Unlike a traditional retailer, Amazon isn’t competing on the brands and sellers it can court; they dictate a seller’s strategy. No matter how much Amazon makes sellers squirm, they’re not taking their business elsewhere, at least not as long as they’re still profiting through the marketplace. Amazon takes 15 percent commission for third-party sales, but that climbs to 30 percent if orders are shipped through the Fulfilled by Amazon program. The best bet, in fact, is to take a leap of faith and invest more.
“Every year, Amazon introduces changes that shift work onto the sellers’ shoulders. As a third-party seller, you always have to be thinking one step ahead: What do these changes mean to me? How do I compete?” said Fred Killingsworth, founder of the Amazon consultancy Hinge and a former business development manager at Amazon. Those changes include a potential “One Vendor” marketplace that would remove the option to choose between wholesale and third-party. “You have to think around these things knowing how Amazon communicates and that a small change can derail or boost a business with hundreds of millions of dollars flowing through.”
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