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A colleague of mine commented that he would not sell volume through Amazon, and instead creates his own ecommerce sites. Why? Because, he argued, Amazon uses vo

by bravura 14y ago

A colleague of mine commented that he would not sell volume through Amazon, and instead creates his own ecommerce sites. Why? Because, he argued, Amazon uses volume sellers to discover new products to sell, and then Amazon undercuts large sellers after the sellers have done all the market validation. I don't know if this is true or not, but if it is it's bloody brilliant. So this seems like a great strategy to improve market discovery for Amazon.

deleted 14y ago
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ww520 14y ago
On the other hand, he's piggybacking on Amazon's marketing clout, branding, and large customer base to sell his products if he's going through Amazon. The thing about going it on your own is that no one knows about you and your products. It takes lots of marketing to build up your site.
coderdude 14y ago
Amazon used that strategy to figure out which furniture manufacturers to carry. Drop-ship selling of furniture was quite big a few years back and when Amazon realized that they invited furniture retailers to join the marketplace. Once they had an idea of which items sold well, the return rates on those items, margins, etc. they formed relationships with the manufacturers and undercut the retailers by selling the same items themselves at lower prices. So it is both brilliant and very true.
ybother 14y ago
That would be a real bad idea in this scenario. It would reduce their profits and decrease the chance of the seller being able to pay back the loan in full. When your playing with amazons money, your interests are aligned and what is good for you is good for them and viceversa.
Cherian_Abraham 14y ago
Remember Circuit City? They were the biggest victim that fell to the same Amazon practice.
desbest 14y ago
This is true. I read online a retailer saying the same thing, but I can't remember where.
sundae79 14y ago
>So this seems like a great strategy to improve market discovery for Amazon. I am guessing if walmart does something similar, it is not brilliant, but in fact evil. I don't understand the enthusiasm for things like this if it is a brand that we like. Remember walmart tried to open its own bank, guess what happened?
- dbaupp 14y ago
  I think that "great" should be interpreted as "great-for-Amazon".
paulhauggis 14y ago
I've seen this myself. I was a seller last year and whenever I found a product to sell with a good profit margin, Amazon would eventually come along and undercut me. Since they can buy in much higher volumes than I, they win. I recommend that nobody ever sell their products on Amazon. Yes, it's a great market and you will get sales. However, all of their seller support is automated and if their automated scripts somehow think you are violating one of their rules, you get kicked off forever. I was kicked off after selling for 8 months with a near 100% track record and great customer service. Why? Amazon couldn't tell me. Their answer was: "Due to the proprietary nature of our business, we can't disclose the reason". They held over $5000 of my money for 90 days. It's lucky I had savings or I would have been in trouble. The customer is also king. I had multiple scammers order over $100 in items, file a claim and get their money back without ever sending the item back to me. Amazon (unlike Ebay) doesn't allow you to ban a scamming user nor do they care. I made them thousands of dollars in my time there and they couldn't even give me the decency of a person to talk to. I'm disgusted by their business practices.

by bravura 14y ago

deleted 14y ago

[deleted]

ww520 14y ago

On the other hand, he's piggybacking on Amazon's marketing clout, branding, and large customer base to sell his products if he's going through Amazon. The thing about going it on your own is that no one knows about you and your products. It takes lots of marketing to build up your site.

coderdude 14y ago

Amazon used that strategy to figure out which furniture manufacturers to carry. Drop-ship selling of furniture was quite big a few years back and when Amazon realized that they invited furniture retailers to join the marketplace. Once they had an idea of which items sold well, the return rates on those items, margins, etc. they formed relationships with the manufacturers and undercut the retailers by selling the same items themselves at lower prices. So it is both brilliant and very true.

ybother 14y ago

That would be a real bad idea in this scenario. It would reduce their profits and decrease the chance of the seller being able to pay back the loan in full. When your playing with amazons money, your interests are aligned and what is good for you is good for them and viceversa.

Cherian_Abraham 14y ago

Remember Circuit City? They were the biggest victim that fell to the same Amazon practice.

desbest 14y ago

This is true. I read online a retailer saying the same thing, but I can't remember where.

sundae79 14y ago

>So this seems like a great strategy to improve market discovery for Amazon. I am guessing if walmart does something similar, it is not brilliant, but in fact evil. I don't understand the enthusiasm for things like this if it is a brand that we like. Remember walmart tried to open its own bank, guess what happened?

dbaupp 14y ago
I think that "great" should be interpreted as "great-for-Amazon".

paulhauggis 14y ago

I've seen this myself. I was a seller last year and whenever I found a product to sell with a good profit margin, Amazon would eventually come along and undercut me. Since they can buy in much higher volumes than I, they win. I recommend that nobody ever sell their products on Amazon. Yes, it's a great market and you will get sales. However, all of their seller support is automated and if their automated scripts somehow think you are violating one of their rules, you get kicked off forever. I was kicked off after selling for 8 months with a near 100% track record and great customer service. Why? Amazon couldn't tell me. Their answer was: "Due to the proprietary nature of our business, we can't disclose the reason". They held over $5000 of my money for 90 days. It's lucky I had savings or I would have been in trouble. The customer is also king. I had multiple scammers order over $100 in items, file a claim and get their money back without ever sending the item back to me. Amazon (unlike Ebay) doesn't allow you to ban a scamming user nor do they care. I made them thousands of dollars in my time there and they couldn't even give me the decency of a person to talk to. I'm disgusted by their business practices.