12 ms·

Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

164 points by vl 7y ago

seem_2211 7y ago
This sounds bad, but is honestly anyone surprised? Client/customer concentration is something that every business needs to be watching as a matter of critical importance. The big boys will always play rough and negotiate things on their terms when they can get away with it - be it the Government, Apple, Walmart or Amazon. I have sympathy for the companies that are about to be put under immense stress, but it should also be something that every business has already planned for.
- whatshisface 7y ago
  >is honestly anyone surprised? I'm surprised. I thought that when the entire store was run by computers the marginal cost of adding another supplier would be zilch, and the long tail would prosper.
  - URSpider94 7y ago
    The long tail DOES prosper. Nothing is stopping small vendors from selling their products on the Amazon marketplace. If true, it’s just suggesting that Amazon will no longer place purchase orders and hold inventory on its books. Even with automation of on-boarding, scaling the selection still requires scaling inventory costs if it’s merchandised by Amazon itself.
- save_ferris 7y ago
  No, it's not surprising. The lack of surprise that a company's greed is boundless shouldn't be the standard to which we hold them accountable for their behavior. It's kinda hard to see how Amazon won't eventually collide with antitrust forces at some point. The rise of tech giants like Amazon has largely coincided with their development of entire markets that they control. There's so much money to be made establishing the market and taking small transaction fees as opposed to just bringing a product to an existing market. Not only did Amazon make money by creating the go-to online marketplace, they captured tremendous amounts of data on what people were and weren't buying. This allowed them to spin off cheaper versions of competing products, undercutting the businesses that they were already making money from. They dominate the sales channels, and now they're going after the vendors directly, starting with the small, low-hanging fruit.
  - seem_2211 7y ago
    Right - this isn't new, basically everything you've said also applies to Walmart but twenty years ago.
    - save_ferris 7y ago
      I actually see those two as fairly different. Walmart perfected large-scale logistics and built a network of one-stop-shops across America, taking out small mom-and-pop shops along the way. Amazon set out to be the go-to online shopping platform largely by encouraging small mom-and-pop shops to sell through Amazon. Once the platform was big enough, it started making more sense for Amazon to cannibalize vendors instead of just continuing to let the market grow. Sure, both companies are large behemoths that do their part to decimate local economies and avoid paying taxes, but their strategies were pretty different, IMO.
  - magduf 7y ago
    >It's kinda hard to see how Amazon won't eventually collide with antitrust forces at some point. Where did you get this idea? I don't see how Amazon, or anyone else for that matter, could ever run afoul of "antitrust forces" in the US, because there's simply no such thing in America any more. America hasn't enforced antitrust law in ages. They might have problems in other countries, but the US is by far their largest market, and they have absolutely nothing to worry about here.
    - JumpCrisscross 7y ago
      > America hasn't enforced antitrust law in ages A lot of American antitrust enforcement is private. Witness, for instance, the recent Apple Inc. v. Pepper [1]. (We need more public enforcement. But claiming we have no antitrust enforcement is false.) [1] https://www.scotusblog.com/case-files/cases/apple-v-pepper/ https://www.scotusblog.com/case-files/cases/apple-v-pepper/
lostmymind66 7y ago
This is why I would never base my business on a marketplace like Amazon. You are always beholden to them and the reality is you aren't really independent.
- swalsh 7y ago
  From my reading, it's not removing them from the marketplace. Instead these are suppliers Amazon.com (not the market place) would buy in bulk directly from. They will now need to transition to the marketplace. There is a plus, which is they can probably ask a higher margin... but it also means they're now personally competing with anyone else who may have the same product, and now they're probably going to pay Amazon to warehouse their product.
- matwood 7y ago
  Except that many of those businesses only exist because the reach and customer availability granted by Amazon.
- Analemma_ 7y ago
  Many business don't have a choice. A lot of the time, the choice is "sell on Amazon" or "don't sell". That's what monopsony is, and it's why Amazon needs to be broken up.
  - cptaj 7y ago
