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I was getting confused by the "FBA" term, so for those curious this almost certainly means "Fulfilled By Amazon" which is the program where you ship your produc

I was getting confused by the "FBA" term, so for those curious this almost certainly means "Fulfilled By Amazon" which is the program where you ship your product to Amazon, list it there, and they pull it from their warehouse and ship it - basically using Amazon as a drop shipper. That's almost certainly a hard business to make money on - if you're doing common off-the-shelf items of any value, Amazon can simply add those themselves, and they're probably getting a better price on them with bulk purchases than anyone doing FBA can get. If it's direct sales of items you produce yourself then there are drawbacks if your items don't sell (high charges to ship them back to you apparently mean a lot of them end up being destroyed) or if you get targeted by scammers (e.g. NPR's Planet Money #724 "Cat Scam"[1], IIRC the "scam" part comes in with returns). [1] http://www.npr.org/sections/money/2016/09/14/493810206/episode-724-cat-scam http://www.npr.org/sections/money/2016/09/14/493810206/episo... and the Entrepreneur article it's based on https://www.entrepreneur.com/article/278622 https://www.entrepreneur.com/article/278622 in which people sell on eBay for 5-15% above the Amazon price, then simply order through Amazon and send as a gift. Returns go to Amazon and cost everyone except the drop shipper money.

