that's how competitions work....in your second part, some other people who can make the stuff cheaper will just come onto amazon's platform, preventing the price from going up.
If you're looking from a supplier side, yeah this business is bleak. But keep in mind someone will always accept a lower margin, run the same business more efficiently, or can produce your goods at a lower cost.
Just because you guys can't stay in the game, doesn't mean the game is broken. You got beat by open competition.
There's definitely something to be said about economies of scale and efficiency.
But I'm talking about design and product expertise. People sourcing knockoffs can create a cheaper version 1 of a product, but only a brand connected to it's customers will use their feedback for version 2, 3, 4, n+1.
I'm a little insulated in the food niche because product quality and freshness and expiry dates are huge risk factors, but this applies to other industries as well.
You can buy a knock-off Amazon branded chain lubricant from China that lists the same ingredients if you want, and it may work well in low impact situations. But for my motorcycle, you bet your ass I'm spend 2-3x the lowest price I can find on Amazon for a well known brand with a reputation and uses quality inputs and filters and has no additives. When my health is on the line, brand expertise is essential.
Same with food. There's a floor for quality, and you can't escape the value trade-off. Something being cheaper doesn't mean it's quality is unaffected, but the short-term, inexperienced people at Amazon don't care about that.
I can buy and sell our "product" at half price by buying last year's crop or a lower grade, and I can sell that garbage exclusively through Amazon and "win" the completion, but nobody really wins in that case - me or the customer or our competitors - only Amazon.
If you're looking from a supplier side, yeah this business is bleak. But keep in mind someone will always accept a lower margin, run the same business more efficiently, or can produce your goods at a lower cost.
Just because you guys can't stay in the game, doesn't mean the game is broken. You got beat by open competition.