    This is completely true. We used to do some development work for a client in florida. They sold all kinds of batteries on amazon. One day, a single dispute brought their whole business down. They had a whole warehouse of employees and they all got fucked because some temp employee somewhere in the world half-read a dispute while hungover from the night before and clicked a button. No appeals, no recourse. Your entire company shut down just like that.
    - awad 7y ago
      Curious - are you able to share more details?
mjevans 7y ago
I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.
- mikehollinger 7y ago
  So... blockchain for product quality? :-) Yeah, I'd like to be able to be able to look into / find who's a member of the bazaar and just fencing products, versus who's selling their own items directly. For example - I wouldn't buy speakers from some random reseller. I'd buy 'em from the original manufacturer, or the handful of "known" resellers that we all know like the big box stores.
  - hn_throwaway_99 7y ago
    This was discussed in depth on HN a while back about why blockchain doesn't really work well for supply chain management: https://blog.smartdec.net/you-do-not-need-blockchain-eight-popular-use-cases-and-why-they-do-not-work-f2ecc6cc2129 https://blog.smartdec.net/you-do-not-need-blockchain-eight-p...
    - deleted 7y ago
      [deleted]
  - englishmaninnyc 7y ago
    Is there any benefit for Amazon to implement that? :(
- bizimsir 7y ago
  Unfortunately Amazon won't have a real reason to do that :(
- bdcravens 7y ago
  Sounds like a great browser extension: identify, with a % of confidence, if the product is available from an Alibaba wholesaler.
mdorazio 7y ago
To bypass the pay/nag wall: https://outline.com/9mHK5d https://outline.com/9mHK5d Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Amazon is basically only going to purchase products for resale from large suppliers, and will shove the rest into the normal marketplace operations where they have to compete with everyone else on actually selling and shipping their products direct to consumers. Also of note is that this won't do anything to address the criticisms of rampant counterfeit and/or garbage quality products on the marketplace.
- rinze 7y ago
  I've always found this extension pretty useful against 'cookie-walls': https://github.com/Cookie-AutoDelete/Cookie-AutoDelete https://github.com/Cookie-AutoDelete/Cookie-AutoDelete. Also, general cookie hygiene.
- Goronmon 7y ago
  Also of note is that this won't do anything to address the criticisms of rampant counterfeit and/or garbage quality products on the marketplace. If anything it will only make it worse, as many of shrinking number of items sold by Amazon will now be tossed into the garbage pile along with everything else in the marketplace.
- JohnFen 7y ago
  > Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Yes, but I avoid the marketplace sellers. I've been burned too often with those -- if I'm going to roll the dice on that sort of thing, I'm better off with eBay.
  - theturtletalks 7y ago
    What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.
baybal2 7y ago
Alibaba tried the same thing. It did not go well The result is well known. It quickly became apparent that very few people went online to buy "upscale brand stuff," and it overloaded their logistics big time
- throwayEngineer 7y ago
  Amazon is no longer the lowest cost and highest quality store. They have become just another store. Moves like this show they are losing their benefits more and more
  - metalliqaz 7y ago
    "just another store" Hah. Their picking and shipping logistics are far and away superior to any other retailer. They offer free 1-day shipping to large swaths of the U.S. for Prime members.
- partiallypro 7y ago
  Have any more information on this? And do you think there is not more market elasticity in the US? It also seems this only effects wholesalers, not the traditional resalers.
  - baybal2 7y ago
    You know that Alibaba have T-mall? It was their original take on "direct upscale retail brands" online mall. They were a late comes after JD had some early success, and followed by countless clones. T-mall was losing money big time, and none of bigger Taobao merchants wanted to move, moreover new Taobao brand stores were beginning to eat into T-mall. So, at around 2016 Alibaba decided to "give them a nudge" with racking up their fees, putting arbitrary limits on their accounts, and blatant "first dose free" offers to switch to T-mall. In the end, only few did, and one who did really did not manage to get full advantage of the platform. Most "upscale" brand suppliers valued control given by having their Taobao store too much to switch to being banal wholesalers. Lately, they reversed their stance on Taobao brand stores. But yeah, they definitely shot themselves in the foot with that move.
JohnFen 7y ago
