The analogy seems spurious to me. Do brick and mortar retailers charge other brands for being a market-place ? Don't they actually buy products of other brands ?
The analogy seems spurious to me. Do brick and mortar retailers charge other brands for being a market-place ? Don't they actually buy products of other brands ?
Brick and mortar stores are dealers, Amazon is a broker. Dealers have inventories - they purchase items from the suppliers and resell them - if they misjudge demand, they're left off with useless goods. Brokers simply facilitate a transaction between two parties - there's no risk involved. The fact that brokers get to charge a higher mark-up than dealers is just bizarre
Everything is negotiable. If a retailer has more power than a supplier, then the retailer can demand a guaranteed sale clause in the contract, requiring the supplier to take back unsold goods and refund them.
https://www.comcapfactoring.com/blog/walmart-vendor-financin...
They tend to exist only where there is a huge asymmetry in power between retailer (usually large chains) and suppliers.
Anyways, large chains don't deal exclusively in consignment either.
I bet there are clauses in those agreements that state that the retailer should "make my brand of ketchup the first brand that customers see" and that they cater to that clause "for a small fee".
Joe's corner store and Walmart work differently, only one negotiates brand deals.