I hate selling on Amazon. Hate it. Ebay fees are 11%, Amazon fees are 40-50%. I've seen a seller almost cry watching amazon take over $140 in fees out of a $300 transaction. And ruetinely take 50% of gross receipts. Yes this is normal. I read the email customer service sent back about it. Sellers have started canceling large transactions and directing their buyers to the same product listing on etsy, ebay, or their own store. Don't get me started on the inability to control shipping rates like every other marketplace. Amazon is the dinosaur of online shopping.
And the biggest insult is Amazon saying they make so little profit. Where is all this money going?
> Amazon fees are 40-50%. I've seen a seller almost cry watching amazon take over $140 in fees out of a $300 transaction
That's a little exaggerated. My company sells a lot of stuff on Amazon... for a Pro Merchant account ($40 a month and gets you no per-item listing fees), Amazon commission rates are based on which selling category you list your items in... they range from 10% - 30% generally, but do fluctuate from time to time. For any items on Amazon that is listed at or less than $6 there is a minimum commission rate of $1 or $2 depending on the category (the reason most cheaper items have disappeared from amazon lately).
Regardless, you have to bake the Amazon commission rate into your sale price, otherwise you will lose money.
It's often considered an "insider secret" that almost everything listed on Amazon is more expensive than if you just did a search for the seller's actual website. Few people do this, and a lot of people just assume Amazon is cheaper always (which is absurdly false).
The pricing formula is often:
product cost * 2 == your normal markup for selling on your website
So, say you acquire a product for $10. Your website will probably list it for $20 retail price. On Amazon (assuming a 20% commission rate) you will likely list it for $25 (10 * 2 / .80 = $25)
Amazon then takes their 20% commission cut ($5 in this case), which leaves you back at your original target retail price, $20.
>It's often considered an "insider secret" that almost everything listed on Amazon is more expensive than if you just did a search for the seller's actual website. //
See, I'd assumed that, but at least in the UK the things I've looked at buying on Amazon have been equitably priced and sometimes cheaper on Amazon that on the sellers own sites. Didn't Amazon get in trouble for having a contract term that requires that they be able to sell at the low price offered to anyone else .. or did I dream that.
Once you factor in postage and having to make a new account Amazon has worked out cheaper for me [versus sellers own site] each time I've looked.
> requires that they be able to sell at the low price offered to anyone else .. or did I dream that.
That's very false, at least for regular products on Amazon, ebooks and books have special rules and maybe that's what you recall...
You can list your products at any price you want. Browse to any product that has the "More from $xx" button below the main listing, it will take you to a list of all sellers listing that same product
(matched usually by UPC or similar, but can also just be hand selected when the listing is being created, however usually only small-time sellers bother with that since it's very difficult to manage a catalog of 20K+ products and handle each one by hand)
Each will list it at different prices. Some sellers even list the same item multiple times at different prices. There's no perfect strategy, but obviously they think it benefits them somehow.
> Once you factor in postage
Well, it seems you are overseas and not in the US, so shopping on amazon.com is probably not going to save you a lot because your shipping fees will be much more significant than most people buying domestic. Have you tried shopping on amazon.co.uk? These should be mostly domestic sellers (if you are in fact from the UK). There's also a Japan amazon and a few others.
> and having to make a new account Amazon has worked out cheaper for me
Making an account is free on almost all (sane) ecommerce websites. So this is just a laziness thing (no really it is, I'm not being smart with you, we go through great pains to make account creation as simple and easy as can be since it often does turn away customers). I do agree that having a common account is nice and simpler... which is why a lot of ecommerce websites now allow you to checkout with an amazon account (well, maybe not anymore?), Facebook account (to grab you name, email, address, etc), google account, etc.
> Any examples you can give?
There's loads. Some categories and really really big sellers (think Target/Walmart sized sellers) get special deals/treatments on Amazon and are called "Platinum Sellers". The electronics items generally will be round-about what you will pay on newegg.com or similar, but in my experience newegg.com will be a few bucks cheaper and/or have more selection that is easier to browse.
Another dirty little secret is the Buy Box (what the "Add to Cart" button on the main product page is called) is not always the cheapest offer for an item. You often have to click the "More from $xx" link to see all offers and find the cheapest one. The Buy Box is awarded based on a convoluted algorithm that weighs a lot of factors including feedback ratings, email message response times, number of feedbacks in the past 12 months (it's average to have about 4%-8% of sales leave feedback), on time shipments, on time deliveries, etc etc etc... They all add up and allow some sellers to list an item at a higher price than others, but still get awarded the Buy Box.
>> requires that they be able to sell at the low price offered to anyone else .. or did I dream that.
> That's very false, at least for regular products on Amazon, ebooks and books have special rules and maybe that's what you recall...
