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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
by 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).