Everyone thinks they can all a make a decent profit by setting up an online account with the likes of Amazon or an equivalent platform. The reality is it may be great for the first 12 or even 24 months but at some point if it is not your own product you will be pushed aside.
How it works when you register is you have to provide all information about the products you sell including if you are the manufacturer or own the rights to the brand. If the answer is yes to these questions you are in the clear and they cannot rug pull your product by using the same factory undercutting your prices.
This is how they work and why these online platform businesses have grown so quickly. They have all the information about your not so unique product combined with all the other sellers who are selling that exact same product knowing the average monthly sales. With all this information plus having the factory details they then buy the product direct themselves cutting you out altogether.
This my not seem very ethical, but this at the end of the day is business and what fuels their rapid growth. Online selling accounts that thought they were on to a good thing have found out the hard way and the better their sales the quicker this happens to them.
Our online company with Amazon looks as though it will be ready really soon as the catalogue is still being loaded. Amazon South Africa have delayed their launch from February to an expected start date somewhere in June.
Our company is Factory Direct Online and is exactly what it says dealing direct with manufacturers giving them an avenue online. The agreement with the manufacturers is we share the profits meaning this is direct and no middleman involved which also cuts out the threat of Amazon trying to deal direct later on. When asked if you manufacture the product the answer is yes.
Takealot which has been the front runner online sales platform before Amazon is doing what all the other online platforms do and is stealing the suppliers away from their own online customers who have payed a fee in order to sell. When you put it this way it sounds terrible and it is not exactly fair business.
This was one of the reasons why I went the way I did with our online retail company because selling anything is easy, but you won't be able to keep it. The only way is to buy the brand/license required to sell those products or manufacture directly yourself or do an agreement with the manufacturer selling on their behalf. If you don't do this you do run a high risk of being undercut by the very people who you are paying to use their platform.
This is how the likes of Amazon grew so fast because others actually built the sales for them and then they cut them out taking the profit for themselves. It is actually very smart because having the figures of combined sales they can negotiate much cheaper prices due to the volume. No one could compete as an individual against these tactics.
Unfortunately people are very naïve and the same thing will repeat itself in South Africa. These individual sellers are adding to the likes of Amazon's database of products supplying them with all the information that will eventually see them cut out the loop.
Posted Using InLeo Alpha
Yes sir, that's the way it works with Amazon. You're arrangement should work nicely though, cut that middle man and gives you some great pricing. I don't like selling through Amazon here in the US, it's just gotten to expensive.
I sell quite a lot of MTG cards on TCGplayer.com, and it is an exhausting enterprise. Now that they have been bought out by Ebay, I am biting my fingernails in hopes that they don't screw up what was becoming a good thing.
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