s0rce 10y ago
I fell victim to this scam once, we lost our dog's favorite ball and looked on Amazon to get another, sadly, it was discontinued. Checking e-bay we saw some listings for the original ball. Ordered one and we eventually received, drop shipped from Amazon the new version of the ball. The seller clearly didn't update the autogenerated listing to the reflect the product Amazon was actually selling. I then returned the ball since I didn't want the new version and if I did I could have got it for Amazon for cheaper and easier in the first place. Other than cases of false advertising (likely unintentional here but still annoying) who goes to ebay before just buying the item from Amazon (maybe foreign buyers?). Nearly 100% of the time the shipping will be more expensive and the return policy worse, never mind the entire experience.
- fencepost 10y ago
  > who goes to ebay before just buying the item from Amazon[?] It's not so much people going to eBay then Amazon, it's people who go to eBay and never go anywhere else because it's obvious to everyone (in their mind) that eBay is of course going to be cheaper. They're buying through their preferred retailer, and their preferred retailer is eBay.
  - grapeshot 10y ago
    In my experience, eBay is usually cheaper than Amazon these days, especially if the buyer doesn't have Prime. Also because many eBay sellers still don't charge sales tax.
- bigtunacan 10y ago
  "who goes to ebay before just buying the item from Amazon" My mom and dad. This is not tongue in cheek, it is my personal experience. I see many older people that still buy from eBay. They are a bit uncomfortable with the web already, but they got into buying some things on eBay, now they are used to it and they don't want to "learn something new". I think eBay is a declining platform, but that cow still has a lot of milk left in it.
  - robryan 10y ago
    Most big sellers will list on both and eBay's fees are lower. So in terms of marketplace products you can likely find them cheaper on eBay.
- reeddavid 10y ago
  > who goes to ebay before just buying the item from Amazon I do, all the time. For one, the exact same products are often cheaper on eBay. Second, it's much easier to discover the right items on eBay. Amazon search/sort/filter is absolutely terrible unless you're looking for a specific model or just want the best seller. It's a very fuzzy search, so you can't force an exact match on title. eBay in contrast allows you to use booleans in the search terms, and makes it possible to filter by well structured category-specific data.
- tempestn 10y ago
  In Canada you can often find Amazon items resold on ebay with much more reasonable international shipping. With Amazon, shipping is almost always prohibitively expensive for items not available on the regional domain (amazon.ca).
bootlooped 10y ago
In response to your 2nd paragraph. I work in e-commerce and strongly believe that Amazon uses 3rd party sellers to scout new products. If a seller's product gets too good they run the risk of Amazon moving on it. It's not just that Amazon can get it cheaper, they can afford to sell at a loss for as long as it takes to push out competition.
- shostack 10y ago
  This 1000x. It didn't really make sense for Amazon to do all the initial work here when they can have others essentially paying them for the privilege of doing their market research for them while also shouldering all the risk. Personally I'll be glad to see FBA and all the affiliate sites dry up as they negatively impacted the marketplace IMHO. Now that Amazon has the data they are going about cutting out the middlemen and leveraging their position to eat up the extra margin.
  - SomeStupidPoint 10y ago
    FBA and co-mingled inventories have destroyed my trust in the "Amazon" brand, to the point they're basically my last resort to find something and even then, only cheap generic things.
- gozur88 10y ago
  That was my impression. It's like being a small player in any market - if any particular product does too well it will attract the attention of one of the big fish. I don't think I'd sell through Amazon unless I had an exclusive product.
  - robryan 10y ago
    I think you have to see it as short term revenue. There are opportunities right now, but they might not be there for long and I wouldn't stake my business on them.
    - gozur88 10y ago
BeetleB 10y ago
Disclaimer: I've sold stuff via FBA. Not much - just enough to "try it out". Probably made about $100/mo during my experiment. >That's almost certainly a hard business to make money on - if you're doing common off-the-shelf items of any value, Amazon can simply add those themselves, and they're probably getting a better price on them with bulk purchases than anyone doing FBA can get. But Amazon does not really want to get into all product categories. Much of what many of us buy from Amazon is FBA, where Amazon themselves are not selling it. People who do not know FBA often do not realize they are not buying it from Amazon. Regarding the Cat Scam: I completely disagree that it is a scam. In fact, the Planet Money journalist himself implied he felt it was a legitimate business: The people were providing value, and were making the FBA person's sales go up. He hurt himself by pulling the product from Amazon. There is a reason Amazon allows drop shipping. It brings everyone money. Amazon, the FBA seller, eBay and the eBay seller. People try to paint it as exploiting unwary consumers, but that's true any time you have a price difference between retailers. Effectively, the drop shipper provided the FBA seller access to another market (eBay), with a higher return rate. It was a net profit, not a net loss. It may just be that for this one person it was reducing his profits, but in general, this strategy increases revenue, not decreases it.
- joemi 10y ago
  Middleman sellers might not technically be a scam, but it's not often beneficial to all parties. I've spent some time working for a bookstore that has decent quantity of sales on Amazon, so that's where my perspective comes from. Some issues with middlemen: - First, a lot of middlemen ALWAYS email the seller after placing an order, expecting the seller to omit any mention of the seller and how much the product cost on Amazon. Further, they request that the seller send a separate email with the tracking info for their orders. While this is probably find for random small sellers on Amazon, for larger ones like the one I was at, honoring all the middlemen's requests would cause HUGE shipping delays for all products, middleman or regular, just to deal with all the emails and special requests. - Often they'll email again ("angrily", though it's just a canned response) if an item hasn't arrived 3 or so days after they placed the order. Even if the order was on a Friday night. And even if it's going from one side of the country to the other via the cheapest/slowest shipping method offered. So that's more needless emails to waste the seller's time. - If there's an issue with the order, the middlemen often do not pass on details of the issue to the seller. Instead they just say (effectively) "There was an issue. I demand a full refund." Often issues can be resolved with exchanges or returns, but so many middlemen just demand full refund with no returns. - Due to poor listings wherever the middlemen are relisting the Amazon products, the middlemen's customers often aren't aware of all the details of what they order. We'd regularly get things sent back and the complaint was "it's a used book" when that's exactly what was listed on Amazon. - Some middlemen sellers are A-z Claim happy... Threatening to file a claim in their very first email to the seller, when they ask for no invoice or reference to the seller. We dealt with a few who would ask that you'd print out their own packing slip to send with the order and that you'd write their name on the return address of the package instead of your own. - Often, middlemen include "(NO INVOICE)" somewhere in the shipping address, as a further instruction to seller to omit pricing info. Removing that part from a more automated shipping process (like larger stores use) adds processing time and increases possibility of mistakes. Plus Amazon requires that orders be shipped to the address provided, so I'm still not even sure if it breaks Amazon's policies or not to remove that from the address. - We would frequently get confused or angry emails or phone calls from customers who bought something from a middleman seller who in turn bought it from us, because they'd see that our return address wasn't the middleman's name, or we'd include a packing slip (middlemen don't always ask for it to be omitted, and we wouldn't always comply if they did anyway) with our info and they'd see the price it really cost. That means more customer service time spent on that, and an upset end customer.
sfifs 10y ago
FBA is Amazon's way of populating their store shelves with someone else's working capital. It's only going to go up, not down because every dollar sold by the seller means a dollar if cash freed up from working capital requirements for Amazon. Amazon's competitive advantage is the marketplace which gets an unrivalled number of eyeballs and their warehousing amd logistics operations. They're perfectly happy to rent these out to other sellers rather than lock in money into inventory - unless profits are outrageously high.

