Tuesday, December 10, 2013

amazon

Amazon is a fierce price competitor. It's awesome. It's a mighty engine of consumer surplus.

So it's a little weird that they keep squeezing resellers. When I first started reselling books on amazon, they took a fixed 15% cut and I made a ton of money, even on books that sold for 1 cent, because the shipping charges were a bit higher than the actual cost. Now amazon takes a much higher, increasing percentage, and also digs into the shipping charges. I haven't posted a book on there in several years because it's never worth the hassle.

So I was surprised to discover recently that half.com still only takes a 15% commission, and has the same shipping charges as amazon. In the last couple months I've already sold a dozen books on there for plenty of cash.

Why is amazon ruthless about cutting its profits in order to gain market share in every other domain except reselling?

2 comments:

  1. Probably because amazon has determined there's not enough money in it for them otherwise, or?

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    1. I wonder if it's really about the margin or if they have a longer term plan for their 3rd party reselling business... it's strange that half.com could make money doing that but not amazon, and it's strange that they ruthlessly cut their margins in every other dimension but keep increasing them in this one.

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