Amazon(.com)

[Rustyhole]

They're not going to order it at the same price they're selling it to you

I understand that

As @Zenith said, you generally accept that they're the middleman between you and a bulk supplier.

I get that too.

But if a smaller shop sells said book for $20 - cover price - what's the selling price from a standard publisher. Maybe $15 or so? But if they were to buy from the big online retailer at $12 including having it sent to their store. Why use the standard supplier/publisher? Does it make business sense? Either they don't pass the savings to me as I think the book costs $20 and make more profit or they pass some or all of the savings to me making me a happy customer who may use them again.

Either way, it seems the old model of supplier-shop-customer is outdated as large online presences like Amazon and Chapters have fuzed the supplier-shop into one entity.

 

[Liquid]

I like Amazon, it's fabulous at what it does.

However, I do enjoy actually browsing through shops, something which is on the decline as high streets are becoming ever barer.

A great afternoon for me is going into town and browsing through row after row of CDs DVDs and games; generally browsing through all manner of disc based media. Hard copies are wonderful as well as a digital back-up. Unfortunately, Amazon (and digital downloads) are slowly putting an end to this and it's the inevitable next step in shopping.

Again though, I don't mind Amazon. I find it really great for browsing for niche items.

 

[FoolKiller]

But if a smaller shop sells said book for $20 - cover price - what's the selling price from a standard publisher. Maybe $15 or so? But if they were to buy from the big online retailer at $12 including having it sent to their store. Why use the standard supplier/publisher? Does it make business sense? Either they don't pass the savings to me as I think the book costs $20 and make more profit or they pass some or all of the savings to me making me a happy customer who may use them again.

Either way, it seems the old model of supplier-shop-customer is outdated as large online presences like Amazon and Chapters have fuzed the supplier-shop into one entity.

I think that you are missing the point of wholesale pricing. They buy a box or flat of books from the printer at a certain price and sell it at a MSRP of $20. Amazon will pay a similar price from the printer but they undercut the MSRP because they make it up in volume. Amazon may also get a better wholesale deal because they buy more books, but it won't be large enough to make Amazon cheaper to buy from through their storefront than the wholesaler.

You are suggesting that Amazon would be selling for $3 less than the initial cost of the book. That would be a fast road to bankruptcy. If Amazon was getting a better wholesale price your example would only work if Amazon got something like 25%-30% extra savings, which would mean half the price of the MSRP.


I can only see one way in which your example might work out, that Amazon gets a great deal on digital and audiobook version licenses and the sales of those formats could cover the costs of undercutting the wholesale price of a print copy. But those formats are not quite up to being a large enough percentage to cover it, especially since Audible does provide a subscription model. I get (to own in as much as you can own a digital file on a cloud server) one audiobook a month for my $15 subscription, whether it is a normally priced $35 book or an older $15 book. And that doesn't even account for the "buy a trilogy for the cost of one" or BOGO sales they run regularly. I have a 97 book audio library at Audible.

Keep in mind that audiobooks are more expensive than print when reading those prices. They have additional production costs that can run pretty high.

 

[Joel]

But if a smaller shop sells said book for $20 - cover price - what's the selling price from a standard publisher. Maybe $15 or so? But if they were to buy from the big online retailer at $12 including having it sent to their store. Why use the standard supplier/publisher? Does it make business sense? Either they don't pass the savings to me as I think the book costs $20 and make more profit or they pass some or all of the savings to me making me a happy customer who may use them again.

No, Amazon can't undercut wholesalers. They buy from their own vendors, and then need to make their own margin on it. Off the top of my head the only product they could conceivably sell at a loss is the Kindle, as they'll make money from selling you ebooks later. A book store would pay $10 for each book, incur $4 per book in operating expenses (rent, wages, utilities), and sell 100 of them for $20. Amazon would pay $8 for the book, incur $1 in operating expenses per book, and sell 50,000 of them for $12 each.

You're underestimating markup at brick and mortar stores, and overestimating Amazon's markup. It costs a lot of money to operate a physical book store, and there's a high markup on what they sell to cover that. On a per book basis Amazon's costs will be much lower, so they can afford to sell for a lower price. In addition, Amazon sells millions of books per year. Shipping companies and book wholesalers will be bending over backwards to give Amazon the best price they can because it can mean hundreds of millions of dollars in sales going through their company.

That's what passing on the savings is about, Amazon operates very efficiently and gets big volume discounts. Those savings get passed on to you, and they can afford sell the book at a lower price. A book store can only come down in price so much because they will never be able to compete with Amazon's cost per unit.

 

[Rustyhole]

The above two posts were great but didnt really address the specific issue I was getting at which is...

If I, as a little shop owner, have to order a book in for a customer from my supplier which only gives me X profit after expenses and can find it cheaper through Amazon or a big online book retailer... why wouldn't I get it there instead of normal channels?

