Amazon Doesn't Want To Compete With You
This week, an article in Bloomberg about how "Amazon Is Poised to Unleash a Long-Feared Purge of Small Suppliers" caused a lot of confusion and concern among Amazon small business owners. Amazon denied the claims in the Bloomberg article but they make sense.
Amazon currently purchases some product directly from brands and manufacturers and sells those products themselves. In many of these situations, Amazon competes for sales with third-party Amazon re-sellers like ALGO business owners.
So, if Amazon were to "purge small suppliers" it would be a very good thing for Amazon re-sellers because there would be less competition from Amazon on product listings!
From Amazon's perspective, a supplier purge would make a lot of sense. Rather than buying millions of dollars from suppliers to sell itself, Amazon can shift risk and inventory costs to brands, suppliers, and 3rd party sellers. Amazon then makes money by collecting selling fees. This is how 58% of the sales on Amazon happened last year and Amazon seems to want more sales to happen that way.
According to some experts; "More Than Ever, Amazon Seems To Be Saying It Is No Longer A Retailer." Instead, Amazon is a platform for retailers (like those following the ALGO strategy) to sell products.
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