Dum Dums Lollipops Drop-Shipping Hustle on Amazon Costs Spangler Candy Millions
bloomberg.com
bloomberg.com
But earlier: > Amazon spokesperson Nathan Strauss said the company has long banned sellers from shipping products from other retailers to customers. “We monitor a variety of data and signals to detect, investigate and enforce violations of this policy,” Strauss said.
Uh huh. I'm sure you put your best interns on that, while you have a massive computing infrastructure running ML models to optimize traffic and profits. Amazon does not care about individual retailers surviving, because they win either way.
In this scheme it seems they provide product to certain retailers for cheaper and drop shippers use this to arbitrage a profit. Are they providing products to these stores for less than it cost to make them?
The solution to me seems to be to raise the price on these retailers...
And if they are giving a discount to Sam's Club, they can solve problem by ending that discount.
The problem is the Amazon drop-ship hustle is generating revenue, from the flow of Dum Dums, which is not reaching Spangler, but arguably should. When a drop-shipper buys from Sam's Club, paying the artificially very low price of that loss leader, but then turns around and sells on Amazon at a tiny bit under Spangler's price on Amazon (the article says $25 vs $26), then people will end up buying on Amazon from the drop-shipper instead of from Spangler.
Spangler points to this and says: look, there's demand on Amazon for our product, and we should be getting the revenue from meeting that demand, but instead some of that demand is being met by drop-shippers making huge profits.
I think you and I may be disagreeing on whether the drop-shippers gain is actually Spangler's loss. I think Spangler has a legit complaint, and that's probably why Amazon says the practice is against the rules (while sucking at enforcement).