> Amazon’s aim is to cut costs and focus wholesale purchasing on major brands like Procter & Gamble, Sony and Lego, the people said. That will ensure the company has adequate supplies of must-have merchandise and help it compete with the likes of Walmart, Target and Best Buy. That would cut out most of my purchases from Amazon. It makes no sense to buy stuff from Amazon that I can get from my local big-box retailer, after all.
- throwayEngineer 7y ago
  I've already stopped using Amazon. They are significantly more expensive than Walmart. Which is new, this was not true 4 years ago. They don't have the selection of stores like digikey. They lost their purpose completely. I only use Amazon for Email due to modern Email standards.
  - beauzero 7y ago
    Anecdotal, but that is what my wife did last year. Walmart having the online order with local pickup serves us better and cheaper. It also removed the biggest Walmart barrier for us which is going physically into the store.
  - hello_friendos 7y ago
    Also they've switched to the absolute worst, bottom-of-the-barrel delivery companies in many places. When Canada Post couldn't deliver my package I only had to walk 5 minutes to pick it up. Whoever their new delivery partner is. I'd have to drive to the edge of the city to pick up my package.
  - H1Supreme 7y ago
    Same here. I think that people got used to using Amazon for everything (because of good pricing), and stopped shopping around as much. Their prices are basically suggested retail price at this point. Which, no one should ever pay.
- craftyguy 7y ago
  > That would cut out most of my purchases from Amazon. It makes no sense to buy stuff from Amazon that I can get from my local big-box retailer, after all. I bet you $5 that: 1) their decision was not made in a vacuum with no information And 2) you might not represent a significant portion of their customer base.
swalsh 7y ago
This is a big move, it transitions Amazon from a more traditional retailer, to something more akin to a dropshipper. I'm reminded of Wayfairs Castlegate business. The manufacturer now takes on the responsibility of forecasting, they assume the risk of holding inventory, but Amazon still controls the customer impact things like boxing and shipping.... and they get to do it at the manufacturers cost. It's quite brilliant actually.
trufflepig 7y ago
would this just push the minor-large brands (aukey, anker, etc) into marketplace? Or are these minor-large brands already in the marketplace?
- notatoad 7y ago
  a quick spot check of a bunch of anker products shows they're already a marketplace seller
  - erik_seaberg 7y ago
    Do they at least enforce that Anker products actually came from Anker and not some scammer who's happy to burn my apartment down?
    - kevin_b_er 7y ago
      No. It should hopefully be well known by now that Amazon "commingles" all inventory of a given item. You can never be sure if you'll get a well-made counterfeit on the "marketplace". Even if you PICK WHICH SELLER you get whatever's in the bin that the overworked amazon warehouse sub-sub-sub-contracted employee quickly plucks.
      - trufflepig 7y ago
        is true for big ticket items like apple products and laptops
      - secabeen 7y ago
        Sellers can choose to not co-mingle, but then they have to put a separate UPC code on the item.
        jessaustin 7y ago
        Having done that, can they be sure that another seller won't try to horn in on the new UPC code?
certainstartup 7y ago
This , indeed, has been coming for a long time.
Goronmon 7y ago
So Amazon is going harder into the marketplace side of things, turning Amazon from an online retailer into another version of eBay? This doesn't sound like a positive move for me, but I guess that doesn't necessarily means its bad for Amazon's profitability if other people don't mind rolling the dice on random products by relatively unknown sellers and manufacturers.
- corndoge 7y ago
  Doesn't this article say the exact opposite of what you just said?
  - Goronmon 7y ago
    No? It says Amazon is cutting back on the "Sold by Amazon.com" items and pushing those items onto the marketplace, and only sticking to directly selling items from large manufacturers.
  - cannonedhamster 7y ago
    No. Amazon is pushing smaller sellers into their marketplace platform which is ride with counterfeits, thieves, and garbage products with fake reviews purchased on Facebook. My wife and I stopped going to Amazon because product quality started getting so bad. It's to the point that I trust Alibaba or eBay over Amazon, which is a shame. I suspect there's a lot of less vocal people in the same boat who've started exploring other merchants.
    - delfinom 7y ago
      Yep, I have been alot of stuff from Aliexpress lately because you can find sellers that are quite reputable and actually support their shit somewhat. Amazon? You find people reselling shit from Alibaba and not caring a thing about it.
- whoisjuan 7y ago
