> What makes Amazon different in this regard?
Safeway/Kroger/Costco do not have direct third-party merchants, do they? They are just resellers. This is fundamentally different from what Amazon is doing.
Safeway/Kroger/Costco do not have direct third-party merchants, do they? They are just resellers. This is fundamentally different from what Amazon is doing.
Stores would pay for the inventory, but we would rebate them for what would not sell as an incentive to make sure we put out products that actually sold.
But I would literally come in every day to the larger stores and put product on the shelf and argue with the manager about inventory and clean up our area.
None of the stores I worked at explicitly sold shelf space (I think), but our corporate worked with their corporate to determine how much space in each store would maximize their revenue. I am sure newcomers would have to do extra to guarantee they would make enough money for the stores to take risks on them.
Needless to say, they had all of our sales data when it came to developing store brands.
Firstly in an analogue ways - managers are always watching were customers are going/ what they are looking at/etc. The security team at a one co-op bragged that their cameras could read the time on your watch.
Secondly, there are all sorts of new tools stores are trying out to automate this. Software that analyzes footage to generate heatmaps. Or using the in-store wifi access points to generate heatmaps (even if you don't connect, your phone will give away your position when looking for networks). This is especially important in mall settings where they need to calculate foot traffic estimates as a way of pricing storefronts.
Esp. since COVID I imagine a lot of people inputting their passwords in front of a camera at the register.
https://www.getblix.com/retail-foot-traffic
https://www.aislelabs.com/products/flow/
https://documentation.meraki.com/MR/Monitoring_and_Reporting...
Agreed ;-). That's why I hang out on HN, hoping to gain some insight and knowledge.
The customer->FBA->merchant relationship is much clearer than in any supermarket I've been in. Maybe I'm really buying from a third party and the supermarket is just acting as the fulfillment center and payment processor, but it is well hidden. I'd love to know more about how the business end works.
They may charge shelf space rent.
The complications come from trying to manage that risk - manufacturers who have better products or marketing can afford to pay for prime shelf space which also means it'll move faster.
We're talking about retail vs Amazon, not retail vs Alibaba reseller #39146527.
Really the modern world allows many optimizations and creative contracts.
It's still not the same as signing up to creating your own store on Amazon though.
No they don't. Standard terms are suppliers get paid 90 days after Walmart takes delivery of the product. You also pay rent from the time a pallet arrives until it is broken down for delivery to stores - so if you deliver too many snow shovels in the middle of summer you might end up owing them money.
There is a whole industry of "supplier financing" that helps smaller players with bridge loans until the product sells.
At least this is how I understand it. I am 100% open to being schooled in how it actually plays out. I'm just a software guy, but I like to learn.
One tl; dr thing is that the supermarkets are a _supplier_ to both end customers and those with products to sell. They supply shelf space and customer reach, in the very literal sense that companies bid for things like endcap placement (the end of the aisle being better than being in the aisle, since everyone making an orbit through, say, the deli section will pass your goods).
I guess it seems a little obvious in retrospect that there must be a bit of that going on, I've long noticed that some suppliers have a lot of responsibility in the store beyond delivering product. Like the beer guy pretty much runs the entire beer aisle. And it's one of the big names supplying all the beer, not just their own.
I've seen similar action in some stores by the soft drink vendors and even the bread vendor. Non-store employees on the floor putting stock directly on the shelf.