Amazon Is Poised to Unleash a Purge of Small Wholesale Suppliers • Hacker News Board

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

#111

Post by kevin_b_er » Tue, May 28, 2019, 10:15 PM UTC

knd775 wrote: post #52

JohnFen wrote: post #14

> 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,…

Did you read the full article? They aren't dropping other brands/sellers from the platform. They just aren't going to buying from them anymore. Currently, they buy from some high volume brands directly and then sell the products themselves. They are going to stop doing this with smaller brands, who will now need act as sellers on the platform.

They're dropping those brands into the midden heap that is the "marketplace" where you can't be sure of what you're getting. If Amazon was selling it directly, you had some confidence they were buying from that seller. No longer.

Amazon buys are now just as risky as Ebay ever was.

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

#112

Post by kevin_b_er » Tue, May 28, 2019, 10:21 PM UTC

erik_seaberg wrote: post #100

notatoad wrote: post #58

Earlier quoted context omitted.

a quick spot check of a bunch of anker products shows they're already a marketplace seller

Do they at least enforce that Anker products actually came from Anker and not some scammer who's happy to burn my apartment down?

No. It should hopefully be well known by now that Amazon "commingles" all inventory of a given item. You can never be sure if you'll get a well-made counterfeit on the "marketplace". Even if you PICK WHICH SELLER you get whatever's in the bin that the overworked amazon warehouse sub-sub-sub-contracted employee quickly plucks.

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

#113

Post by kevin_b_er » Tue, May 28, 2019, 10:24 PM UTC

binarysolo wrote: post #88

cptaj wrote: post #25

Earlier quoted context omitted.

This is completely true. We used to do some development work for a client in florida. They sold all kinds of batteries on amazon. One day, a single dispute brought their whole business down. They had a whole warehouse of employees and they all got fucked because some temp employee somewhere in the world half-read a dispute while hungover from the night before and clicked a button. No appeals, no recourse. Your entire…

These guys need to hire an Amazon reinstatement specialist - they're like $2k-10k a pop and basically help suspended guys get back to Amazon. It's nontrivial to get the business back but the main barrier is playing Amazon's game, writing the doc exactly the way they want it, and being super vigilant once you're on probation.

I just presume these guys have amazon employees on their own payroll. Like governement corruption, but libertarian where's there's even less recourse and no courts.

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

#114

Post by GarrisonPrime » Tue, May 28, 2019, 10:32 PM UTC

smeyer wrote: post #91

nacs wrote: post #89

Earlier quoted context omitted.

Also, they own Paypal which itself has tons of issues (it had them before the purchase and apparently those issues continue as regular HN posts show).

>they own Paypal They spun Paypal off into an independent company in 2015.

Yes, technically the are separate. But given how tightly the systems remain integrated, it appears that was just for show.

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

#115

Post by delfinom » Tue, May 28, 2019, 10:32 PM UTC

cannonedhamster wrote: post #41

corndoge wrote: post #33

Earlier quoted context omitted.

Doesn't this article say the exact opposite of what you just said?

No. Amazon is pushing smaller sellers into their marketplace platform which is ride with counterfeits, thieves, and garbage products with fake reviews purchased on Facebook. My wife and I stopped going to Amazon because product quality started getting so bad. It's to the point that I trust Alibaba or eBay over Amazon, which is a shame. I suspect there's a lot of less vocal people in the same boat who've started explo…

Yep, I have been alot of stuff from Aliexpress lately because you can find sellers that are quite reputable and actually support their shit somewhat. Amazon? You find people reselling shit from Alibaba and not caring a thing about it.

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

#116

Post by sodiumfree » Tue, May 28, 2019, 10:33 PM UTC

theturtletalks wrote: post #46

JohnFen wrote: post #43

Earlier quoted context omitted.

> Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Yes, but I avoid the marketplace sellers. I've been burned too often with those -- if I'm going to roll the dice on that sort of thing, I'm better off with eBay.

What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.

Are you considering the PayPal fees you pay for payment processing when you sell on eBay? That's on top of the approximately 10% that eBay charges. eBay also charges listing fees and final value fees. I haven't done a deep dive on my own selling data to come up with an accurate comparision, but I think they're comparable.

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

#117

Post by ikeboy » Tue, May 28, 2019, 10:34 PM UTC

theturtletalks wrote: post #46

JohnFen wrote: post #43

Earlier quoted context omitted.

> Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Yes, but I avoid the marketplace sellers. I've been burned too often with those -- if I'm going to roll the dice on that sort of thing, I'm better off with eBay.