  The article doesn't say that at all. It says that they are going to stop sourcing from small wholesalers and buy directly from consumer brands, essentially bypassing other parties and enabling a factory to shipping center channel. If anything is syaing the complete opposite of what you stated in your comment.
mirianbert 7y ago
Antitrust lawsuit coming up in 3, 2, ...
kellrom 7y ago
I partly blame GS1 for not moving fast enough to create an open supply chain network (not just standards).
_red 7y ago
No one ever talks about eBay anymore....but when are we going to collectively realize that they are the best of the "big tech" companies? They've stayed remarkable true to their mission, haven't entered politics (ironic given previous CEO), and continued to offer a good service. Since the commingling of inventory is now so prevalent at Amazon, I find myself using eBay more and more.
- SmellyGeekBoy 7y ago
  I've had nothing but good experiences with ebay over the past few years, and I'm a very heavy user (buying and selling). I've been a member since 2002, FWIW.
  - JohnFen 7y ago
    Me too. eBay has consistently handled disputes quickly and without hassles. Amazon has never managed that, even when they're the ones fulfilling the order.
- walterbell 7y ago
  Even NewEgg sells on eBay, and they have their own website! There is something to be said for the stability of marketplace rules and ecosystem. No rules are perfect, but if the rules are stable, people eventually learn how to interpret signals and assess risk. If the rules are constantly changing, all that hard-earned customer knowledge is discarded at random intervals, because the platform vendor has silently forked/rebooted the economy into a parallel universe. Now you have sellers in the new universe and buyers in the old universe. In a sane regulatory environment, platforms would be forced to put a version number on both the UX and ToS, so people would at least know the universe/rules have changed. As with other mandatory reporting, metrics on public notification would reduce "universe churn" and make it part of the marketing/competitive landscape.
- par 7y ago
  agreed, since Amazon product quality has become more suspect, I've found myself going to eBay for lots of various types of goods. I'm usually more pleased with my eBay experience than my Amazon experience, though I do use Amazon more frequently.
munk-a 7y ago
I really hope this triggers some long needed anti-trust action against amazon - controlling the market place and using that control to execute actions like this is exactly what those laws are there for, this is the first step in a consolidation to force suppliers into less profitable agreements and individual bargaining.
- magduf 7y ago
  What are you smoking? Do you honestly think Trump's justice department is going to enforce any such laws?
  - CamperBob2 7y ago
    It wouldn't surprise me. Bezos is probably at the top of Trump's "enemies list," and I assume (or, rather, hope) that the converse is also true. I don't think it's excessively political to point out that Trump is exactly the sort of President who would use his Justice Department as an instrument to settle personal beefs.
FrancAn7 7y ago
It might be better if it is clear that they are not an open marketplace anymore, ever since amazon basics
chiefalchemist 7y ago
IDK, sounds (mostly?) like a CYA move. That is, the Counterfeit Apocalypse was coming, but this helps them dodge that. I would think similar for all the bogus reviews and rating. I can hear it now, "Oh. Those? Those aren't __our__ products. We only list them." I hate to sound like a cynic, but me thinks Amazon's legal team cooked this up, or at least had a heavy hand in it.
- secabeen 7y ago
  I wonder if they'll give all these small sellers the co-mingle option. If they switch to a model where the original vendor pays the extra to not co-mingle, it might indeed address the counterfeit copy. (Buy at MSRP from the original vendor, and be assured that it's genuine, or buy a discount version from another vendor, and take what you get.)
higherpayusa 7y ago
Another ramification... many suppliers/vendors will now be "more directly" competing with their own customers within the amazon marketplace. Whereas before a vendor could sell a large quantity to Amazon and then smaller quantities (at higher prices) to middlemen and let the middleman fight it out, now they'll be a huge incentive to price in such a way that middlemen get cut out. If this sounds good (hey, no middlemen, better for us) consider this typical situation (I know it well)... Retail company buys toys for sale in store, but uses marketplace for overstock, offsets, and to keep products on shelves fresh... Not a huge profit center, but an important part of "flow" - now the viability of that shrinks as suppliers squeeze prices upwards. And the cycle continues... retailers have to raise prices to make up for what little "volume" sales they do... people stop shopping retail because it is "too expensive" and down go more independent stores.

