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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

#2

Post by seem_2211 »

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 also be something that every business has already planned for.

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

#5

Post by swalsh »

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.

From my reading, it's not removing them from the marketplace. Instead these are suppliers Amazon.com (not the market place) would buy in bulk directly from. They will now need to transition to the marketplace. There is a plus, which is they can probably ask a higher margin... but it also means they're now personally competing with anyone else who may have the same product, and now they're probably going to pay Amazon to warehouse their product.

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

#6

Post by matwood »

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.

Except that many of those businesses only exist because the reach and customer availability granted by Amazon.

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

#7

Post by whatshisface »

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.

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

#8

Post by Analemma_ »

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 business don't have a choice. A lot of the time, the choice is "sell on Amazon" or "don't sell". That's what monopsony is, and it's why Amazon needs to be broken up.

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

#9

Post by mdorazio »

To bypass the pay/nag wall: https://outline.com/9mHK5d

Important to note that this "purge" is only for wholesale suppliers, not for marketplace sellers like the title implies. Amazon is basically only going to purchase products for resale from large suppliers, and will shove the rest into the normal marketplace operations where they have to compete with everyone else on actually selling and shipping their products direct to consumers. Also of note is that this won't do anything to address the criticisms of rampant counterfeit and/or garbage quality products on the marketplace.

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