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Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

bloomberg.com

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Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#11

Post by mikehollinger »

mjevans wrote: post #4

I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.

So... blockchain for product quality? :-)

Yeah, I'd like to be able to be able to look into / find who's a member of the bazaar and just fencing products, versus who's selling their own items directly. For example - I wouldn't buy speakers from some random reseller. I'd buy 'em from the original manufacturer, or the handful of "known" resellers that we all know like the big box stores.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#12

Post by bizimsir »

mjevans wrote: post #4

I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.

Unfortunately Amazon won't have a real reason to do that :(

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#13

Post by bdcravens »

lostmymind66 wrote: post #3

This is why I would never base my business on a marketplace like Amazon. You are always beholden to them and the reality is you aren't really independent.

Many small-time businesses are pretty much FBA only. That's why there's so many similar products with little more than branding differences: this is done in China and shipped to Amazon. There's probably not a small percentage of 4-hour-workweek types who are very unlikely to go from working from home to staffing a warehouse and performing fulfillment, running an e-commerce store and trying to figure out discoverability.

(though according to a sibling comment, that may not be what the article is talking about - unfortunately I'm paywalled out)

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#14

Post by JohnFen »

> Amazon’s aim is to cut costs and focus wholesale purchasing on major brands like Procter & Gamble, Sony and Lego, the people said. That will ensure the company has adequate supplies of must-have merchandise and help it compete with the likes of Walmart, Target and Best Buy.

That would cut out most of my purchases from Amazon. It makes no sense to buy stuff from Amazon that I can get from my local big-box retailer, after all.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#15

Post by swalsh »

This is a big move, it transitions Amazon from a more traditional retailer, to something more akin to a dropshipper. I'm reminded of Wayfairs Castlegate business. The manufacturer now takes on the responsibility of forecasting, they assume the risk of holding inventory, but Amazon still controls the customer impact things like boxing and shipping.... and they get to do it at the manufacturers cost.

It's quite brilliant actually.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#16

Post by save_ferris »

seem_2211 wrote: post #2

This sounds bad, but is honestly anyone surprised? Client/customer concentration is something that every business needs to be watching as a matter of critical importance. The big boys will always play rough and negotiate things on their terms when they can get away with it - be it the Government, Apple, Walmart or Amazon. I have sympathy for the companies that are about to be put under immense stress, but it should a…

No, it's not surprising. The lack of surprise that a company's greed is boundless shouldn't be the standard to which we hold them accountable for their behavior. It's kinda hard to see how Amazon won't eventually collide with antitrust forces at some point.

The rise of tech giants like Amazon has largely coincided with their development of entire markets that they control. There's so much money to be made establishing the market and taking small transaction fees as opposed to just bringing a product to an existing market.

Not only did Amazon make money by creating the go-to online marketplace, they captured tremendous amounts of data on what people were and weren't buying. This allowed them to spin off cheaper versions of competing products, undercutting the businesses that they were already making money from. They dominate the sales channels, and now they're going after the vendors directly, starting with the small, low-hanging fruit.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#18

Post by bdcravens »

mjevans wrote: post #4

I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.

Sounds like a great browser extension: identify, with a % of confidence, if the product is available from an Alibaba wholesaler.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#19

Post by URSpider94 »

whatshisface wrote: post #7
seem_2211 wrote: post #2

This sounds bad, but is honestly anyone surprised? Client/customer concentration is something that every business needs to be watching as a matter of critical importance. The big boys will always play rough and negotiate things on their terms when they can get away with it - be it the Government, Apple, Walmart or Amazon. I have sympathy for the companies that are about to be put under immense stress, but it should a…

> is honestly anyone surprised? I'm surprised. I thought that when the entire store was run by computers the marginal cost of adding another supplier would be zilch, and the long tail would prosper.

The long tail DOES prosper. Nothing is stopping small vendors from selling their products on the Amazon marketplace. If true, it’s just suggesting that Amazon will no longer place purchase orders and hold inventory on its books.

Even with automation of on-boarding, scaling the selection still requires scaling inventory costs if it’s merchandised by Amazon itself.

Re: Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers

#20

Post by hn_throwaway_99 »

mikehollinger wrote: post #11
mjevans wrote: post #4

I would like tractability to original manufacturer, as well as any claims for compliance with various safety and production quality standards. Pretty much supplier transparency.

So... blockchain for product quality? :-) Yeah, I'd like to be able to be able to look into / find who's a member of the bazaar and just fencing products, versus who's selling their own items directly. For example - I wouldn't buy speakers from some random reseller. I'd buy 'em from the original manufacturer, or the handful of "known" resellers that we all know like the big box stores.

This was discussed in depth on HN a while back about why blockchain doesn't really work well for supply chain management: https://blog.smartdec.net/you-do-not-need-blockchain-eight-p...
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