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Yeah, but if you search and replaced the part where the $88 is to pay the manufacturer, and instead say it is to pay they employees and the cost of materials, i
by cbsmith 3y ago
Yeah, but if you search and replaced the part where the $88 is to pay the manufacturer, and instead say it is to pay they employees and the cost of materials, it's not like that suddenly looks like a viable business.
- TylerE 3y agoAnd saying just don't use FBA is no solution either. Shipping large heavy stuff is expensive, and I best Amazon has much better rates negotiated with the carriers.
- ComputerGuru 3y agoStorage plus shipping through FBA isn’t cheap. The problem isn’t that FBA is expensive, the problem is that selling on Amazon but not via FBA is heavily punished with placement and appearance leading to poor conversion rates.
- starluz 3y agoYes this is the issue for consumers as well. The first 16 pages of every search are nearly identical low quality fba products. Need a search layer to find the small sellers!
- behringer 3y agoI don't even buy from small sellers on Amazon mainly due to terrible resilts. That's what ebay is good for.
- mcfedr 3y agoYea, but be honest, you really only want to buy from FBA because that's the one that will arrive tomorrow
- hellojesus 3y agoThis means Amazon has the most efficient pipeline to consumers. Where is the harm? It seems like a benefit to consumers.
- tebbers 3y agoAnd that hopefully will be the basis of any anticompetitive action. Sounds like logistics and commerce might need to be broken up.
- hellojesus 3y agoWhy? This doesn't make any sense. Why would a vertically integrated business that provides the most efficient outcome for the consumer need to be broken up?
- __alexs 3y agoWhy do you need to sell on Amazon at all? Surely that is where the problem is?
- cowsandmilk 3y agoExcept it has been for decades. In traditional retail, the split is 60% store, 40% seller. So your same $200 product would be $80 to the seller, not $88. And manufacturers have been operating with that split for a long time.
- cbsmith 3y agoYou're talking about gross margin/mark up, and there really isn't a "traditional retail margin". It varies a lot by product, but, as an example, the typical mark up for grocery stores is 15%. I used to do retail sales for appliances, including BBQs. The markup could get as high as 50%, even more for high end BBQs that sell in the $800+ range, but was generally more like 30%... and discount outlets or online retailers, it was much more like the grocery store mark up. A $200 BBQ with a markup of 150% like you're describing is not a thing I ever saw.
- megaman821 3y agoAre talking about markup from cost of goods? The manufacturer costs usually take into account their overhead; assembly line, warehousing, transport, running the business, profit etc. Amazon is taking over some of those things for sellers, so yes they take a bigger percentage than a normal retail store.
- cbsmith 3y agoComparing to retail is not apples to apples. The overall margins on Amazon tend to be lower across the board. So, yes, there's a problem with comparing directly with retail in general. Amazon is taking on distributor costs, but they aren't really doing anything to reduce manufacturer costs. Manufacturers still need an assembly line, warehousing, shipping (to get it to Amazon), & running their business... maybe they're not getting any profit, but that's the problem we're talking about. While amazon is covering their own warehouse & fulfillment shipping costs, that's really that different from costs normally borne by retailers who have warehouses and handle delivery to their retail outlets.