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This is exactly it. And the increase in total fees is a transfer of marketing budgets from other platforms like Google Ads and Facebook ads to Amazon Ads. If

by moltar 4y ago

This is exactly it. And the increase in total fees is a transfer of marketing budgets from other platforms like Google Ads and Facebook ads to Amazon Ads. If anyone thinks 50% cut is a big margin they probably haven’t operated an e-commerce store the traditional way.

belval 4y ago
Apple, Steam, Google et al. charge 30% on *digital* goods. With Amazon you get <50% for physical goods. If anything that's impressive.
- shanebellone 4y ago
  "If anything that's impressive." I'm conflicted about this statement. On one hand, it's almost passive revenue for the seller. On the other hand, Amazon offloads the risk of carrying inventory and takes half the revenue. I'd argue that it's impressive with one caveat: the "partnership" heavily favors the house.
  - deleted 4y ago
    [deleted]
  - Closi 4y ago
    Important to note that plenty of other companies will carry the inventory and ship goods out for you (Amazon did not invent the concept of third party logistics) - however if you go to a third party warehouse it is difficult to get certified as 'Prime'. (Seller Fulfilled Prime is a thing, but in reality is currently closed for sign-up and is really only for the large sellers)
- votepaunchy 4y ago
  Apple, Google, maybe others charge 15% on up to $1 million or the first $1 million in digital sales. Or less when negotiated. Does Amazon offer reduced rates to small businesses or low volume sellers?
- nobu-mori 4y ago
  Digital goods have very low marginal unit costs compared to physical goods.
  - shanebellone 4y ago
    Edit: I was wrong :)
    - deleted 4y ago
      [deleted]
    - Closi 4y ago
      You are misunderstanding the concept of marginal unit costs if you disagree on that basis. AAA software is wildly expensive, but each incremental copy sold is not wildly expensive. With a tea kettle, each incremental copy still costs you metal, heating elements and plugs, so the unit margins are smaller.
      - shanebellone 4y ago
        Oh! That I failed to recall. You are absolutely correct.
- JohnFen 4y ago
  It tells me that the fee on digital goods is insanely high.
StreamBright 4y ago
It is not that I think 50% is a lot but it is the same 50% when amazon is selling fakes. If amazon would be able to sell items that are original and the money would go to the right person maybe 50% is ok. This is not the case by a long shot.
- omgomgomgomg 4y ago
  As a former Amazonian who has worked on vat, compliance, taxes, product compliance etc, I can tell you, really from an unbiased perspective that Amazon is doing everything they can to terminate the bad actors. This includes the fake reviews etc. Lets say you have a charger for iphones, you cant have text for the ASIN saying for iphone, it will get delisted immediatelly, you have to say "compatible with iphone" and such. The main weakness is how products are created, the catalogue principle, this allows some to fly under the radar for a bit sometimes. And Amazon will not immediatelly shut down a whole sellers account, but rather target ASINs one by one. The best way for a buyer to deal with this is to leave a sellers(not product) review and ask for a refund, you will always get the refund, Amazon always pushes liability to the sellers in order to protect the brand image and to not be exploitable. Once theres enough of reviews and refunds, the sellers will get shut down and the funds will be held on hold, just like a banl does for credit card processors. The cost to do business on amazon with fakes repeatedly(need new companies every time etc) is quite high, if not prohibitivelly high. Do not suck it up, do the 2 things mentioned to keep the place tidy.
  - runnerup 4y ago
    Amazon is doing nothing about the total product switches where hard drives have reviews about laundry detergent. They’re clearly not doing basic easy prevention. Customers try really hard to report stuff like this and Amazon actively thwarts them. It’s insane to say that Amazon is trying really hard to prevent fraud. Maybe some types of fraud, sure. But so much of the customers-facing fraud is actively supported by Amazon, like Amazon puts actual active effort into preventing customers from reporting it!
    - omgomgomgomg 4y ago

by moltar 4y ago

belval 4y ago

Apple, Steam, Google et al. charge 30% on *digital* goods. With Amazon you get <50% for physical goods. If anything that's impressive.

shanebellone 4y ago
"If anything that's impressive." I'm conflicted about this statement. On one hand, it's almost passive revenue for the seller. On the other hand, Amazon offloads the risk of carrying inventory and takes half the revenue. I'd argue that it's impressive with one caveat: the "partnership" heavily favors the house.
- deleted 4y ago
  [deleted]
- Closi 4y ago
  Important to note that plenty of other companies will carry the inventory and ship goods out for you (Amazon did not invent the concept of third party logistics) - however if you go to a third party warehouse it is difficult to get certified as 'Prime'. (Seller Fulfilled Prime is a thing, but in reality is currently closed for sign-up and is really only for the large sellers)
votepaunchy 4y ago
Apple, Google, maybe others charge 15% on up to $1 million or the first $1 million in digital sales. Or less when negotiated. Does Amazon offer reduced rates to small businesses or low volume sellers?
nobu-mori 4y ago
Digital goods have very low marginal unit costs compared to physical goods.
- shanebellone 4y ago
  Edit: I was wrong :)
  - deleted 4y ago
    [deleted]
  - Closi 4y ago
    You are misunderstanding the concept of marginal unit costs if you disagree on that basis. AAA software is wildly expensive, but each incremental copy sold is not wildly expensive. With a tea kettle, each incremental copy still costs you metal, heating elements and plugs, so the unit margins are smaller.
    - shanebellone 4y ago
      Oh! That I failed to recall. You are absolutely correct.
JohnFen 4y ago
It tells me that the fee on digital goods is insanely high.

StreamBright 4y ago

It is not that I think 50% is a lot but it is the same 50% when amazon is selling fakes. If amazon would be able to sell items that are original and the money would go to the right person maybe 50% is ok. This is not the case by a long shot.

omgomgomgomg 4y ago
As a former Amazonian who has worked on vat, compliance, taxes, product compliance etc, I can tell you, really from an unbiased perspective that Amazon is doing everything they can to terminate the bad actors. This includes the fake reviews etc. Lets say you have a charger for iphones, you cant have text for the ASIN saying for iphone, it will get delisted immediatelly, you have to say "compatible with iphone" and such. The main weakness is how products are created, the catalogue principle, this allows some to fly under the radar for a bit sometimes. And Amazon will not immediatelly shut down a whole sellers account, but rather target ASINs one by one. The best way for a buyer to deal with this is to leave a sellers(not product) review and ask for a refund, you will always get the refund, Amazon always pushes liability to the sellers in order to protect the brand image and to not be exploitable. Once theres enough of reviews and refunds, the sellers will get shut down and the funds will be held on hold, just like a banl does for credit card processors. The cost to do business on amazon with fakes repeatedly(need new companies every time etc) is quite high, if not prohibitivelly high. Do not suck it up, do the 2 things mentioned to keep the place tidy.
- runnerup 4y ago
  Amazon is doing nothing about the total product switches where hard drives have reviews about laundry detergent. They’re clearly not doing basic easy prevention. Customers try really hard to report stuff like this and Amazon actively thwarts them. It’s insane to say that Amazon is trying really hard to prevent fraud. Maybe some types of fraud, sure. But so much of the customers-facing fraud is actively supported by Amazon, like Amazon puts actual active effort into preventing customers from reporting it!
  - omgomgomgomg 4y ago