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Is Amazon eating your lunch?

     
3:17 pm on Jun 27, 2012 (gmt 0)

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I was getting ready to list my products on Amazon, but I came across this article:

[online.wsj.com...]

Has anyone found Amazon competing with them after they started listing their products there?
6:57 pm on June 27, 2012 (gmt 0)

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Yep. They do. They also have trouble following MAP. I still sell on Amazon but we are careful about how we sell. We can usually beat them on smaller items, which is our bread and butter in any case.
11:26 am on June 30, 2012 (gmt 0)

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JackieBlue, how are you careful about how you sell? What is MAP?
11:53 am on June 30, 2012 (gmt 0)

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The wsj link is subscriber only..

One way to avoid Amazon "eating your lunch" if you are selling products made by someone else ..is not to use their "fulfillment"..or better still, to manufacture what you sell yourself, and not use their "fulfillment" which is IMO only suited to very high volume low margin sellers and big box outfits..

btw.. Amazon require barcodes to list whether or not you use their fulfillment systems..

MAP Minimum advertised Price ( retail price fixing ) [en.wikipedia.org...] ..many threads on here about it in the past..illegal in many countries..
3:26 pm on June 30, 2012 (gmt 0)

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Even if I don't user their fulfillment, they can still start selling something I'm listing on Amazon once they see how many I'm selling, right?

Interesting that they require barcodes. So I need a UPC to list an item on Amazon basically?
4:15 pm on June 30, 2012 (gmt 0)

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Yeah, MAP is Minimum Advertised Pricing. A manufacturer can set a minimum price in the U.S. and will often terminate the relationship if you do not follow it. Amazon does everything they can to get around it.

Amazon does require UPCs (barcodes) but somehow I've seen some products listed by my competitors that I know don't have UPCs.
3:33 pm on July 4, 2012 (gmt 0)

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Amazon does require UPCs (barcodes) but somehow I've seen some products listed by my competitors that I know don't have UPCs.


Not true. I sell products on Amazon, stocked in Amazon's warehouse (or not), where I've applied an ASIN sticker, prior to shipping it to the warehouse. No UPC required. In my genre, few products have any form of GTIN.
4:42 pm on July 4, 2012 (gmt 0)

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It is true..I also sell on Amazon and I have to provide UPC EAN..even though I do not stock in their warehouse..And I've spent many hours on the phones with them trying to get them to make exceptions ..they have always refused..exceptions can be given by Amazon ..but not in all categories of items, not in all countries, and if given , are subject to review..mine are mainly "apparel"..my own brands..

[amazon.com...]

UPC.. EAN are not expensive..around ( varies from country to country ) $300.oo and yearly renewals at around $150.oo gets you 100k codes..or you can buy life time codes ( no renewal fees ) from dealers in smaller quantities..
5:24 am on July 5, 2012 (gmt 0)

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The whole article can be reached from a search - [google.com...]
6:27 am on July 5, 2012 (gmt 0)

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Strange that we're getting contradictory info from jwolthuis and Leosghost about the UPC's. jwolthuis, did you request an exception?
8:04 am on July 5, 2012 (gmt 0)

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Does anyone find themselves worse off after Amazon has eaten their lunch than they were before they began selling on Amazon and so wish they had never sold on Amazon?
9:30 am on July 5, 2012 (gmt 0)

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"Horse's mouth"

[amazon.com...]

[amazon.com...]
1:31 pm on July 5, 2012 (gmt 0)

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Yes, Amazon competes with small merchants.

Yes, Amazon WILL outrank (especially after Panda/Penguin) your site in Google for your product KW, both in free SERPs and on G Shopping.

Yes, Amazon uses fulfillment to spot new best selling products and WILL sell those themselves.

Yes, Amazon constantly bombards merchant with offers to sell for less, even though it is obvious (by actual dollars) that instead what they need to do is to bombard that one guy who sells out of his basement for fun that has lowest price than everyone to FORCE him to bring the price UP (close) to the level of everyone else (so him AND everyone else earns MORE, not LESS).
1:47 pm on July 5, 2012 (gmt 0)

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I made more money as an amazon affiliate than i did selling through them.. BUT, they undoubtedly use the data collected from their market partners to push products.

Sometimes you get lucky though, if you follow a niche that sells through quickly and Amazon sells out, it really is a nice delight when your product is now the only returned vendor - especially if you have some inventory at their distribution centers and can make the prime users happy.

All in all, selling through amazon for me was very.. tiring to say the least. Even though my commerce site had full integration into the experience it just felt so punishing to try and sell through there for most of my products and there werent enough of "me" to go around investing time as i did on a few nich products to make it worthwhile.
3:25 pm on July 5, 2012 (gmt 0)

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Yes, Amazon competes with small merchants.

Yes, Amazon WILL outrank (especially after Panda/Penguin) your site in Google for your product KW, both in free SERPs and on G Shopping.

Yes, Amazon uses fulfillment to spot new best selling products and WILL sell those themselves.


Will Amazon also spider your ecommerce website to scrape images and descriptions for their own use .. YES. We caught them doing this a few years back... had to block their server ranges. Oddly enough, it was just after they had approached us wanting us to sell on their site. We told them no.

We've also found that they will backdoor smaller retailers and start fulfilling their own orders being supplied by your distributors.

Personally, I think Amazon should have to charge tax for every item in their stores since they have so many affiliates across the country. That should slow their sales just a bit.
3:27 pm on July 5, 2012 (gmt 0)

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fascinating -

it seems that ByronM is speaking in past-tense -

do I conclude that ByronM has moved on to greener pastures?
6:20 pm on July 6, 2012 (gmt 0)

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Personally, I think Amazon should have to charge tax for every item in their stores since they have so many affiliates across the country. That should slow their sales just a bit.


