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I suspect these Amazon loans are secured, with inventory as the collateral, which in plain English means that if the borrower defaults, the lender (Amazon) can
by cs702 14y ago
I suspect these Amazon loans are secured, with inventory as the collateral, which in plain English means that if the borrower defaults, the lender (Amazon) can take the inventory and sell it to payoff the outstanding balance of the loan.
If I'm right, given that Amazon manages fulfillment for many third-party sellers (meaning that their inventory is already stored in Amazon warehouses[1]), these new Amazon loans appear to be virtually no-risk.
Brilliant.
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[1] http://www.amazonservices.com/fulfillment-by-amazon/benefits.htm http://www.amazonservices.com/fulfillment-by-amazon/benefits...
- ippisl 14y agoAnd this gives the incentive for sellers who don't use amazon's warehouses incentive to use them. Really , when you think about that ,classically sellers/wholesellers have the following roles: 1. Finding people/stores willing to buy stuff 2. Financing of buying stuff from many manufacturers(until getting paid) 3. Storing said stuff 4. Distributing said stuff to stores, online stores and users 5. Prediciting demand 6. Marketing to users/stores. It seems that amazon is attacking/replacing all those roles, and probably doing a better job. The end game seems simple: To skip the sellers(for products sold online), and deal directly with manufacturers(like their doing with ebooks). It's not unique to them, walmart already did it. But amazon sells almost everything.