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Amazon also has to purchase whitelabeled products and then sell them as their own brand, incurring the same kind of inventory risk.
by scribu 6y ago
Amazon also has to purchase whitelabeled products and then sell them as their own brand, incurring the same kind of inventory risk.
- feyman_r 6y agoI am guessing there is information disparity here. Amazon knows the demand-supply curve really well by the time they get into the market - in fact, not just for Brand A of usb-cable, but for Brands A-to-Z. None of those brands know how their competitors are doing and if there's a better kind out there than what they make. Amazon knows it. Risk to Amazon is no longer 'is this product category good, or whether cloth or plastic sheath sells best on USB cables'. Smaller brands already survived and proved it for them. If Amazon came out with absolutely new products (that are not Alex, Kindle etc, upselling, cross-selling themselves) to test the market out, I'd say risk would be same.