That's a hell of a lot of money to hand over to a middleman, but it's not like vendors have much choice. The vast majority of America's affluent households are Prime subscribers (depending on how you define "affluent household" it's north of 90%). Prime households prepay for a year's worth of shipping, so it's only natural that they start their shopping on Amazon, where they've already paid the delivery costs.

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And because Amazon reliably meets or beats the prices you'd pay elsewhere, Prime subscribers who find a product on Amazon overwhelmingly *stop* their shopping at Amazon, too.

At this point you might be thinking a couple things:

I. Why not try to sell the *non*-affluent households, who are far less likely to subscribe to Prime? and

II. If Amazon has the lowest prices, what's the problem if everyone shops there?

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The answers to these two questions are intimately related, as it happens.

Let's start with selling to non-affluent households - basically, the bottom 90% of American earners. The problem here is that everyone who isn't in that top 10% is pretty goddamned *broke*. It's not just decades of wage stagnation and hyperinflation in health, housing and education costs.

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It's also that every economic crisis of this century has resulted in a "K-shaped" recovery, in which "economic recovery" means that rich people are doing fine, while everyone else is worse off than they were before the crisis.

For decades, America papered over the K-shaped hole in its economy with debt. First it was credit cards. Then it was gimmicky mortgages - home equity lines of credit, second mortgages and reverse mortgages. Then it was payday lenders.

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Then it was "buy-now/pay-laters" that let you buy lunch at Chipotle on an installment plan that's nominally interest-free, but is designed to trap you with *massive* penalties if you miss a single payment.

This produced a median American who ian't just cash-poor - they are cash-*negative*, drowning in debt. And - with the exception of a brief Biden intercession - every presidential administration of the 21st century has enacted policies that favor creditors over debtors.

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Bankruptcy is harder to declare, and creditors can hit you with effectively unlimited penalties and confiscation of your property and wages once your cash is gone. Trump has erased all the small mercies of the Biden years - for example, he just forced 8,000,000 student borrowers back into repayment:

prospect.org/2025/12/16/gop-fo…

The average American worker has $955 saved for retirement:

finance.yahoo.com/news/955-sav…

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GOP Forcing Eight Million Student Loan Borrowers Into Repayment

The most affordable of all the federal repayment programs is ending sooner than planned after Trump conspired with red-state attorneys general to kill it.

^{Whitney Curry Wimbish (The American Prospect)}

There's plenty to worry about in a K-shaped economy - big things like "political instability" and "cultural chaos" (the fact that most people are broke has a lot to do with the surging fortunes of gambling platforms). But from a seller's perspective, the most important impact of the K-shaped economy is that only rich people buy stuff. Selling to the bottom 90% is a losing proposition because they're increasingly too broke to buy *anything*:

pluralistic.net/2025/12/16/k-s…

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Combine the fact that the richest 10% of Americans all start their shopping on Amazon with the fact that no one else can afford to buy anything, and it's easy to see why merchants would stay on Amazon, even when junk fees hit 60%.

Which brings us to the second question: if Amazon has the best prices, what's the problem with everyone shopping there?

The answer is to be found in the California Attorney General's price-fixing lawsuit against Amazon:

oag.ca.gov/news/press-releases…

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Attorney General Bonta Exposes Amazon Price Fixing Scheme Driving Up Costs for Americans, Asks Court to Immediately Halt Illegal Conduct

New evidence shows Amazon, its vendors, and competing retailers are price fixing, hiking up prices for consumer products and making Amazon richer and richer OAKLAND — California Attorney General Rob Bonta last night filed a request for a preliminary …

^{State of California - Department of Justice - Office of the Attorney General}

The suit's been running for a long time, but the AG's office just celebrated a milestone - they've finished analyzing the internal memos they forced Amazon to disgorge through civil law's "discovery" process. These internal docs verify an open - and very dirty - secret about Amazon: the company uses its power to push up prices *across the entire economy*.

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Here's how that works: sellers *must* sell on Amazon, which means they're losing $0.50-$0.60 on each dollar. The obvious answer is aising prices. But Amazon knows its power comes from offering buyers prices that are as low or lower than the prices at all its competitors.

Amazon *could* ban its sellers from raising prices, but if they did that, they'd have to accept a smaller share of every sale (otherwise most of their sellers would go broke from selling at a loss on Amazon).

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So instead, Amazon imposes a business practice called "most favored nation" (MFN) pricing on its sellers.

Under an MFN arrangement, sellers are allowed to raise their prices on Amazon, but when they do, they must raise their prices *everywhere else, too*: at Walmart, at Target, at mom and pop indie stores, and at their own factory outlet store.

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