164 points by vl 7y ago

This sounds bad, but is honestly anyone surprised? Client/customer concentration is something that every business needs to be watching as a matter of critical importance. The big boys will always play rough and negotiate things on their terms when they can get away with it - be it the Government, Apple, Walmart or Amazon. I have sympathy for the companies that are about to be put under immense stress, but it should also be something that every business has already planned for.

whatshisface 7y ago
>is honestly anyone surprised? I'm surprised. I thought that when the entire store was run by computers the marginal cost of adding another supplier would be zilch, and the long tail would prosper.
- URSpider94 7y ago
  The long tail DOES prosper. Nothing is stopping small vendors from selling their products on the Amazon marketplace. If true, it’s just suggesting that Amazon will no longer place purchase orders and hold inventory on its books. Even with automation of on-boarding, scaling the selection still requires scaling inventory costs if it’s merchandised by Amazon itself.
save_ferris 7y ago
No, it's not surprising. The lack of surprise that a company's greed is boundless shouldn't be the standard to which we hold them accountable for their behavior. It's kinda hard to see how Amazon won't eventually collide with antitrust forces at some point. The rise of tech giants like Amazon has largely coincided with their development of entire markets that they control. There's so much money to be made establishing the market and taking small transaction fees as opposed to just bringing a product to an existing market. Not only did Amazon make money by creating the go-to online marketplace, they captured tremendous amounts of data on what people were and weren't buying. This allowed them to spin off cheaper versions of competing products, undercutting the businesses that they were already making money from. They dominate the sales channels, and now they're going after the vendors directly, starting with the small, low-hanging fruit.
- seem_2211 7y ago
  Right - this isn't new, basically everything you've said also applies to Walmart but twenty years ago.
  - save_ferris 7y ago
    I actually see those two as fairly different. Walmart perfected large-scale logistics and built a network of one-stop-shops across America, taking out small mom-and-pop shops along the way. Amazon set out to be the go-to online shopping platform largely by encouraging small mom-and-pop shops to sell through Amazon. Once the platform was big enough, it started making more sense for Amazon to cannibalize vendors instead of just continuing to let the market grow. Sure, both companies are large behemoths that do their part to decimate local economies and avoid paying taxes, but their strategies were pretty different, IMO.
- magduf 7y ago
  >It's kinda hard to see how Amazon won't eventually collide with antitrust forces at some point. Where did you get this idea? I don't see how Amazon, or anyone else for that matter, could ever run afoul of "antitrust forces" in the US, because there's simply no such thing in America any more. America hasn't enforced antitrust law in ages. They might have problems in other countries, but the US is by far their largest market, and they have absolutely nothing to worry about here.
  - JumpCrisscross 7y ago
    > America hasn't enforced antitrust law in ages A lot of American antitrust enforcement is private. Witness, for instance, the recent Apple Inc. v. Pepper [1]. (We need more public enforcement. But claiming we have no antitrust enforcement is false.) [1] https://www.scotusblog.com/case-files/cases/apple-v-pepper/ https://www.scotusblog.com/case-files/cases/apple-v-pepper/

lostmymind66 7y ago

This is why I would never base my business on a marketplace like Amazon. You are always beholden to them and the reality is you aren't really independent.

swalsh 7y ago
From my reading, it's not removing them from the marketplace. Instead these are suppliers Amazon.com (not the market place) would buy in bulk directly from. They will now need to transition to the marketplace. There is a plus, which is they can probably ask a higher margin... but it also means they're now personally competing with anyone else who may have the same product, and now they're probably going to pay Amazon to warehouse their product.
matwood 7y ago
Except that many of those businesses only exist because the reach and customer availability granted by Amazon.
Analemma_ 7y ago
Many business don't have a choice. A lot of the time, the choice is "sell on Amazon" or "don't sell". That's what monopsony is, and it's why Amazon needs to be broken up.
- cptaj 7y ago
  This is completely true. We used to do some development work for a client in florida. They sold all kinds of batteries on amazon. One day, a single dispute brought their whole business down. They had a whole warehouse of employees and they all got fucked because some temp employee somewhere in the world half-read a dispute while hungover from the night before and clicked a button. No appeals, no recourse. Your entire company shut down just like that.
  - awad 7y ago
    Curious - are you able to share more details?