What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.

FBA is cheaper than USPS is almost all cases. Once you throw in the fact that FBA fees included pick and pack which you'd otherwise have to pay for yourself, it's quite rare to find items more cost effective to ship directly than to use FBA. Primarily it's either very small items that can be shipped with flats, or very large items where dimensional weight comes into play.

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

#118

Post by JohnFen » Tue, May 28, 2019, 10:49 PM UTC

derefr wrote: post #108

JohnFen wrote: post #101

Earlier quoted context omitted.

OK, I confess that I am a total idiot, but I don't understand what you're saying here at all. It also doesn't seem to be what the article is saying. > Smaller brands will still be fulfilled by amazon (products stored in amazon's warehouses) but the actual seller will be the product's brand. As opposed to whose brand? Isn't this how it's worked for years already? > This makes that brand compete with other sellers sell…

It's about whose balance sheet the stock is on. If Amazon buys an iPhone, and then lists it for sale on the Amazon store, that's Amazon's iPhone. If Amazon doesn't manage to sell it, Amazon has lost money. If Amazon does sell it, they capture the profit margin between the price they bought it at, and the price they sold it at. Apple, who sold Amazon the iPhone originally, has no further business relationship with the…

Thank you. I actually do understand how consignment works, but I truly appreciate your completeness and the time you put into explaining this to me.

I guess what gets me confused is two things -- first, I thought that the only things that Amazon didn't sell on a consignment basis were things that actually carried Amazon branding. Second, the article seems to imply something a bit different than what you're explaining here.

So, just to check my understanding, this move by Amazon won't really affect anything as far as I am concerned as a customer?

In other words, right now I avoid buying anything from Amazon that Amazon isn't fulfilling out of its warehouses because I've had truly terrible experiences with things that aren't. This change won't reduce the number of items available for purchase with that constraint?

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

#119

Post by sodiumfree » Tue, May 28, 2019, 10:53 PM UTC

theturtletalks wrote: post #46

JohnFen wrote: post #43

Earlier quoted context omitted.

> Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Yes, but I avoid the marketplace sellers. I've been burned too often with those -- if I'm going to roll the dice on that sort of thing, I'm better off with eBay.

What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.

> ...most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS.

This is not universally true. As a seller on Amazon, using both FBA and seller-fulfillment, there is a lot of "it depends" in all of this.

Some items we can ship cheaper, especially to local zones. But as we're on one coast and we have a lot of customers on the other coast, FBA can be a real saver on the shipping charges.

Size and weight of the package affect the shipping charge, but on some products we sell, we find the fulfillment fees to sometimes get as low as less than 1/2 of what it would cost us to ship direct, even by the cheapest method we can use.

If you're looking at the fulfillment fees compared to what you get charged to ship a package, make sure you're also considering that Amazon helps distribute the products to regional fulfillment centers. It's Amazon's employees that pick and pack the orders. Amazon pays for the box it ships in. Amazon handles customer service and return processing, or reshipment if the item is damaged in transit, amongst other things.

Admittedly, this is not easy to consider all of the pros and cons, expenses and savings. FBA can also be a difficult beast to deal with when they don't check in your inventory, temporarily lose 300 units. Having to deal with Seller Support will cost you in terms of stress and its effects on your receding hairline, or your liver if you need to keep a bottle on your desk as you try to get problems resolved.

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

#120

Post by theturtletalks » Tue, May 28, 2019, 10:56 PM UTC

ikeboy wrote: post #117

theturtletalks wrote: post #46

Earlier quoted context omitted.

What most people don't realize is that Amazon fees are 15% and most suppliers do FBA which tacks on a more expensive shipping charge than you would have otherwise with USPS. eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.

FBA is cheaper than USPS is almost all cases. Once you throw in the fact that FBA fees included pick and pack which you'd otherwise have to pay for yourself, it's quite rare to find items more cost effective to ship directly than to use FBA. Primarily it's either very small items that can be shipped with flats, or very large items where dimensional weight comes into play.

This is a good point, but Amazon tacks on even more fees if you want to fulfill those orders outside of Amazon. We used to sell small electronics on Amazon and other channels which used to cost $2.60 to ship USPS.

We signed up for FBA and they charged $5.95 to fulfill each order. Even if picking and packing costs $1-$2, you still make more profit shipping it yourself. We used to have 3 workers fulfill 150 orders a day from our warehouse which equals $0.80 to "pick and pack" and can be sent to any channel.