Welcome to the Tucker Carlson podcast, where every story is an honest story, and not one of them has been massaged or influenced or censored by a corporate gatekeeper. We've made a lot of these. You could find all of it and a lot of exclusive content at tuckercarlson. Com. We hope you'll check that out. Here's today's episode. 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 It's called Amazon: Market Power, Monopoly. 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. 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 for 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.

His most important online shop The 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 Schack 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 Schack shows us.

I'm going to change the price to €349. We will see that in about 15 minutes, the buy box here is gone.

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 in a 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. In order to turn a profit, he was forced to jack his prices. Watch.

We are probably going to have to raise prices.

Why? What's going on?

What Amazon did is they increased all the fulfillment fees by about 5%. If you look over here, we got an email, shipping Brainflace 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 50 cents. So maybe we're going to go to 17.99, up from 16.99.

And-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.

Oh, so it's not really a free market tactic. If they're forcing you to raise your prices on other platforms, it's a monopoly tactic, and there's a difference. That's not the free market you just saw. That's how monopolies operate. Molson Hart knows that very well. He's lived it. He's the man you just saw in that clip, and he joins us now. Molson Hart, thanks for joining us. The clip we just played is a fair representation of your life as an Amazon seller.

Yeah, that's absolutely Absolutely a fair representation of our life as an Amazon seller. If your products are cheaper off Amazon than they are on Amazon, then you lose all your sales on Amazon, which is a big problem for us because 90% of our sales come from Amazon.

What you're saying, I think, is that Amazon sets the price market-wide, not just on its own site, but on other sites. Is that correct?

In a way, that's true. So if you look at the statistics, and a lot of people have a different statistics out there, Amazon controls roughly 50 % of the whole online e-commerce market, depending on how you calculate it. And for us, since 90 % of our sales come from Amazon, and since Amazon is more expensive to sell on than other platforms like eBay, Walmart, or even our own website, Amazon, in a way, does set the price. Because if we price our products lower off of Amazon because those Those off Amazon platforms are cheaper than Amazon, we lose 90 % of our sales on Amazon. So we have to constantly keep our prices up off Amazon. And we can't lower our prices on Amazon to the costs off Amazon because then we'll end up losing money because Amazon is more expensive to sell on than it is to sell on off Amazon.

It's fascinating. Thanks for watching the episode with Molson Hart. It gives you a sense of what Amazon is really like, worse than you thought. So if you don't want to use Amazon, and up till now, you haven't had much of a choice because it's effectively a monopoly, well, now you don't have to because there's an option, a new service made for you. It's called Public Square, and they're building a brand new way of conducting commerce, selling and buying that goes back to America's roots. 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. It's also a great place to buy what other people make. It's easy. You can add your business in less than 10 minutes for free and sell your products nationwide. To learn more, go to publicsquare/Tucker. They're a sponsor of this program, and we're happy to have them. Proud, in fact. So if I could just 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 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 monitoring the whole Internet to see if prices prices are higher or lower on and off Amazon. And it might also be possible for... There used to be a button on pages on Amazon where consumers could report a better price elsewhere. So there might be 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. It's like they're part of the surveillance data. You wouldn't imagine because you're selling on Amazon that Amazon would be watching your behavior in other places, 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 seller signed with Amazon that would say that you would not sell your products for less off Amazon. And then there was 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 explain why it's so hard to get these narratives about Amazon. But I wrote an article about it, and that article ended up getting wrapped up into an FTC lawsuit, the State of California versus Amazon. And that's why we're talking about it today.

Just back up a sentence, if you would. What do you mean it's so hard to get that story out?

So as I said, 90% of our sales come from Amazon. And no one in their right mind wants to bite the hand that feeds them. So the people who know most about Amazon are the sellers who are selling on Amazon, like my company. And so 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 with some bad policies. So don't want to bite the hand that feeds you. And then the second thing is my company, all companies that sell on Amazon, they sign a contract that says that 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. 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. 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 hard to get this information out there.

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

Defense Department? Like the Department of Defense or like lawyers?

You're describing a company that's a lot, and of course, we all 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.

Well, okay. 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 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. It is an attorney's job to discredit someone who 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 I went through 16 hours of depositions, 8 hours from the state of California, 8 hours from Amazon. I spent 20 or 30 hours collecting documents. 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.

Right. I didn't think that I'd have a movie studio and be able to control coverage of their own company a few years ago. You never know where these things are going, Molson Hart. But I just wonder, since you obviously thought about this in larger terms because you've been involved or witnessed to these lawsuits, Isn't we approaching the definition of a monopoly? A business is something that controls its silo where it operates. A monopoly is a business that controls an entire market. And what you're describing is a company that controls online commerce, the pricing.

Amazon, with its weight and 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're 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. And like I said before, I, sincerely, not just saying it because I 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. And I think the best outcome would be for them to 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 I think it would just be better if they ended the bad policies rather than potentially being broken up or something like that.

But again, that's not really for me to decide.

Well, they're not going to... I mean, he owns the Washington Post, which is the main news source in the capital city, so I don't think they're going to be broken up anytime soon. I suspect the Post would editorialize against that if it came down to it.

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Let me just ask you, since it's your business, since you're in this business, who makes money selling on Amazon?

Amazon? Yeah. For us, we have a... One of our best sellers is Brainflakes. I got my prop. It's $17, okay? On Amazon right now. And after all the fees are paid, we get seven out of the $17, okay? So it's $17 on Amazon. After the fees are paid, we receive seven. With that $7, we have to pay rent, insurance, all of the employees. And then we also have to pay for the cost of the product.