mjevans 7y ago

I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.

mikehollinger 7y ago
So... blockchain for product quality? :-) Yeah, I'd like to be able to be able to look into / find who's a member of the bazaar and just fencing products, versus who's selling their own items directly. For example - I wouldn't buy speakers from some random reseller. I'd buy 'em from the original manufacturer, or the handful of "known" resellers that we all know like the big box stores.
- hn_throwaway_99 7y ago
  This was discussed in depth on HN a while back about why blockchain doesn't really work well for supply chain management: https://blog.smartdec.net/you-do-not-need-blockchain-eight-popular-use-cases-and-why-they-do-not-work-f2ecc6cc2129 https://blog.smartdec.net/you-do-not-need-blockchain-eight-p...
  - deleted 7y ago
    [deleted]
- englishmaninnyc 7y ago
  Is there any benefit for Amazon to implement that? :(
bizimsir 7y ago
Unfortunately Amazon won't have a real reason to do that :(
bdcravens 7y ago
Sounds like a great browser extension: identify, with a % of confidence, if the product is available from an Alibaba wholesaler.

mdorazio 7y ago

To bypass the pay/nag wall: https://outline.com/9mHK5d https://outline.com/9mHK5d Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Amazon is basically only going to purchase products for resale from large suppliers, and will shove the rest into the normal marketplace operations where they have to compete with everyone else on actually selling and shipping their products direct to consumers. Also of note is that this won't do anything to address the criticisms of rampant counterfeit and/or garbage quality products on the marketplace.

rinze 7y ago
I've always found this extension pretty useful against 'cookie-walls': https://github.com/Cookie-AutoDelete/Cookie-AutoDelete https://github.com/Cookie-AutoDelete/Cookie-AutoDelete. Also, general cookie hygiene.
Goronmon 7y ago
Also of note is that this won't do anything to address the criticisms of rampant counterfeit and/or garbage quality products on the marketplace. If anything it will only make it worse, as many of shrinking number of items sold by Amazon will now be tossed into the garbage pile along with everything else in the marketplace.
JohnFen 7y ago
> Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Yes, but I avoid the marketplace sellers. I've been burned too often with those -- if I'm going to roll the dice on that sort of thing, I'm better off with eBay.
- theturtletalks 7y ago
  What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.

baybal2 7y ago

Alibaba tried the same thing. It did not go well The result is well known. It quickly became apparent that very few people went online to buy "upscale brand stuff," and it overloaded their logistics big time

throwayEngineer 7y ago
Amazon is no longer the lowest cost and highest quality store. They have become just another store. Moves like this show they are losing their benefits more and more
- metalliqaz 7y ago
  "just another store" Hah. Their picking and shipping logistics are far and away superior to any other retailer. They offer free 1-day shipping to large swaths of the U.S. for Prime members.
partiallypro 7y ago
Have any more information on this? And do you think there is not more market elasticity in the US? It also seems this only effects wholesalers, not the traditional resalers.
- baybal2 7y ago
  You know that Alibaba have T-mall? It was their original take on "direct upscale retail brands" online mall. They were a late comes after JD had some early success, and followed by countless clones. T-mall was losing money big time, and none of bigger Taobao merchants wanted to move, moreover new Taobao brand stores were beginning to eat into T-mall. So, at around 2016 Alibaba decided to "give them a nudge" with racking up their fees, putting arbitrary limits on their accounts, and blatant "first dose free" offers to switch to T-mall. In the end, only few did, and one who did really did not manage to get full advantage of the platform. Most "upscale" brand suppliers valued control given by having their Taobao store too much to switch to being banal wholesalers. Lately, they reversed their stance on Taobao brand stores. But yeah, they definitely shot themselves in the foot with that move.

