[ProMarket] Amazon’s Latest Supplier Purge Is a Classic Indicator of Price Predation - Overclock.net - An Overclocking Community

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[ProMarket] Amazon’s Latest Supplier Purge Is a Classic Indicator of Price Predation

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post #1 of 66 (permalink) Old 03-15-2019, 02:56 AM - Thread Starter
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[ProMarket] Amazon’s Latest Supplier Purge Is a Classic Indicator of Price Predation

Shopping on Amazon recently I noticed a massive reduction in selection. Wondering what happened, I did some research and found out some very concerning things. After years of investing in its warehousing and fulfillment network, Amazon is apparently pulling back and moving to a more eBay-like model.

[ProMarket] Amazon’s Latest Supplier Purge Is a Classic Indicator of Price Predation]
https://promarket.org/amazons-latest...ice-predation/
Quote:
Amazon Plans to Exit the Fulfillment Business
In early March, news broke that Amazon had abruptly stopped buying products from many of its wholesalers. Bloomberg’s Spencer Soper explained that the move allows Amazon to offload the costs of purchasing, storing, and shipping products to its suppliers. In a boilerplate statement published in Bloomberg, Amazon responded: “We regularly review our selling partner relationships and may make changes when we see an opportunity to provide customers with improved selection, value, and convenience.”
This prosaic comment inadequately describes the magnitude of Amazon’s move. Amazon’s noisy purge has finally revealed a crucial part of its recoupment strategy: leveraging its growing monopoly power to offload variable costs associated with storage and shipping onto its wholesalers and suppliers.

[Bloomberg] Amazon Suppliers Panic Amid Purge Aimed at Boosting Profits
Quote:
Amazon.com Inc. has abruptly stopped buying products from many of its wholesalers, sowing panic.
The company is encouraging vendors to instead sell directly to consumers on its marketplace. Amazon makes more money that way by offloading the cost of purchasing, storing and shipping products. Meanwhile, Amazon can charge suppliers for these services and take a commission on each transaction, which is much less risky than buying goods outright.
Source: https://www.bloomberg.com/news/artic...mmerce-profits



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post #2 of 66 (permalink) Old 03-15-2019, 03:04 AM
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Oh dear. This was being discussed a few years back as a possible way for Amazon to increase profits and to see it happening sort of sucks. Man that really stinks.


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post #3 of 66 (permalink) Old 03-15-2019, 05:14 AM
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Does this mean FBA arbitrage is dead?
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post #4 of 66 (permalink) Old 03-15-2019, 05:22 AM
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Sounds like they just switched to a drop ship model of business. It can actually beneficial for both suppliers and Amazon. Oftentimes if a buyer (amazon) buys to much of a good and they have their own funds tied up in the inventory, they can't buy into new product in a fiscally responsible manner. This leads to negotiations with their suppliers to decrease costs, fund markdowns, or take all of the product back. In those situations, the supplier usually gets stuck with a large amount of poor quality goods that they have to either find someone else to sell to or write it off.
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post #5 of 66 (permalink) Old 03-15-2019, 05:41 AM
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Didn't newegg.com do something similar?

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post #6 of 66 (permalink) Old 03-15-2019, 05:52 AM
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Hi,
Not sure how anyone survives selling on either amazon or newegg for that matter
With all the added fee's and policy stuff you'd go broke in just shipping fee's
Only true winner is the shipping company usually and even they get nibbled down to a nub dealing with amazon anyway

But there's always prime right watch b-c... rated old movies for a yearly fee for free shipping

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post #7 of 66 (permalink) Old 03-15-2019, 06:25 AM
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Quote: Originally Posted by ThrashZone View Post
Hi,
Not sure how anyone survives selling on either amazon or newegg for that matter
With all the added fee's and policy stuff you'd go broke in just shipping fee's
Only true winner is the shipping company usually and even they get nibbled down to a nub dealing with amazon anyway

But there's always prime right watch b-c... rated old movies for a yearly fee for free shipping
Yeah I'm currently looking into fba as a side gig and the fees can be killer. Think the money comes from creating a brand so you can better control the product you're selling.

Lol. Older B movies are the good stuff on prime video. Half the stuff looks like you could make it in your backyard on a cellphone. Edit it in windows movie maker.
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post #8 of 66 (permalink) Old 03-15-2019, 06:31 AM
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Hi,
I tried prime 30 free thing
I was done watching after day 5 lol nothing left but as you say backyard produced stuff

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post #9 of 66 (permalink) Old 03-15-2019, 06:44 AM
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Quote: Originally Posted by ThrashZone View Post
Hi,
I tried prime 30 free thing
I was done watching after day 5 lol nothing left but as you say backyard produced stuff
I've been a prime customer for years. Love me some 2 day shipping.

Yeah their prime video is a joke for the most part. Can't complain about it too much since it's just included with prime.

They also got me on Amazon music. I have 5 dots. Picked up the 3 months of amazon music for 0.99 and now need the thing. Well, I really like it but my ol'lady loves it so I'm stuck with it.

I'm pretty embed in Amazon by this point. I happily overpay for an item to get fast shipping and the assurance that I could return it for any minor complaint with a full refund.
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post #10 of 66 (permalink) Old 03-15-2019, 07:10 AM
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Amazon Prime also includes Twitch Prime and Amazon Music, and they also make some original shows. It's a little better value than what you're making it out to be.

I pay €35 a year for all of it. I think it's a pretty good deal.

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