Wait, wait, wait. The $10 you're subtracting from the $17 does not include your manufacturing costs?

Correct. Yeah. You start at $17, $10 of those dollars, and I can run through the fees.

Would you mind? Because that's a crazy number. Yeah, let's do it. Yeah.

Yeah. Do you want me to break down how we get to that number? Would you mind?

Yes. I mean, wait, hold on. I'm a little bit surprised. I mean, I thought they took a VIG of some kind, and they should. They're selling your product for you. That's great. But the fact that they would take the majority of the retail price is stunning to me.

Well, 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. If the product doesn't sell, Amazon has no risk. They can actually just continue to charge us fees. Not only that, they'll charge us extra double fees for having too much inventory at Amazon. So, yeah, at the risk of embarrassing myself on your I will attempt to do some math, and I'll tell you how we go from $17. Yes, I would love that. All the way down to our profit. Yeah, let's do it. All right, so $17. First, in our category, in toys, Amazon charges 15 %. Okay, So let's call that around 250. Okay, so 15 % of 17 dollars. So now I'm down to 1450. Okay, then we have to pay a fulfill fee to Amazon. That's around six dollars and 60 cents. So I think about 14.50, so that gets me to eight. That gets me to seven dollars and 90 cents. So just those two things, the 15 % commission and then the six dollar 60 cent fulfill fee that Amazon charges, I believe got me down to...

I'm embarrassing myself, but something like the high sevens. And then we have to pay advertising and storage and shipping to Amazon, and that gets us down to around seven dollars. So we receive seven dollars when one jar of brainflakes is sold. And with that seven dollars, we have to pay our rent, our employees' salaries, our insurance, we even have to pay for... We have to insure Amazon as well. And then we have to pay for the cost of the product, which is, let's say, $3.50. So on the $17, we'll make, depending on what our costs are, because costs go up and down, between $3 to $4. So our profit is about $3 to $4 out of the $17. And there are all sorts of crazy fees I could walk you through. It's wild.

That is amazing. That's not at all what I imagined at all. So the strong majority goes to Amazon, right off the top. So then how could you make a living doing? I mean, how many brainflakes do you have to sell to take a week off and go to Disney World in August?

Disney World is pretty expensive. Yeah, it is. We're lucky to sell hundreds of thousands of jars of brainflakes and bigger sets. And so if we're making three to four dollars 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.

Does anyone get rich selling that you know of, get rich selling on Amazon?

Yeah, people still do get rich. I think a lot of Chinese companies have gotten rich as well. Pretty crazy So I'll take a statistic for you. Over 50 % of the top sellers on Amazon are not American. So in the US marketplace, let's say 52 % of the sellers are not American. And of that 52 %, the top sellers are... Of that 52 %, 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. It's our language. They just clean up. They do very well in terms of market share. They don't all make money, but many of them do. It's still possible to make money on Amazon.

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.

Yeah, that's such an excellent point. 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 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, 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 directly on Amazon to US consumers. And the net result of this, because the playing field is in the Chinese favor, and I can explain why, is that the US wholesale distribution products project design industry has come under threat from very tough, difficult competition from China. And so now we lost our factories. And in my opinion, I think we're going to lose this middle part of economy, largely to companies in China.

How does China have a structural advantage in this?

For one, these Chinese sellers, they're selling on Amazon. They don't have to file US 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, and that's enough. They're less susceptible to lawsuits because they're overseas, and they may or may not have government subsidies. I mean, 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. There it is to communicate over video, fly to China, deal potentially with a quarantine and work that out in order to make something new. So the Chinese have a lot of advantages when it comes to selling on Amazon. And what's wild is we're sellers on Amazon. Whenever When you get an email from Amazon, the top part, it's in English, and then the bottom part, it's all in Chinese because so many sellers are Chinese on Amazon.

Amazing. Are you going to continue doing this?Selling.

On Amazon?Yeah. For many years, we've tried to reduce that. It used to be 98 %. Usually before, 98 % of our sales were on Amazon. We've gotten it down to 90 %. And then in 2023, we've gotten it down a little a bit lower. And so we're just continuously trying to reduce our dependents on Amazon. But it's so difficult in the toy space. It's hard, but I like what I'm doing. I like my team. And it feels really good to make something and then to It makes something that's good for people. It helps spatial thinking. It's an educational toy. Yeah, I want to keep doing it.

Last question, I can't resist. Is Molson Hart your real name?

No, it's a fake name. No, it's It's real.It's.

Like the greatest name ever.My name's Hilton.

My brother's name is Hilton, and the joke is he's where he was conceived, and I'm why. My dad used to work for Molson Brewers up in Montreal, Canada, and he saw it fit to name me after the brewery, even though I'm unrelated. My brother was, I can't believe it, he was conceived in a Hilton hotel in Arizona.

Your parents are heroes. I've never met them, but I like them so much. You should have a sense of humor about your own children. Thank you. Molson Hart, thank you for that explanation. That was absolutely the most interesting thing I've heard today. I appreciate it. Thanks for listening to the Tucker Carlson podcast. If you liked it, be sure to hit subscribe and leave a review. Remember, we only release some of our interviews as podcast. The only place you can get all of it, including past episodes, is tuckercarlson. Com, and we hope you will.