JohnFen 7y ago

> Amazon’s aim is to cut costs and focus wholesale purchasing on major brands like Procter & Gamble, Sony and Lego, the people said. That will ensure the company has adequate supplies of must-have merchandise and help it compete with the likes of Walmart, Target and Best Buy. That would cut out most of my purchases from Amazon. It makes no sense to buy stuff from Amazon that I can get from my local big-box retailer, after all.

throwayEngineer 7y ago
I've already stopped using Amazon. They are significantly more expensive than Walmart. Which is new, this was not true 4 years ago. They don't have the selection of stores like digikey. They lost their purpose completely. I only use Amazon for Email due to modern Email standards.
- beauzero 7y ago
  Anecdotal, but that is what my wife did last year. Walmart having the online order with local pickup serves us better and cheaper. It also removed the biggest Walmart barrier for us which is going physically into the store.
- hello_friendos 7y ago
  Also they've switched to the absolute worst, bottom-of-the-barrel delivery companies in many places. When Canada Post couldn't deliver my package I only had to walk 5 minutes to pick it up. Whoever their new delivery partner is. I'd have to drive to the edge of the city to pick up my package.
- H1Supreme 7y ago
  Same here. I think that people got used to using Amazon for everything (because of good pricing), and stopped shopping around as much. Their prices are basically suggested retail price at this point. Which, no one should ever pay.
craftyguy 7y ago
> That would cut out most of my purchases from Amazon. It makes no sense to buy stuff from Amazon that I can get from my local big-box retailer, after all. I bet you $5 that: 1) their decision was not made in a vacuum with no information And 2) you might not represent a significant portion of their customer base.

swalsh 7y ago

This is a big move, it transitions Amazon from a more traditional retailer, to something more akin to a dropshipper. I'm reminded of Wayfairs Castlegate business. The manufacturer now takes on the responsibility of forecasting, they assume the risk of holding inventory, but Amazon still controls the customer impact things like boxing and shipping.... and they get to do it at the manufacturers cost. It's quite brilliant actually.

trufflepig 7y ago

would this just push the minor-large brands (aukey, anker, etc) into marketplace? Or are these minor-large brands already in the marketplace?

notatoad 7y ago
a quick spot check of a bunch of anker products shows they're already a marketplace seller
- erik_seaberg 7y ago
  Do they at least enforce that Anker products actually came from Anker and not some scammer who's happy to burn my apartment down?
  - kevin_b_er 7y ago
    No. It should hopefully be well known by now that Amazon "commingles" all inventory of a given item. You can never be sure if you'll get a well-made counterfeit on the "marketplace". Even if you PICK WHICH SELLER you get whatever's in the bin that the overworked amazon warehouse sub-sub-sub-contracted employee quickly plucks.
    - trufflepig 7y ago
      is true for big ticket items like apple products and laptops
    - secabeen 7y ago
      Sellers can choose to not co-mingle, but then they have to put a separate UPC code on the item.
      - jessaustin 7y ago
        Having done that, can they be sure that another seller won't try to horn in on the new UPC code?

certainstartup 7y ago

This , indeed, has been coming for a long time.

Goronmon 7y ago

So Amazon is going harder into the marketplace side of things, turning Amazon from an online retailer into another version of eBay? This doesn't sound like a positive move for me, but I guess that doesn't necessarily means its bad for Amazon's profitability if other people don't mind rolling the dice on random products by relatively unknown sellers and manufacturers.

corndoge 7y ago
Doesn't this article say the exact opposite of what you just said?
- Goronmon 7y ago
  No? It says Amazon is cutting back on the "Sold by Amazon.com" items and pushing those items onto the marketplace, and only sticking to directly selling items from large manufacturers.
- cannonedhamster 7y ago
  No. Amazon is pushing smaller sellers into their marketplace platform which is ride with counterfeits, thieves, and garbage products with fake reviews purchased on Facebook. My wife and I stopped going to Amazon because product quality started getting so bad. It's to the point that I trust Alibaba or eBay over Amazon, which is a shame. I suspect there's a lot of less vocal people in the same boat who've started exploring other merchants.
  - delfinom 7y ago
    Yep, I have been alot of stuff from Aliexpress lately because you can find sellers that are quite reputable and actually support their shit somewhat. Amazon? You find people reselling shit from Alibaba and not caring a thing about it.
whoisjuan 7y ago
The article doesn't say that at all. It says that they are going to stop sourcing from small wholesalers and buy directly from consumer brands, essentially bypassing other parties and enabling a factory to shipping center channel. If anything is syaing the complete opposite of what you stated in your comment.

mirianbert 7y ago

Antitrust lawsuit coming up in 3, 2, ...

kellrom 7y ago

I partly blame GS1 for not moving fast enough to create an open supply chain network (not just standards).

