Sorry FTC, Third-Party Sellers Owe Their Existence to Amazon
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In his brilliant 2021 book The Cloud Revolution, Mark Mills noted that more books are published and sold today than ever. The bet here is that most readers know why: AmazonAMZN.

It insults physical booksellers not one iota to say that they were and are limited in an inventory sense in ways that Amazon never was, and certainly isn’t now. There’s no way to put a number on it here, but the serious bet is that a large majority of those whose self-description includes “author” would not be able to add the latter to their bio if Amazon didn’t exist.

This basic economic truth has plainly been ignored by Lina Khan and her colleagues at the FTC. In their zeal to take down Amazon for its dominance in the online shopping space, they’re puzzlingly attacking Amazon for prospering in a market that it created, and that it created in the face of massive, supercilious skepticism from the biggest of the big of old-line retail.

The FTC’s attack on Amazon puts it and the FTC in an odd position. Think about it. If only Amazon hadn’t succeeded, or better yet if it had failed in its efforts to create a market for sales over the internet, then Khan et al wouldn’t be attacking it. Amazon’s seeming offense is that having discovered a market that no one knew existed, and having proceeded to expose how lacking the business models of the big and boxy were, Amazon is now forced to defend itself against the biggest of the big in the federal government. This previous irony is seemingly lost on Khan...But that’s a digression.

As previously mentioned, Amazon created a market and marketplace for authors that previously didn’t exist. It did the same for third party sellers in general. Vast as WalmartWMT, TargetTGT, and Costco superstores are, there’s a reason shelf space is so incredibly difficult to come by in all three: there are severe limits to what can make it onto shelves.

Please keep the above statement of reality well in mind with Khan’s assertion that “Amazon now takes one of every $2 that a seller makes.” At first glance the alleged 50/50 split enjoyed by Amazon perhaps comes off as excessive until it’s recognized that absent Amazon, countless third party sellers are splitting nothing with no one. As it has for authors, Amazon has created a market for sellers that almost certainly didn’t exist before it, and if they did, the interfacing with customers in no way resembled the global one that Amazon presently provides sellers.

It’s also worth considering the alleged 50/50 split through the prism of the aforementioned superstore concepts. Not only is getting on the shelves a major victory in and of itself, that it’s a victory exists as powerful evidence that Walmart, Target and Costco similarly drive a hard bargain with their sellers. With good reason. Yet Amazon is the FTC’s target.

The FTC is also attacking Amazon for demanding that its sellers not offer lower prices elsewhere. Unknown is what the problem is. If Amazon is going to provide such a valuable platform to sellers, one that’s visited by billions every minute, it’s only logical that it would desire the best pricing for its billions of customers.

The more one reads about the FTC’s case, the more and more apparent the FTC’s weak hand is. As opposed to it revealing damages to the merchants who sell on Amazon, what it’s actually revealing is how many small businesses owe their very existence to the corporation that Lina Khan is now mindlessly attacking.

John Tamny is editor of RealClearMarkets, President of the Parkview Institute, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors ( His latest book is The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution.

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