jwurunner - 5:03 pm on Oct 26, 2012 (gmt 0)
Amazon will get a ton of click thru data from you. They will know which products are more popular and what triggers a click. Then they will do what they have been for years and source the product for first party sales. Just about every product I exposed amazon too, they have started selling, usually at or below my cost. I realize we may be an exception because of our product lines.
Our original thought was use them to get the eyeballs and then if they did compete, we would have head start. Instead, we gave them more data to compete against us than we ever imagined. They do not need to profit on every item they sell. All they want is all the web traffic they can get so they can be the true one stop shop. They will offer a bunch of widgets as loss leaders to get customer info. Then they will market their video on demand and e-book which they make good money on thus offsetting the losses of selling your widget below their cost.
Of course if your product is something they can't source, then there is no real harm in selling or advertising there. Just because your niche seems to small for them doesn't mean it is.