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After Destroying Brick and Mortars, Amazon Planning to Cut Ties With Thousands of Small Vendors
I've read the linked articles closely, and am still a bit uncertain as to what exactly is being planned. What does "The mom-and-pops that have long relied on Amazon for a steady stream of orders will have to learn a new way of doing business on the web store. Rather than selling in bulk directly to Amazon, they’ll need to win sales one shopper at a time" actually mean?
Amazon does not seem to be saying that these smaller merchants will be banned from Amazon. Rather, it seems that either Amazon will be taking their products on "consignment" (not purchasing them in bulk, but providing sales & delivery support in return for a cut of the price), or simply providing the advertising platform for these merchants, with the merchants being directly responsible for fulfillment and delivery. Much more like the "eBay" model.
I would guess the latter. If so, that will severely diminish the products available through, and therefore the value to me of, Amazon "Prime", with it's free delivery and guaranteed delivery options. Also unknown is whether reliable shipment "tracking" will be available for these products.
With respect to having to "win sales one shopper at a time", I fail to see exactly what that implies. When I am shopping on Amazon (or anywhere else) the various merchants already need to convince me "one product at a time", no matter what the sales arrangement.
Frequently I already purchase directly from a merchant via Amazon, and usually the service is pretty good, though not as predictable as "Prime" delivery. They tend to use USPS a lot, though not always.
@MFO Members: If the poster doesn't know the specifics of Amazon as to who they are, and what they do that's his problem. Sounds like he's shops at low tier Dollar General Stores. Regards, Ted
There are a number of small sellers on Amazon that when you purchase from them it doesn't ship from the seller directly but from Amazon's warehouse, i.e., the order is from a small supplier but "fulfilled by Amazon." That means I assume Amazon is providing some sort of warehouse space for these sellers, buying their stuff in bulk so it's on the shelf and when a consumer buys it, though it's the seller's wares, Amazon takes care of the shipping. It sounds like that's about to end. I also wonder if it will affect bundling of sales for free shipping via Amazon. So if you buy over X dollars of goods at Amazon, even if it's a third party seller, you get free shipping because the stuff is all in Amazon's warehouse. If that ends because sellers no longer have warehouse shelf space, it will be very negative for small sellers.
"even if it's a third party seller, you get free shipping because the stuff is all in Amazon's warehouse. If that ends because sellers no longer have warehouse shelf space, it will be very negative for small sellers."
Free shipping is a mythical beast. Somebody is paying for it, and usually it's the customer, one way or another. Despite @Ted's typically pointless and nasty comments, I've been a major Amazon customer for over twenty years, and in fact last week purchased an emergency generator through them, for well over $1k.
That generator had "free shipping", half-way across the US, via FedEx. Is anyone so naive as to believe that the "free shipping" wasn't built in to the sales price?
The cost and aggravation to the small business isn't going to be the actual shipping charges, but rather the extra work and expense of maintaining an in-house shipping operation. Having wasted over twenty years of my life managing a small business (that would be a different twenty years than the ones cited above) I know whereof I speak.
As a long time “Prime” member I can tell you that their shipping speed has increased dramatically over the past month or so. They’re moving to 1-day Prime delivery - and are damned near there now (at least here in Michigan). Things have been arriving at amazing speed, though “officially” it’s still 2-day Prime. The USPS even delivered a package to our home late in the afternoon on Monday (Memorial Day). Interesting lesson in customer satisfaction. Rather than promise first and deliver later, they seem to have taken the opposite approach: First, become proficient at 1-day delivery and than announce it publicly later after you’ve perfected it.
This is not intended to be an ad for Amazon. I take no joy in reporting this. And I sympathize with the local B&M retailers who are being burned. Unfortunately, when 1-day becomes standard, that will impact them more than any of us can envision at the moment. Not nice guys. These are cut-throat retailers. Agree with OJ that somebody has to pay for the faster delivery. It boils down to convenience. First, the online product selection is near endless. They run a damned good website. And second, you can’t beat the convenience of having things dropped off at your front door. I guess folks are, at least in many cases, willing to pay for that convenience.
A trend now, which I’ve bought into, is to add a hundred or so dollars regularly to your “gift card account” with them. This helps avoid having to frequently update your checkbook / cc account every other day if you buy a lot of small items, So Amazon is now sitting on a huge slug of interest free cash that they can employ for useful purposes. Doesn’t get much better than that.
My one hope is that their employees are treated better and get the “fringies” their dedicated service would deserve. I fear that is not now the case.
@hank- Yes, you're right- the delivery speed has really picked up recently. Another new feature is the "scheduled delivery day". Since we are at the weekend place virtually every week from Friday through Monday, it's really nice to be able to schedule delivery for a Tuesday, when we're back in SF.
Comments
Amazon does not seem to be saying that these smaller merchants will be banned from Amazon. Rather, it seems that either Amazon will be taking their products on "consignment" (not purchasing them in bulk, but providing sales & delivery support in return for a cut of the price), or simply providing the advertising platform for these merchants, with the merchants being directly responsible for fulfillment and delivery. Much more like the "eBay" model.
I would guess the latter. If so, that will severely diminish the products available through, and therefore the value to me of, Amazon "Prime", with it's free delivery and guaranteed delivery options. Also unknown is whether reliable shipment "tracking" will be available for these products.
With respect to having to "win sales one shopper at a time", I fail to see exactly what that implies. When I am shopping on Amazon (or anywhere else) the various merchants already need to convince me "one product at a time", no matter what the sales arrangement.
Frequently I already purchase directly from a merchant via Amazon, and usually the service is pretty good, though not as predictable as "Prime" delivery. They tend to use USPS a lot, though not always.
Regards,
Ted
Regards,
Ted
Free shipping is a mythical beast. Somebody is paying for it, and usually it's the customer, one way or another. Despite @Ted's typically pointless and nasty comments, I've been a major Amazon customer for over twenty years, and in fact last week purchased an emergency generator through them, for well over $1k.
That generator had "free shipping", half-way across the US, via FedEx. Is anyone so naive as to believe that the "free shipping" wasn't built in to the sales price?
The cost and aggravation to the small business isn't going to be the actual shipping charges, but rather the extra work and expense of maintaining an in-house shipping operation. Having wasted over twenty years of my life managing a small business (that would be a different twenty years than the ones cited above) I know whereof I speak.
This is not intended to be an ad for Amazon. I take no joy in reporting this. And I sympathize with the local B&M retailers who are being burned. Unfortunately, when 1-day becomes standard, that will impact them more than any of us can envision at the moment. Not nice guys. These are cut-throat retailers. Agree with OJ that somebody has to pay for the faster delivery. It boils down to convenience. First, the online product selection is near endless. They run a damned good website. And second, you can’t beat the convenience of having things dropped off at your front door. I guess folks are, at least in many cases, willing to pay for that convenience.
A trend now, which I’ve bought into, is to add a hundred or so dollars regularly to your “gift card account” with them. This helps avoid having to frequently update your checkbook / cc account every other day if you buy a lot of small items, So Amazon is now sitting on a huge slug of interest free cash that they can employ for useful purposes. Doesn’t get much better than that.
My one hope is that their employees are treated better and get the “fringies” their dedicated service would deserve. I fear that is not now the case.