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If you think that a supermarket buys products wholesale and then puts them on shelves for customers to buy, you don't understand how supermarkets work.
by klodolph 5y ago
If you think that a supermarket buys products wholesale and then puts them on shelves for customers to buy, you don't understand how supermarkets work.
- rootusrootus 5y ago> you don't understand how supermarkets work. Agreed ;-). That's why I hang out on HN, hoping to gain some insight and knowledge. The customer->FBA->merchant relationship is much clearer than in any supermarket I've been in. Maybe I'm really buying from a third party and the supermarket is just acting as the fulfillment center and payment processor, but it is well hidden. I'd love to know more about how the business end works.
- elliekelly 5y agoGrocery stores are retailers in the traditional sense rather than a consignment shop or marketplace like Amazon. I think the person you’re replying to is alluding to “slotting fees” for new products and perhaps the more controversial “pay to stay” fees which are far more secretive and, from my understanding, are more of a grey area. Technically I believe the “fee” is considered a type of advertising expense: https://home.kpmg/content/dam/kpmg/pdf/2015/04/revenue-leaflet-food-drink.pdf https://home.kpmg/content/dam/kpmg/pdf/2015/04/revenue-leafl...
- wyldfire 5y agoThose fees might be an interesting factor but who bears the inventory carrying cost is what I suspect GP means. For FBA, it's not Amazon. It wouldn't surprise me if big vendors like coke/Pepsi who stock the shelves also own the inventory.
- shkkmo 5y agoI'd love to read a good article talking about how inventory acquisition and management works at divergent super market chains... I suspect a lot of the interesting details are considered trade secrets though.