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Have you subtracted all the losses on the products that didn't sell? When I sold on Amazon, every so often I'd be able to 10X my money on a product, but it was
by ikeboy 7y ago
Have you subtracted all the losses on the products that didn't sell?
When I sold on Amazon, every so often I'd be able to 10X my money on a product, but it was rare and balanced out by the many more times that I would lose money on a product or have to write off completely because it didn't sell.
- geofft 7y agoSo, from a "does the market optimize for good outcomes" perspective, that seems even worse - goods (that are already produced) get hoarded and sometimes they don't even sell. This seems like it's not accomplishing the goals very well.
- ikeboy 7y agoTo be specific, the market+price gouging laws+Amazon blocking listings because of those laws is suboptimal. If Amazon hadn't blocked the listings, and more to the point, if Amazon had been known to act reasonably in prior instances, then there'd be more investment and people would accept lower returns. I know firsthand people told me they weren't buying these stuff wholesale to sell on Amazon because they expected Amazon to cause issues, and they were right. I think if there'd be no price gouging laws and everyone expected to be allowed to sell on Amazon, people would end up pricing lower and there'd be more supply and competition. There's also uncertainty because when Amazon was banning for price gouging they never made it clear what price level counted as gouging. Wholesale prices shot up, and it was unclear whether selling at a reasonable margin, but based on a higher cost, would be considered gouging.
- generalpass 7y agoMy prediction is that people will create separate seller accounts that list emergency items at sky-high prices when there is no emergency. Thus, in an emergency they don't need to "increase" their prices.
- ikeboy 7y agoAmazon isn't comparing the regular price of the seller, but on the product level. Also, Amazon this week banned all offers, not just ones that were deemed to be price gouging. eBay did the same already more than a week ago.
- generalpass 7y agoAnd what about Shopify?
- ikeboy 7y agoI haven't seen them restrict anything yet. They're not a marketplace, just hosting websites and taking payments, so they've typically been far more hands off than Amazon/eBay.
- generalpass 7y agoAny predictions on Google Adsense revenue this quarter?