 

[Liquid]

If it's more profitable for you, as a business owner / proprietor, to use Amazon, what's the problem?

 

[Joel]

The above two posts were great but didnt really address the specific issue I was getting at which is...

If I, as a little shop owner, have to order a book in for a customer from my supplier which only gives me X profit after expenses and can find it cheaper through Amazon or a big online book retailer... why wouldn't I get it there instead of normal channels?

If you can find it cheaper from Amazon, there's nothing wrong with ordering from there. The point is that in 99% of cases you won't find it cheaper from Amazon than a wholesaler. The normal channels arose because they're the most efficient ways for a brick and mortar store to do business. If Amazon becomes the more efficient way, the market adapts and inefficient processes are no longer used.

The reason I didn't address that point for the majority of my post is because it's not realistic. It would be rare that any retailer would get better prices from Amazon than a wholesaler. Wholesalers need to turn a profit, and then Amazon needs to turn a profit. It's unlikely that after two middlemen have added markup you'll be able to buy it and add your own markup as a third middleman while still competing on price.

If a book is $15 from a distributor and $12 from Amazon, then absolutely order it from Amazon. However, those opportunities will be rare.

 

[FoolKiller]

If a book is $15 from a distributor and $12 from Amazon, then absolutely order it from Amazon. However, those opportunities will be rare.

It won't be rare. It won't happen. One publisher sells the books. They won't make it so cheap for Amazon that Amazon can undercut their sales to other stores.

But if it ever did happen, the store owner should do it. The point of buying local or at brick and mortar is convenience or to support those jobs and/or businesses. As a customer it shouldn't bother you that the store owner found an even better way to keep their business going without reducing man hours. Considering how many store are shutting down, if you enjoy the store experience then the store owner finding better savings is actually a win/win/win. Amazon gets paid, the store maintains sustainable profits, and the customer still has that familiar old bookstore to go to.

 

[Shaun]

OK my total inexperience with Amazon will have to be taken into account here.
Am I on the right track by believing that it's basically a large electronic market place for various sellers in a similar-ish vein to eBay and the likes, but without the auction aspect?

This thread sparked my interest so I performed a quick search on Amazon for some goods that I always keep an eye out for.
Hmm do they have a policy for selling counterfeit goods because it's riddled with them.

Edit: Found this, lip service it seems.

 

[KSaiyu]

You are suggesting that Amazon would be selling for $3 less than the initial cost of the book. That would be a fast road to bankruptcy. If Amazon was getting a better wholesale price your example would only work if Amazon got something like 25%-30% extra savings, which would mean half the price of the MSRP.

It's not as crazy as it sounds

 

[FoolKiller]

OK my total inexperience with Amazon will have to be taken into account here.
Am I on the right track by believing that it's basically a large electronic market place for various sellers in a similar-ish vein to eBay and the likes, but without the auction aspect?

Yes and no. They also have warehouses full of items that you buy from them. I tend to stick to sold and shipped from Amazon stuff if it is available.

This thread sparked my interest so I performed a quick search on Amazon for some goods that I always keep an eye out for.
Hmm do they have a policy for selling counterfeit goods because it's riddled with them.

Edit: Found this, lip service it seems.

It has been my experience that they takedown or replace items that have a large amount of complaints for being knockoffs. But the AU and US stores likely differ.

 

[BobK]

OK my total inexperience with Amazon will have to be taken into account here.
Am I on the right track by believing that it's basically a large electronic market place for various sellers in a similar-ish vein to eBay and the likes, but without the auction aspect?

No, not really. While Amazon does sell a fair amount of items on behalf of third party vendors, the majority of their merchandise comes from their own warehouses (or digital equivalent, in the case of ebooks, mp3's, etc). Or at least that's how it appears in the areas I purchase from Amazon.

Although, browsing my recent orders, it appears that the percentage of stuff I've bought from third party vendors via Amazon seems to have been increasing.

 

[Joel]

It won't be rare. It won't happen. One publisher sells the books. They won't make it so cheap for Amazon that Amazon can undercut their sales to other stores.

Yeah that makes sense. I was thinking that there would be another distributor in between, that publishers would sell to different wholesalers who then sell to retailers. I was thinking that if that were the case there would be the odd time where Amazon got a substantial discount from a wholesaler on a certain book and a book store wouldn't get it for the same price.

 

[TenEightyOne]

OK my total inexperience with Amazon will have to be taken into account here.
Am I on the right track by believing that it's basically a large electronic market place for various sellers in a similar-ish vein to eBay and the likes, but without the auction aspect?

This thread sparked my interest so I performed a quick search on Amazon for some goods that I always keep an eye out for.
Hmm do they have a policy for selling counterfeit goods because it's riddled with them.

