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Wrong. The retail store makes its margin based on the spread between wholesale and retail price. They mark it up. Typically, 50%. Entitlements sit on top of t

Wrong. The retail store makes its margin based on the spread between wholesale and retail price. They mark it up. Typically, 50%. Entitlements sit on top of that. They are usually broken out between logistics, damage, marketing support, liability, referral, platform, etc..They average around 15%, but it depends on category. Amazon.com calls it a “referral fee” for marketplace sellers. No physical store there. This is strictly a fee you pay to access their customers. Same as Apple. It’s the fee you pay to access their customer base, with credit card and billing info, and have them handle the transaction and associated liability. It’s pretty clear you have zero understanding of retail business logistics.

AnthonyMouse 7y ago
> Entitlements sit on top of that. They are usually broken out between logistics, damage, marketing support, liability, referral, platform, etc. "Entitlements" are just a component of overall margins. Breaking them out separately doesn't win you anything because the store brand still needs to pay its pro rata share of the cost to cover those things. > Amazon.com calls it a “referral fee” for marketplace sellers. No physical store there. These is strictly a fee you pay to access their customers. Yet notice that their fees are typically something like 13% rather than 30%, and they're still dealing in physical goods and then have to contend with the sellers who send an empty box rather than a product etc.
- themagician 7y ago
  No, they aren’t and no they don’t. Again you really don’t know what you’re talking about. Save yourself the embarrassment and delete your comments. The Apple fee also drops to 15% after a year. It’s 30% for the first year because of the amount of fraud and chargebacks. Same is true for other high-risk categories everywhere else, like jewelry and gift cards.
  - deleted 7y ago
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  - AnthonyMouse 7y ago
    > No, they aren’t and no they don’t. "No" is not an argument. > The Apple fee also drops to 15% after a year. It’s 30% for the first year because of the amount of fraud and chargebacks You're referring to subscriptions, but at that point it's still outrageously high precisely because they no longer have to worry about that stuff and it's only a matter of transaction processing for which a 15% fee is still completely unreasonable.
    - themagician 7y ago
      There's no argument. You are just wrong. And 15% isn't that high. 15% is what Amazon charges for selling physical books on Amazon.com. That doesn't include shipping, handling, or returns. That's literally just the "transaction processing" fee as you call it and the ability to exist on their store.
      - AnthonyMouse 7y ago
        > There's no argument. You are just wrong. "You are just wrong" is not an argument. > And 15% isn't that high. 15% is what Amazon charges for selling physical books on Amazon.com. Physical books are not digital subscriptions. 15% is very high for long-term subscriptions because, as you point out, they don't have a high chargeback rate etc. By comparison, for example, Stripe charges 3.3% to process recurring subscriptions.
        themagician 7y ago
        Do you have an actual point you are trying to articulate, or is it just trolling? • Spotify pays 15% after a year, not 30% forever. • 15% isn't unreasonable at all. Many industries, from physical goods to digital subscriptions, work on a similar fee schedule. • For example, you pay 15% forever for selling physical books, no matter how few chargebacks you get. • The rates for digital goods are often higher. For example, Amazon takes 30-65% for Kindle sales. • Spotify can use Stripe if they want (and they do), at the lower rate. First you thought the rate was higher than it was. Then you thought that rate was unreasonable when compared to physical goods and it wasn't. What are you actually trying to say? 15% is too much… because it's possible to get that service somewhere cheaper, which they do, and that's how most customers pay?
gamblor956 7y ago
Wrong. Most wholesalers don't get charged entitlements by the stores. Damaged items are not entitlements, they're straight contractual issues and especially with foodstuffs, wholesale contracts may specify that up to a % of goods may arrive damaged and in unsaleable condition. Marketing support is negotiated by brands seeking premium shelf space, or end-of-aisle placements or in-store marketing. Liability is not an entitlement. Ever. It's something you work out between legal departments if you get sued under product liability laws. My sources? My clients include about a dozen clothing retailers, 20ish restaurant chains, 3 big box stores, and a number of smaller grocery chains. It's pretty clear you have zero understanding of retail business logistics and you should consider revising your comments to reflect that. EDIT: After reading your other comments, it's pretty clear that you think that a manufacturer, i.e., Alpha Cola, sells to a Walmart shopper and pays Walmart for this opportunity. That's not how retail works. Walmart pays Alpha for a bunch of soda, and as part of this Alpha may negotiate an offset (what you've been calling an entitlement) for marketing support like in-store displays and premium shelf space alongside Code. BUT BUT BUT in many situations, this is actually reversed: for example, for beer and convenience stores, the store agrees to give the beer premium space and in-store displays and may even agree to cover the costs. And in my example above, Coke usually wouldn't pay a store anything for marketing support--instead, the store would agree to provide unpaid marketing support to Coke for the privilege of carrying Coke's products. The store then uses Coke as a loss-leader to get people into the store.
- themagician 7y ago
  Oh man, the cringe. Most do. You can’t sell to Amazon or Walmart retail without entitlements. They are literally called entitlements. Try to establish a relationship with a big box store without agreeing to entitlements—it’s damn near impossible. Maybe massive brands like Nike can do it, I don’t know. Damage is typically an entitlement. It’s usually called “DA” or “Damage Allocation”. It’s around 2-6%, depending on category. It’s usually deducted from each payment, or sometimes aggregated and deducted separately. Many companies will take a marketing entitlement. Amazon Retail does this at 10%. It is negotiable, but depends on category. Most but e-commerce retailers now have an entitlement like this. Marketing support for product/campaign specific needs is separate. “Liability” will sometimes take the form of an entitlement for high risk goods. For example, gift cards, fragile goods, and jewelry. It’s never called liability explicitly, but will have a variety of names depending on industry or category. I don’t doubt your clients, but I’m guessing you work at a level that would not expose you to this stuff. Ask your clients about their entitlements, if they are willing to share that information with you. It might be eye opening for you.

