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Why aren't the manufacturers selling directly through Amazon?

• themagician 7y ago
  I think the main reason is that Amazon won’t buy their items at a reasonable price due to what I can only call “price corruption”. Basically, third party sellers find a way to get a wholesale discount and then sell it through Amazon for a bit more. So the price on Amazon is artificially low. Say you have a $10 item. Maybe your wholesale price is $5. The third party seller puts it on Amazon for $7. Amazon sees this. Now Amazon only agrees to pay you $4, because to them the $10 price is irrelevant. $4 is too low, so you don’t accept and Amazon doesn’t buy from you. Now, you can sell yourself on Amazon, but then existing retail partners get mad because suddenly you are selling the item for $5 to compete with the arbitragers. I’ve even found some relatively large retailers selling on Amazon under dummy companies to hide their name, but still be able to profit off their high wholesale discount. Things are changing. But it can be a slow and painful process for small manufacturers.
• jjeaff 7y ago
  For many manufacturers, a great deal of their sales come from distributors (the great majority of retail is still brick and mortar). They can't compete with their customers. Many manufacturers have started selling direct as well, but they usually sell at a bit of a premium to avoid undercutting their own customers. It's just bad form to do that. And large retailers like Walmart will usually stipulate that you can't sell it cheaper direct.