s0rce 10y ago

I fell victim to this scam once, we lost our dog's favorite ball and looked on Amazon to get another, sadly, it was discontinued. Checking e-bay we saw some listings for the original ball. Ordered one and we eventually received, drop shipped from Amazon the new version of the ball. The seller clearly didn't update the autogenerated listing to the reflect the product Amazon was actually selling. I then returned the ball since I didn't want the new version and if I did I could have got it for Amazon for cheaper and easier in the first place. Other than cases of false advertising (likely unintentional here but still annoying) who goes to ebay before just buying the item from Amazon (maybe foreign buyers?). Nearly 100% of the time the shipping will be more expensive and the return policy worse, never mind the entire experience.

fencepost 10y ago
> who goes to ebay before just buying the item from Amazon[?] It's not so much people going to eBay then Amazon, it's people who go to eBay and never go anywhere else because it's obvious to everyone (in their mind) that eBay is of course going to be cheaper. They're buying through their preferred retailer, and their preferred retailer is eBay.
- grapeshot 10y ago
  In my experience, eBay is usually cheaper than Amazon these days, especially if the buyer doesn't have Prime. Also because many eBay sellers still don't charge sales tax.
bigtunacan 10y ago
"who goes to ebay before just buying the item from Amazon" My mom and dad. This is not tongue in cheek, it is my personal experience. I see many older people that still buy from eBay. They are a bit uncomfortable with the web already, but they got into buying some things on eBay, now they are used to it and they don't want to "learn something new". I think eBay is a declining platform, but that cow still has a lot of milk left in it.
- robryan 10y ago
  Most big sellers will list on both and eBay's fees are lower. So in terms of marketplace products you can likely find them cheaper on eBay.
reeddavid 10y ago
> who goes to ebay before just buying the item from Amazon I do, all the time. For one, the exact same products are often cheaper on eBay. Second, it's much easier to discover the right items on eBay. Amazon search/sort/filter is absolutely terrible unless you're looking for a specific model or just want the best seller. It's a very fuzzy search, so you can't force an exact match on title. eBay in contrast allows you to use booleans in the search terms, and makes it possible to filter by well structured category-specific data.
tempestn 10y ago
In Canada you can often find Amazon items resold on ebay with much more reasonable international shipping. With Amazon, shipping is almost always prohibitively expensive for items not available on the regional domain (amazon.ca).

bootlooped 10y ago

In response to your 2nd paragraph. I work in e-commerce and strongly believe that Amazon uses 3rd party sellers to scout new products. If a seller's product gets too good they run the risk of Amazon moving on it. It's not just that Amazon can get it cheaper, they can afford to sell at a loss for as long as it takes to push out competition.

shostack 10y ago
This 1000x. It didn't really make sense for Amazon to do all the initial work here when they can have others essentially paying them for the privilege of doing their market research for them while also shouldering all the risk. Personally I'll be glad to see FBA and all the affiliate sites dry up as they negatively impacted the marketplace IMHO. Now that Amazon has the data they are going about cutting out the middlemen and leveraging their position to eat up the extra margin.
- SomeStupidPoint 10y ago
  FBA and co-mingled inventories have destroyed my trust in the "Amazon" brand, to the point they're basically my last resort to find something and even then, only cheap generic things.
gozur88 10y ago
That was my impression. It's like being a small player in any market - if any particular product does too well it will attract the attention of one of the big fish. I don't think I'd sell through Amazon unless I had an exclusive product.
- robryan 10y ago
  I think you have to see it as short term revenue. There are opportunities right now, but they might not be there for long and I wouldn't stake my business on them.
  - gozur88 10y ago

