3 ms·

The article says Sam's Club "rewards its members by selling a deeply discounted 500-pack for about $15". If Sam's Club decides to make Dum Dums a loss leader, e

The article says Sam's Club "rewards its members by selling a deeply discounted 500-pack for about $15". If Sam's Club decides to make Dum Dums a loss leader, even if they're paying Spangler the same price as other retailers, you're saying its Spangler's problem if they don't additionally jack the price for Sam's Club?

Ekaros 4y ago
If Sam's Club pays same as other retailers, it is Sam's Club losing the money. So clearly Spangler is in that case losing no money, or actually making more. And if they are giving a discount to Sam's Club, they can solve problem by ending that discount.
- an1sotropy 4y ago
  Sorry, I should have thought and explained more. I agree that it's not Spangler's problem that Sam's Club makes Dum Dums into a loss leader; you're right that Spangler is getting paid for whatever leaves their factory regardless of what happens downstream. The problem is the Amazon drop-ship hustle is generating revenue, from the flow of Dum Dums, which is not reaching Spangler, but arguably should. When a drop-shipper buys from Sam's Club, paying the artificially very low price of that loss leader, but then turns around and sells on Amazon at a tiny bit under Spangler's price on Amazon (the article says $25 vs $26), then people will end up buying on Amazon from the drop-shipper instead of from Spangler. Spangler points to this and says: look, there's demand on Amazon for our product, and we should be getting the revenue from meeting that demand, but instead some of that demand is being met by drop-shippers making huge profits. I think you and I may be disagreeing on whether the drop-shippers gain is actually Spangler's loss. I think Spangler has a legit complaint, and that's probably why Amazon says the practice is against the rules (while sucking at enforcement).

3 ms·

The article says Sam's Club "rewards its members by selling a deeply discounted 500-pack for about $15". If Sam's Club decides to make Dum Dums a loss leader, e

by an1sotropy 4y ago

Ekaros 4y ago
If Sam's Club pays same as other retailers, it is Sam's Club losing the money. So clearly Spangler is in that case losing no money, or actually making more. And if they are giving a discount to Sam's Club, they can solve problem by ending that discount.
- an1sotropy 4y ago
  Sorry, I should have thought and explained more. I agree that it's not Spangler's problem that Sam's Club makes Dum Dums into a loss leader; you're right that Spangler is getting paid for whatever leaves their factory regardless of what happens downstream. The problem is the Amazon drop-ship hustle is generating revenue, from the flow of Dum Dums, which is not reaching Spangler, but arguably should. When a drop-shipper buys from Sam's Club, paying the artificially very low price of that loss leader, but then turns around and sells on Amazon at a tiny bit under Spangler's price on Amazon (the article says $25 vs $26), then people will end up buying on Amazon from the drop-shipper instead of from Spangler. Spangler points to this and says: look, there's demand on Amazon for our product, and we should be getting the revenue from meeting that demand, but instead some of that demand is being met by drop-shippers making huge profits. I think you and I may be disagreeing on whether the drop-shippers gain is actually Spangler's loss. I think Spangler has a legit complaint, and that's probably why Amazon says the practice is against the rules (while sucking at enforcement).