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So the manufacturer was just re-selling stuff from Amazon?

• CamelCaseName 7y ago
  No, the manufacturer likely uses Amazon as their fulfillment network as you often get better storage/shipping rates this way. These manufacturer fulfilled network (MFN) orders cost the manufacturer a premium in shipping fees over FBA orders (orders sold/fulfilled through Amazon), but don't carry the referral fee (8-40%). Given this, it is almost always cheaper for the manufacturer to sell off Amazon and ship MFN... if you ignore customer acquisition cost.
  • afjl 7y ago
    Why is there such a large range for referral fees? And I wonder how the referral fee itself is calculated.
    • CamelCaseName 7y ago
      I apologize, the referral fee range I previously stated is a little misleading. Referral fees for the vast majority of items is 8% to 15%, which in and of itself is a massive range. I believe this is mostly due to the typical margin on each item. Perhaps the typical cost of customer acquisition also plays a role. The minimum is 6% for personal computers, which historically have super slim margins anyhow, and 45% for Amazon Device accessories, probably because Amazon wants to maintain a major advantage over third party accessories (and possibly because they dominate the market for Amazon device accessories, so they're able to charge a major premium)