AnthonyMouse 7y ago

> Entitlements sit on top of that. They are usually broken out between logistics, damage, marketing support, liability, referral, platform, etc. "Entitlements" are just a component of overall margins. Breaking them out separately doesn't win you anything because the store brand still needs to pay its pro rata share of the cost to cover those things. > Amazon.com calls it a “referral fee” for marketplace sellers. No physical store there. These is strictly a fee you pay to access their customers. Yet notice that their fees are typically something like 13% rather than 30%, and they're still dealing in physical goods and then have to contend with the sellers who send an empty box rather than a product etc.

themagician 7y ago
No, they aren’t and no they don’t. Again you really don’t know what you’re talking about. Save yourself the embarrassment and delete your comments. The Apple fee also drops to 15% after a year. It’s 30% for the first year because of the amount of fraud and chargebacks. Same is true for other high-risk categories everywhere else, like jewelry and gift cards.
- deleted 7y ago
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- AnthonyMouse 7y ago
  > No, they aren’t and no they don’t. "No" is not an argument. > The Apple fee also drops to 15% after a year. It’s 30% for the first year because of the amount of fraud and chargebacks You're referring to subscriptions, but at that point it's still outrageously high precisely because they no longer have to worry about that stuff and it's only a matter of transaction processing for which a 15% fee is still completely unreasonable.
  - themagician 7y ago
    There's no argument. You are just wrong. And 15% isn't that high. 15% is what Amazon charges for selling physical books on Amazon.com. That doesn't include shipping, handling, or returns. That's literally just the "transaction processing" fee as you call it and the ability to exist on their store.
    - AnthonyMouse 7y ago
      > There's no argument. You are just wrong. "You are just wrong" is not an argument. > And 15% isn't that high. 15% is what Amazon charges for selling physical books on Amazon.com. Physical books are not digital subscriptions. 15% is very high for long-term subscriptions because, as you point out, they don't have a high chargeback rate etc. By comparison, for example, Stripe charges 3.3% to process recurring subscriptions.
      - themagician 7y ago
        Do you have an actual point you are trying to articulate, or is it just trolling? • Spotify pays 15% after a year, not 30% forever. • 15% isn't unreasonable at all. Many industries, from physical goods to digital subscriptions, work on a similar fee schedule. • For example, you pay 15% forever for selling physical books, no matter how few chargebacks you get. • The rates for digital goods are often higher. For example, Amazon takes 30-65% for Kindle sales. • Spotify can use Stripe if they want (and they do), at the lower rate. First you thought the rate was higher than it was. Then you thought that rate was unreasonable when compared to physical goods and it wasn't. What are you actually trying to say? 15% is too much… because it's possible to get that service somewhere cheaper, which they do, and that's how most customers pay?

gamblor956 7y ago

Wrong. Most wholesalers don't get charged entitlements by the stores. Damaged items are not entitlements, they're straight contractual issues and especially with foodstuffs, wholesale contracts may specify that up to a % of goods may arrive damaged and in unsaleable condition. Marketing support is negotiated by brands seeking premium shelf space, or end-of-aisle placements or in-store marketing. Liability is not an entitlement. Ever. It's something you work out between legal departments if you get sued under product liability laws. My sources? My clients include about a dozen clothing retailers, 20ish restaurant chains, 3 big box stores, and a number of smaller grocery chains. It's pretty clear you have zero understanding of retail business logistics and you should consider revising your comments to reflect that. EDIT: After reading your other comments, it's pretty clear that you think that a manufacturer, i.e., Alpha Cola, sells to a Walmart shopper and pays Walmart for this opportunity. That's not how retail works. Walmart pays Alpha for a bunch of soda, and as part of this Alpha may negotiate an offset (what you've been calling an entitlement) for marketing support like in-store displays and premium shelf space alongside Code. BUT BUT BUT in many situations, this is actually reversed: for example, for beer and convenience stores, the store agrees to give the beer premium space and in-store displays and may even agree to cover the costs. And in my example above, Coke usually wouldn't pay a store anything for marketing support--instead, the store would agree to provide unpaid marketing support to Coke for the privilege of carrying Coke's products. The store then uses Coke as a loss-leader to get people into the store.

themagician 7y ago
Oh man, the cringe. Most do. You can’t sell to Amazon or Walmart retail without entitlements. They are literally called entitlements. Try to establish a relationship with a big box store without agreeing to entitlements—it’s damn near impossible. Maybe massive brands like Nike can do it, I don’t know. Damage is typically an entitlement. It’s usually called “DA” or “Damage Allocation”. It’s around 2-6%, depending on category. It’s usually deducted from each payment, or sometimes aggregated and deducted separately. Many companies will take a marketing entitlement. Amazon Retail does this at 10%. It is negotiable, but depends on category. Most but e-commerce retailers now have an entitlement like this. Marketing support for product/campaign specific needs is separate. “Liability” will sometimes take the form of an entitlement for high risk goods. For example, gift cards, fragile goods, and jewelry. It’s never called liability explicitly, but will have a variety of names depending on industry or category. I don’t doubt your clients, but I’m guessing you work at a level that would not expose you to this stuff. Ask your clients about their entitlements, if they are willing to share that information with you. It might be eye opening for you.