You must be aware that Amazon’s marketplace was designed to allow anyone, even brands, to sell on Amazon. Businesses that don’t normally fill orders directly to consumers may be able to manage the operational complexity of FBA with its capabilities. Margin competition between sellers can quickly turn into a race for the bottom when Amazon’s Buy Box algorithm favours lower-priced products over more expensive ones. Before we can learn how to resell stuff at amazon, let’s first get to this – additional info.
Sellers often underestimate the amount they can reduce their prices while still being profitable. Too many sellers need to properly account for all their costs when making pricing decisions.
Amazon’s direct-to-consumer retailers have an advantage over resellers because they can lower retail prices and still be profitable.
Resellers will have a harder time providing clients with true value if they are not able to do so.
1. There are very few resellers that could sell identical products.
2. Resellers must bid higher than their competitors to win the Buy Box.
3. They need to know their total cost structure.
4. The brands that supply them can now compete head-to-head as resellers.
This strategy works best for resellers who have a direct sourcing relationship with their brands, and where the brands agree not to be resellers. As more companies are aware of Amazon’s potential, there is less need for firms to prepare for such a deal.
These changes have caused two major shifts in Amazon’s base of resellers over the past three to four years.
1. To become sole Amazon resellers, sellers must pursue the brands they represent.
2. Resellers can become sole resellers for their brands by creating their own private labels.