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You've answered a question I've been asking myself for the past couple of years: Why is Amazon trying to become AliExpress? AliExpress already does a good job o

You've answered a question I've been asking myself for the past couple of years: Why is Amazon trying to become AliExpress? AliExpress already does a good job of being AliExpress. The answer is that Amazon has quietly pivoted: Their new business model is 1. Buy stuff from AliExpress. 2. Mark it up 5x-10x. 3. Profit! Amazon probably hopes their customers don't notice they can get the same stuff from AliExpress much cheaper. Which they won't because only about 1% of Amazon's customers have even heard of AliExpress. Even with speedy free delivery, Amazon's profit margin by marking up AliExpress stuff is probably quite a bit higher than it was for the old Amazon.

fmajid 4y ago
It’s AliExpress with 2 day shipping for people with poor impulse control. The “free shipping” that costs 900%…
- mindslight 4y ago
  I've got good impulse control and planning. Still, I needed some TNC connectors for a surveying project and didn't want to wait the month for Aliexpress/eBayDirect to show up, so I ordered them off Amazon which had the best compromise of price vs shipping time. Of course I did a visual quality check when they showed up, as required for all direct Chineseum. It's not surprising this niche has developed. What's surprising is that Amazon seems dead set on undermining their business to support it. It's also surprising that people write these amazed posts like they've just discovered this problem, when it has been going on for a decade. I read a HN comment a while back that framed the topic of declining quality plus free returns as companies outsourcing their QC to the customers and that really stuck with me. This is really the natural progression of wanton consumerism - so much stuff is sold and never actually used that it's profitable to only worry about the case where the buyer actually uses it and finds it lacking.
  - orangepurple 4y ago
    Amazon can launch a new brand to distance themselves from the current form once they have firmly established themselves as a local cache of Aliexpress wares with fast shipping. It will be like an upmarket shopping mall located right next to a giant bazaar.
  - fmajid 4y ago
    It's also due to mismatched expectations. In the west, a supplier has teething troubles, and then masters the process so quality improves over time. In China, the phenomenon of "quality fade" in a culture of "chabuduo" ("close enough") means over time the supplier will make unauthorized substitutions of inferior materials to pad their profit margins, and quality decreases over time. The only solution is to implement draconian quality control as Apple does, or not outsource and set up your own local affiliates as many Japanese companies do. https://knowledge.wharton.upenn.edu/article/quality-fade-chinas-great-business-challenge/ https://knowledge.wharton.upenn.edu/article/quality-fade-chi...
lotsofpulp 4y ago
> Why is Amazon trying to become AliExpress? Because all the profit is in being a platform. Otherwise, their retail operations would be looking at the sub 5% profit margins of every other retail business in the US.
jtolmar 4y ago
> 2. Mark it up 5x-10x. From the limited searching I did when I first noticed this, it seems to actually be a more or less flat $10 markup, regardless of whether that works out to 10x or 10%. Maybe some sort of fixed cost is involved?
- notsapiensatall 4y ago
  It's basically the cost to list, store, sell, and ship a small item on Amazon, plus $1-2. You pay the markup to get the item quickly, and for easy returns.
philsnow 4y ago
That's precisely Wish's business model, as far as I can tell.
Fnoord 4y ago
Its not Amazon solely which does this (with Amazon Basics) its mostly dropshippers.

fmajid 4y ago

It’s AliExpress with 2 day shipping for people with poor impulse control. The “free shipping” that costs 900%…

mindslight 4y ago
I've got good impulse control and planning. Still, I needed some TNC connectors for a surveying project and didn't want to wait the month for Aliexpress/eBayDirect to show up, so I ordered them off Amazon which had the best compromise of price vs shipping time. Of course I did a visual quality check when they showed up, as required for all direct Chineseum. It's not surprising this niche has developed. What's surprising is that Amazon seems dead set on undermining their business to support it. It's also surprising that people write these amazed posts like they've just discovered this problem, when it has been going on for a decade. I read a HN comment a while back that framed the topic of declining quality plus free returns as companies outsourcing their QC to the customers and that really stuck with me. This is really the natural progression of wanton consumerism - so much stuff is sold and never actually used that it's profitable to only worry about the case where the buyer actually uses it and finds it lacking.
- orangepurple 4y ago
  Amazon can launch a new brand to distance themselves from the current form once they have firmly established themselves as a local cache of Aliexpress wares with fast shipping. It will be like an upmarket shopping mall located right next to a giant bazaar.
- fmajid 4y ago
  It's also due to mismatched expectations. In the west, a supplier has teething troubles, and then masters the process so quality improves over time. In China, the phenomenon of "quality fade" in a culture of "chabuduo" ("close enough") means over time the supplier will make unauthorized substitutions of inferior materials to pad their profit margins, and quality decreases over time. The only solution is to implement draconian quality control as Apple does, or not outsource and set up your own local affiliates as many Japanese companies do. https://knowledge.wharton.upenn.edu/article/quality-fade-chinas-great-business-challenge/ https://knowledge.wharton.upenn.edu/article/quality-fade-chi...

lotsofpulp 4y ago

> Why is Amazon trying to become AliExpress? Because all the profit is in being a platform. Otherwise, their retail operations would be looking at the sub 5% profit margins of every other retail business in the US.

jtolmar 4y ago

> 2. Mark it up 5x-10x. From the limited searching I did when I first noticed this, it seems to actually be a more or less flat $10 markup, regardless of whether that works out to 10x or 10%. Maybe some sort of fixed cost is involved?

notsapiensatall 4y ago
It's basically the cost to list, store, sell, and ship a small item on Amazon, plus $1-2. You pay the markup to get the item quickly, and for easy returns.

philsnow 4y ago

That's precisely Wish's business model, as far as I can tell.

Fnoord 4y ago

Its not Amazon solely which does this (with Amazon Basics) its mostly dropshippers.