today. And

25:00

sincere. Thanks

25:02

for! This is a tremendous impact as

25:04

if you get his subscribing. We review

25:06

and remember we only really some of

25:08

our interviews. As far as the only

25:11

place you can get all of it

25:13

wouldn't Last episode is Tucker carlson.com and.

25:15

We hope you will.