Edit: Found this, lip service it seems.

Not really. I think you're reading your own expectations into it based on the title of the policy. Read what the policy says and find examples where you can show Amazon broke it.

On the main topic, I was in a meeting the other day looking at mobile print factories that various companies use to produce on-site documentation for large projects (rather than ship certs and manuals around the world). The quality and output is amazing and many documents come in a form just like a paperback. That's cheaper, lighter and easier to store than the traditional ring-bound folder that some of you are no doubt familiar with.

That made me think of this worthy thread... what's to stop Amazon having such devices in strategic locations and printing the books on demand before putting them into local delivery networks? Nothing, I'd say. I'm sure that possibility won't have been lost on them as it would slice another layer off their overheads.

 

[FoolKiller]

That made me think of this worthy thread... what's to stop Amazon having such devices in strategic locations and printing the books on demand before putting them into local delivery networks?

Copyright laws. Now if the publishers do that I wouldn't be surprised.

Since Amazon sales are used for NYTimes best seller list reporting it would be obvious if they sell more books than they paid for.

 

[TenEightyOne]

Copyright laws. Now if the publishers do that I wouldn't be surprised.

Since Amazon sales are used for NYTimes best seller list reporting it would be obvious if they sell more books than they paid for.

I actually meant as a licensed producer, I should have made that more clear, sorry

The impact on existing titles would initially be low but if Amazon use their weight to make the licensing attractive to publishing houses then they'd soon get them on board.

The more I think about it the more I think this is the future in some shape or form.

If they undertook it as an unlicensed operation (I know they wouldn't, obviously) then they'd hardly be likely to report the figures. I think there's a "cooking the books" joke in there but it's 4:30am here so... yeah.

 

[Shaun]

Not really. I think you're reading your own expectations into it based on the title of the policy.

Quite possibly, I'm sure my idea of counterfeit in comparison of a lawyer is quite different.
I'm a pretty simple guy and my idea on counterfeit goods is something that is manufactured/copied from the genuine item without the consent of the original manufacturer/designer. Hence cutting out the design, engineering costs etc etc.

Amazon says:

Amazon Anti-Counterfeiting Policy
Customers trust that they can always buy with confidence on Amazon.com. Products offered for sale on Amazon.com must be authentic. The sale of counterfeit products, including any products that have been illegally replicated, reproduced, or manufactured, is strictly prohibited.

We take product authenticity very seriously. It is each seller’s responsibility to source and sell only authentic products. If you sell counterfeit goods, we may immediately suspend or terminate your selling privileges and destroy inventory in our fulfillment centers without reimbursement. In addition, if we determine that a seller account has been used to engage in fraud or other illegal activity, remittances and payments may be withheld or forfeited. The sale of counterfeit goods can also lead to legal action by rights holders and civil and criminal penalties.

We are constantly innovating on behalf of our customers and working with manufacturers, content owners, vendors, and sellers to improve the ways we detect and prevent counterfeit products from reaching our marketplace. We work hard on this issue every day because we know that our customers trust that they are buying authentic products when they shop on Amazon.com. This is why we stand behind the products sold on our site with our A-to-z Guarantee. We also encourage anyone who has a product authenticity concern to notify us, and we will investigate it thoroughly and take any appropriate actions.

I've underlined the part which I consider pretty important in that, I'll assume that because Amazon already bold it that they consider it important also.
One thing though, I'd imagine that lawyers could argue over the world authentic for weeks on end.

Enlighten me.

Read what the policy says and find examples where you can show Amazon broke it.

Hmm, not sure if you're asking for an example or not but here goes anyway.
This on Amazon is an obvious fake.
First thing to set the alarm bells ringing is the massive discrepancy in price, apart from that Rapha products are only available from themselves and a select number of other retailers of which Amazon isn't one.
Genuine articles are here and here.
If that isn't a blatant rip-off I don't know what is.
Sure it doesn't say Rapha in the product description but it is printed on the jersey and bibs. Can't imagine Team Sky being too impressed with it either.

@FoolKiller, @BobK thankyou both for the input. 👍

 

[TenEightyOne]

@Shaun you still miss Amazon's get out.

They concur with your interpretation (and mine, and most people's) of counterfeit goods. You need to look at the process they use to recognise-and-remove a particular item-for-sale, that's where they (along with many other companies) exploit the wriggle-room

 

[JMoney]

I really don't care about Amazon's sneaky business deals. I usually don't use the site much, but when I do I'm using it to save money and the trouble of going to stores to buy things. I've had much more trouble with eBay and there's no campaign against it.

And by the way, Stephen Colbert isn't funny and reading Harry Potter was a waste of my life.

 

[Venny_]

Great site. One-day shipping is faster than a Bugatti.