_red 7y ago

No one ever talks about eBay anymore....but when are we going to collectively realize that they are the best of the "big tech" companies? They've stayed remarkable true to their mission, haven't entered politics (ironic given previous CEO), and continued to offer a good service. Since the commingling of inventory is now so prevalent at Amazon, I find myself using eBay more and more.

SmellyGeekBoy 7y ago
I've had nothing but good experiences with ebay over the past few years, and I'm a very heavy user (buying and selling). I've been a member since 2002, FWIW.
- JohnFen 7y ago
  Me too. eBay has consistently handled disputes quickly and without hassles. Amazon has never managed that, even when they're the ones fulfilling the order.
walterbell 7y ago
Even NewEgg sells on eBay, and they have their own website! There is something to be said for the stability of marketplace rules and ecosystem. No rules are perfect, but if the rules are stable, people eventually learn how to interpret signals and assess risk. If the rules are constantly changing, all that hard-earned customer knowledge is discarded at random intervals, because the platform vendor has silently forked/rebooted the economy into a parallel universe. Now you have sellers in the new universe and buyers in the old universe. In a sane regulatory environment, platforms would be forced to put a version number on both the UX and ToS, so people would at least know the universe/rules have changed. As with other mandatory reporting, metrics on public notification would reduce "universe churn" and make it part of the marketing/competitive landscape.
par 7y ago
agreed, since Amazon product quality has become more suspect, I've found myself going to eBay for lots of various types of goods. I'm usually more pleased with my eBay experience than my Amazon experience, though I do use Amazon more frequently.

munk-a 7y ago

I really hope this triggers some long needed anti-trust action against amazon - controlling the market place and using that control to execute actions like this is exactly what those laws are there for, this is the first step in a consolidation to force suppliers into less profitable agreements and individual bargaining.

magduf 7y ago
What are you smoking? Do you honestly think Trump's justice department is going to enforce any such laws?
- CamperBob2 7y ago
  It wouldn't surprise me. Bezos is probably at the top of Trump's "enemies list," and I assume (or, rather, hope) that the converse is also true. I don't think it's excessively political to point out that Trump is exactly the sort of President who would use his Justice Department as an instrument to settle personal beefs.

FrancAn7 7y ago

It might be better if it is clear that they are not an open marketplace anymore, ever since amazon basics

chiefalchemist 7y ago

IDK, sounds (mostly?) like a CYA move. That is, the Counterfeit Apocalypse was coming, but this helps them dodge that. I would think similar for all the bogus reviews and rating. I can hear it now, "Oh. Those? Those aren't __our__ products. We only list them." I hate to sound like a cynic, but me thinks Amazon's legal team cooked this up, or at least had a heavy hand in it.

secabeen 7y ago
I wonder if they'll give all these small sellers the co-mingle option. If they switch to a model where the original vendor pays the extra to not co-mingle, it might indeed address the counterfeit copy. (Buy at MSRP from the original vendor, and be assured that it's genuine, or buy a discount version from another vendor, and take what you get.)

higherpayusa 7y ago

Another ramification... many suppliers/vendors will now be "more directly" competing with their own customers within the amazon marketplace. Whereas before a vendor could sell a large quantity to Amazon and then smaller quantities (at higher prices) to middlemen and let the middleman fight it out, now they'll be a huge incentive to price in such a way that middlemen get cut out. If this sounds good (hey, no middlemen, better for us) consider this typical situation (I know it well)... Retail company buys toys for sale in store, but uses marketplace for overstock, offsets, and to keep products on shelves fresh... Not a huge profit center, but an important part of "flow" - now the viability of that shrinks as suppliers squeeze prices upwards. And the cycle continues... retailers have to raise prices to make up for what little "volume" sales they do... people stop shopping retail because it is "too expensive" and down go more independent stores.