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>>Systems that connect producers directly to consumers will have lower costs because there's no middleman that needs to skim profits. Will it? Amazon and the l
by carterehsmith 11y ago
>>Systems that connect producers directly to consumers will have lower costs because there's no middleman that needs to skim profits.
Will it? Amazon and the likes operate on notoriously slim margins whilst buying at wholesale prices, and getting shipments in bulk.
Whereas me buying 1 widget from Shenzhen, that will be retail price, plus shipment for 1 single item overseas, that will cost way more than Amazon is paying per bulk-shiped item. I don't see how all that could add up being cheaper than buying it at Amazon or Walmart or whatever.
- natrius 11y agoWholesale prices exist because it's hard to find customers. Selling in bulk to a single customer is a good deal. However, when it's effortless to connect producers with customers, everyone will get wholesale prices. You won't pay to ship one single item. The entire batch from the factory that's heading for your country will go out together on one boat with lots of other stuff. Instead of going to an Amazon warehouse when it gets here, it'll just go to you, along with all the other goods from the port headed to your area. Decentralizing shipping will make it more efficient, too. Another option is that a manufacturer who expects overseas customers can ship the goods to convenient locations for their customers to get faster shipping times. Amazon uses part of their markup to pay for that today. Customers will pay for it directly in the future. Customers will pay for everything directly. Anyone with a warehouse will be able to make money by participating in the decentralized retail system, but today, it's impossible for those people to compete with Amazon and Walmart. Competition will drive down profit margins.