BeetleB 10y ago

Disclaimer: I've sold stuff via FBA. Not much - just enough to "try it out". Probably made about $100/mo during my experiment. >That's almost certainly a hard business to make money on - if you're doing common off-the-shelf items of any value, Amazon can simply add those themselves, and they're probably getting a better price on them with bulk purchases than anyone doing FBA can get. But Amazon does not really want to get into all product categories. Much of what many of us buy from Amazon is FBA, where Amazon themselves are not selling it. People who do not know FBA often do not realize they are not buying it from Amazon. Regarding the Cat Scam: I completely disagree that it is a scam. In fact, the Planet Money journalist himself implied he felt it was a legitimate business: The people were providing value, and were making the FBA person's sales go up. He hurt himself by pulling the product from Amazon. There is a reason Amazon allows drop shipping. It brings everyone money. Amazon, the FBA seller, eBay and the eBay seller. People try to paint it as exploiting unwary consumers, but that's true any time you have a price difference between retailers. Effectively, the drop shipper provided the FBA seller access to another market (eBay), with a higher return rate. It was a net profit, not a net loss. It may just be that for this one person it was reducing his profits, but in general, this strategy increases revenue, not decreases it.

joemi 10y ago
Middleman sellers might not technically be a scam, but it's not often beneficial to all parties. I've spent some time working for a bookstore that has decent quantity of sales on Amazon, so that's where my perspective comes from. Some issues with middlemen: - First, a lot of middlemen ALWAYS email the seller after placing an order, expecting the seller to omit any mention of the seller and how much the product cost on Amazon. Further, they request that the seller send a separate email with the tracking info for their orders. While this is probably find for random small sellers on Amazon, for larger ones like the one I was at, honoring all the middlemen's requests would cause HUGE shipping delays for all products, middleman or regular, just to deal with all the emails and special requests. - Often they'll email again ("angrily", though it's just a canned response) if an item hasn't arrived 3 or so days after they placed the order. Even if the order was on a Friday night. And even if it's going from one side of the country to the other via the cheapest/slowest shipping method offered. So that's more needless emails to waste the seller's time. - If there's an issue with the order, the middlemen often do not pass on details of the issue to the seller. Instead they just say (effectively) "There was an issue. I demand a full refund." Often issues can be resolved with exchanges or returns, but so many middlemen just demand full refund with no returns. - Due to poor listings wherever the middlemen are relisting the Amazon products, the middlemen's customers often aren't aware of all the details of what they order. We'd regularly get things sent back and the complaint was "it's a used book" when that's exactly what was listed on Amazon. - Some middlemen sellers are A-z Claim happy... Threatening to file a claim in their very first email to the seller, when they ask for no invoice or reference to the seller. We dealt with a few who would ask that you'd print out their own packing slip to send with the order and that you'd write their name on the return address of the package instead of your own. - Often, middlemen include "(NO INVOICE)" somewhere in the shipping address, as a further instruction to seller to omit pricing info. Removing that part from a more automated shipping process (like larger stores use) adds processing time and increases possibility of mistakes. Plus Amazon requires that orders be shipped to the address provided, so I'm still not even sure if it breaks Amazon's policies or not to remove that from the address. - We would frequently get confused or angry emails or phone calls from customers who bought something from a middleman seller who in turn bought it from us, because they'd see that our return address wasn't the middleman's name, or we'd include a packing slip (middlemen don't always ask for it to be omitted, and we wouldn't always comply if they did anyway) with our info and they'd see the price it really cost. That means more customer service time spent on that, and an upset end customer.

sfifs 10y ago

FBA is Amazon's way of populating their store shelves with someone else's working capital. It's only going to go up, not down because every dollar sold by the seller means a dollar if cash freed up from working capital requirements for Amazon. Amazon's competitive advantage is the marketplace which gets an unrivalled number of eyeballs and their warehousing amd logistics operations. They're perfectly happy to rent these out to other sellers rather than lock in money into inventory - unless profits are outrageously high.