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Once upon a time I worked at an ebook company. We were naively trying to compete with Amazon (i.e. we sold every book we could get our hands on). Sometimes we'
by rahilb 10y ago
Once upon a time I worked at an ebook company. We were naively trying to compete with Amazon (i.e. we sold every book we could get our hands on).
Sometimes we'd negotiate a deal with a publisher, and slash the price of a book to a point where no one involved in the transaction was making money, sometimes we and the publisher would be losing money... Without fail within an hour the list price of the content on Amazon would be exactly what we set.
Amazon were/are prepared to eat the loss: I suspect this is the case for all products that are sold by Amazon. It was a very effective strategy for them. My company went into administration after just 9 months.
- ortusdux 10y agoI once read the account of a student who gamed the bots sellers use to competitively price their products in order to get cheap textbooks. The person made a dummy seller account, setup a bot, and listed the books they needed. As they lowered their listing prices, the real sellers' bots auto-price matched. The student then bought all their books at ~1/10th the original price, canceled any orders they may have received, and deleted their store.
- i336_ 10y agoThat sounds heartwarmingly difficult to police...
- ergothus 10y agoA friend of mine once claimed that Amazon could sell at cost and still profit - they'd charge the customer for an item immediately, but have 30 or 60 days until they had to pay the supplier, so the interest on the payment in the meantime was profit. Not a lot on a $15 collection of toilet paper (for example), but multiple by the number of Amazon customers... Of course, that skips the costs of Amazon staffing and infrastructure, and I'm sure Amazon sells most items above cost (and potentially some below), but I took it as a good example of how the scale involved meant that few can compete with Amazon.
- discodave 10y ago> but have 30 or 60 days until they had to pay the supplier, so the interest on the payment in the meantime was profit That's a very common tactic in retail. Amazon didn't invent it, even if they did lean on it heavily.
- ScalaFan 10y agoSome credit card companies do exactly that. It is an old game.