They've been dropping affiliates in any state that tries to levy such a tax, they are willing to slow their own sales to avoid taxes. On the bright side, for the occasional seller, there are sites springing up that are indeed free to use. Kijiji in Canada is getting big I hear.
8:33 am on July 7, 2012 (gmt 0)

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Food for thought.

I just ordered a used book. (Literally "just": about 5 minutes before starting this post.)

Seller A charged $19 plus shipping.
Seller B charged $29 plus shipping.
Seller C charged $39 plus shipping.

This is, please note, the identical physical copy, originating from Seller X. (I didn't think to check their own site until after placing the order-- but they wouldn't let me in with any of six browsers, so no point of comparison there.)

Guess who Seller A is.

Option 1: Seller B is applying an excessive markup, and Seller C is applying a beyond-the-pale markup.

Option 2: Seller C is applying an excessive markup, and Seller A is taking a loss on this individual item in order to further long-term plans.

I ordered from Seller A. So shoot me.
4:35 pm on July 7, 2012 (gmt 0)

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Seller C is applying an excessive markup, and Seller A is taking a loss on this individual item in order to further long-term plans.


Amazon does that a lot. They only reason they would knowingly do that is to eventually keep other sellers from listing that product and once their gone they have the monopoly.
5:50 pm on July 7, 2012 (gmt 0)

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I know reasonably well a publisher of an item I promote as affiliate on amazon.
The publisher sells it directly for X USD (but well paying and shipping is much more complicated than it is at amazon.com).
The publisher also ships stock to amazon and sells it for USD X+1 there (end user price- of course amazon needs a big margin)

Every time the publisher slacks up a bit in keeping up the stock at amazon, amazon starts to promote some of those sellers trying to sell it through amazon at 3*X or even 7*X. Since I sell quite a few of these items (about a dozen or so a day) as an affiliate I notice it too: the volume drops as most people aren't ready to pay such ridiculous amounts, but those that do sell make up for the loss in volume and actually make me earn more as affiliate in the end. Still I absolutely hate to promote those selling the item at such inflated prices - I feel like I help them cheat my visitors. And hence I tune down the promotion and am even making it more automated to completely stop promoting items only sold by 3rd party sellers.

It's simply dishonest IMHO to promote the 3rd parties selling at such inflated prices.
6:12 pm on July 8, 2012 (gmt 0)

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I'm in the process of running down my inventory on Amazon and will soon leave.
3:09 pm on July 9, 2012 (gmt 0)

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We stopped selling about a year ago on Amazon. At one point we had 5000+ different products listed. Amazon over the last 3 years went from carrying ZERO to carrying 95% of our products, all at or near our cost. Sadly, in our industry, many of the large manufactures, that are the majority of our sales, gave Amazon price breaks to get them to carry the products.

The do sell a fair amount of the products below both ours and their cost. We were told they do this to drive traffic to their streaming products and e-books.

Looking back on it, we should of de-listed everything the day they started selling our products at a price where we could not compete. All we did was give them a ton of sales data that they used against us.

Good luck to all that sell on their platform.

In the end, it is their playground with their rules. Unless the product is unique or out of their reach I would be leery as to what you list.
2:10 am on July 10, 2012 (gmt 0)

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What a nightmare. No way am I selling on Amazon. Thanks for the info everyone.
6:35 pm on July 10, 2012 (gmt 0)

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We stopped selling about a year ago on Amazon. At one point we had 5000+ different products listed. Amazon over the last 3 years went from carrying ZERO to carrying 95% of our products, all at or near our cost.


And the worst part is that now they're probably using images and text that you provided to them. That's why they require you to have images without watermarks and to not have your store or company name in the description. I liked Amazon when they just sold books, music and movies. I dont even shop there anymore since they also don't pay states the sales tax they deserve.
4:04 pm on July 12, 2012 (gmt 0)

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For those that are having issues with Marketplace, have you considered Product Ads? You get to keep all the sales data and the customer data. Amazon gets a PPC fee. We have run this for 1+ year with good results.
2:21 am on July 13, 2012 (gmt 0)

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Amazon can be the big bad wolf to the internet like Walmart is to brick n mortars. But I personally love them both because we as a small business have something that neither of them do not have, speed of getting products in house. When they run out of products, it can take months before amazon will get them in again and that is where the small business can take over the listing, well at least for awhile. (If amazon is my competitor with the listing, I do not send it FBA.)

Barcodes: It is different with every catagory, meaning with sporting goods, you need a upc. With Jewerly, no upc required and with like sewing/crafts you can request no upc and usually get it.

Pictures: If you have a product on amazon and amazon starts selling it, replace your picture to a crappier one or the manufacturers, wait a week and then remove the listing. They do not have your good picture anymore.

Personally I do not put all of my eggs in one basket. It can take years before google gets your listing to #1 organically (and then google changes the rules again) whereas amazon is instant cash and has many many eyes.

Just think outside the box and study the top sellers, remember not everyone is selling at cost.

Good luck and happy selling.
11:58 am on July 13, 2012 (gmt 0)

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Amazon require barcodes to list whether or not you use their fulfillment systems..

I assume you mean the UPC rather than the phyisical barcoding. Thats a perfectly reasonable requirement.
1:29 pm on July 13, 2012 (gmt 0)

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I assume you mean the UPC rather than the phyisical barcoding.

I did :)
Thats a perfectly reasonable requirement.

I agree :)
1:42 pm on July 13, 2012 (gmt 0)

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opps, thanks guys... yes a upc number and a barcode of the upc is required for scanning.
3:51 am on July 14, 2012 (gmt 0)

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Yes these stories about Amazon put me off selling on there.
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