As per Amazon's guidelines: "General Pricing Rule: By our General Pricing rule, you must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer and/or sell the item via any other online sales channel."
> Business practices, such as any reduction or elimination of shipping charges on an order, or of any other order-related fees and expenses
"Other order-related fees and expenses" is what would be considered the Amazon commission.
This isn't something worth debating... it's a fact that most things on Amazon are more expensive than if you found the seller's own website... I've been doing this for a long time. You are free to throw your money away based on some sense of "trust" you feel at Amazon.
Do some due diligence the next time you go to make a purchase on Amazon; I'd say 9 times out of 10, you will find a better deal elsewhere.
As a consumer, I'm aware that Amazon is often more expensive. It's often less expensive as well. It varies wildly based on product, merchant, category, etc. But I never debated any of that nor made any claims along those lines. I simply quoted Amazon's own Terms for merchants. Merchants are required to make the lowest price available in their Amazon listings and can have their product or account pulled if they do not. As a consumer (or competitor), feel free to report any merchants who refuse to comply. As a merchant myself, these terms are actually the reason we don't sell on Amazon at all at present.
Like I pointed out, that policy clearly allows you to "bake in" the commission rate.
Nobody would sell on Amazon if they had to sell it at the same price as their own website but take an additional 10%-30% loss (sometimes that 30% is the entire margin on a sale). This isn't "App Store" sales where the cost of the product can be fudged a bit... these are physical products that have a fixed cost of acquisition plus a lot of overhead (manpower, stock space, packaging, etc).
Majority of people who shop on Amazon do not price shop. They either feel everything is cheaper always (I hear this from friends and family all the time even though it's provable otherwise), or they feel some sort of "trust" with the website (not understanding majority of products sold on Amazon are from 3rd party sellers).
Amazon's products sold by Amazon are often cheaper than found elsewhere in my experience, usually due to them being willing to lose a lot of money on a particular product line to either gain long-term market-share or bolster some tertiary service of theirs.
3rd party sellers cannot compete with someone who is literally willing to lose millions of dollars for several years at a time just to snuff out a market.
When it comes to 3rd party sellers vs. 3rd party sellers, it's a more even playing field, but you will more often find the product listed on their site for cheaper since they are baking in the commission rate.
re: geography. Yes, I meant considering the parallel situation in the UK with Amazon.co.uk.
re: making accounts, it takes time; if pricing is comparable then using your established account is usually quicker. Yes that's "laziness" if you like; I prefer to consider it consideration of the value of time.
However SparkFun, which aren't even in the list - despite it saying "by sparkfun" in the product header [what's with that?] do sell that item at a lower price from their own website. Digi, the manufacturers, don't appear to sell it at all.
With your jewelrydisplaysandboxes.com I tried ordering 4 from their website and the subtotal with shipping (to mainland USA) + taxes comes to $10.77. That's more than the vastly inflated Amazon price!
//
I never said you couldn't find things cheaper elsewhere, just that IME the _sellers_ external price was pretty close to the Amazon price for things I'd looked at buying. We're one-all on your examples. I suspect niche products probably have more Amazon markup?
Looking at top sellers in Home & Kitchen (http://www.amazon.com/gp/bestsellers/home-garden) for example NutriBullet sells at $69.99 whilst it's 6 x $19.99 + $39.50 on their own website ... that's probably a special case. The top 2 items in that dept. weren't available via the sellers own site.
Even "sunk" or "disappeared" money must end up somewhere. In Amazon's case, they have a shitload of investment costs (warehouse/datacenter building and staffing, both need massive upfront investment and take quite a time to go black) and costs for failed/under research-projects like the Fire Phone.
The reason is right there in the footnote: the user only charges a penny for the items. The user is doing a hacky trick, and firing off a higher percentage take by amazon.
Bullshit. Look up their fees, they're nowhere near that much. You're making shit up.
> I've seen a seller almost cry watching amazon take over $140 in fees out of a $300 transaction.
If a loss of $140 is making him cry, I strongly recommend you encourage him to meet with a personal financial advisor, or have him seek the mental health resources he needs. No person of sound mind/finances should be broken by a loss of a few hundred bucks.
> And ruetinely take 50% of gross receipts. Yes this is normal.
Again, you're fabricating data.
> Sellers have started canceling large transactions and directing their buyers to the same product listing on etsy, ebay, or their own store.
I've bought and sold hundreds of items via Amazon used items and have never experienced this. You can't sell handmade items from Etsy on Amazon either. (Etsy is for handmade items only)
> Don't get me started on the inability to control shipping rates like every other marketplace.
The only valid complaint, though it actually works out well when you're buying.
And the biggest insult is Amazon saying they make so little profit. Where is all this money going?