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First, I think the majority of products on Amazon are not long-tailed, but let's discuss them anyways. Suppose there's some product called A with a 50% profit margin. If that profit margin rises, competitors will likely enter the market.
When competitors enter the market, prices fall. If that profit margin falls, competitors will not enter the market, sustaining prices where they are or increasing them.
So, for long-tailed products, lowering fees should, over the long-run, increase competition, which will lower prices for consumers.
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