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Sat Sept 19 2009 23:14:05

Amazon Basics and the Effect on 3P Online Sellers

By: Ina Steiner

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Amazon launched AmazonBasics on Saturday, a private-label collection of consumer electronic items now available in the U.S. The line currently includes audio video cables and blank DVD media, with additional accessories and other items to be added in the coming months. The company said it had plans to introduce the line on its international sites over the coming months.

The news may worry's third-party (3P) sellers, who've already expressed concern that Amazon has access to their sales data and sourcing information. Now, they must worry that Amazon will make deals directly with manufacturers that will allow them to undercut 3P seller pricing - in any category. Amazon already has private label items in outdoor patio furniture, decor, lighting bedding and utility, bath towels, tabletop, kitchen utensils and knives, indoor furniture, and cutlery, cookware, grilling tools and wine accessories.

In Sunday's editorial, I talk about the blurring of lines in the ecommerce space, as marketplaces, retailers, search engines and ad platforms expand their offerings into each other's territories (link). There are a lot of unanswered questions about the current trends in ecommerce, but one thing is clear: these moves are pushing down prices.

It seems the sellers most at risk are sellers of commodity items. Sellers who can differentiate themselves on something beyond price have the best chance of thriving in today's new ecommerce world.

Comments (5) | Permalink

Readers Comments

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by: John (ColderICE)

Sat Sep 19 23:52:56 2009

The times are changing and changing fast. The economy has all players looking for more channels and more revenue. The flood gates are open and opportunity is being romanced.

The larger eTailers are testing the waters to see if what we have is really "that good". There are untold MILLIONS of people on the internet, BUT there are million more who are NOT.

So there is a two edged sword going on as big box stores move after online ventures. They may bring more buyer to our world. At the same time, the big boys are going to look for easy picks and many of the folks that have easy pic product are going to need to find a new angle.

Boy, it is an Amazing time of change. Brace yourself cause tomorrow will NEVER look like yesterday again. That is how I am feeling and I am both nervous and anticipating the changes at the same damn time...odd

john (ColderICE)
lets meet on

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by: vince jelenic

Sun Sep 20 00:24:54 2009

not much new here.

Years ago, many years ago, I was involved in one of the first antiques "cooperatives" back in Italy. I declined, but the various vendors set up their wares and cooperated for awhile. Deepest pockets won out and slowly took over the store. Goodbye coop, hello big boy.

In more recent times, every "coop" or antiques "mall" i've see where the owner had a hand in actual sales of THEIR OWN items, the same has befallen. I have seen malls go from 120 dealers to become 80% owner dominated in 5 years.

It's a simple rule of economics. The owner of a venue, if involved in same biz as their tenants, will always buy out their tenant's space.  This, of course, after the tenants have built up the traffic and business. If you know your business, you make more money by selling the goods than renting out space -- that's the essence of retail, online or off.

The simple economics indicate that IF a tenant can afford the rent AND make a profit, the owner can easily take the entire bundle instead.

One of the few redeeming features I see on eBay is that it is not DIRECTLY involved in sales of it's own products as a main businesss model.  As a "venue" it is not a direct competitor to it's tenants.  

The best landlords stay in the business of being landlords and LIKE to have tenants. I don't believe Amazon is acting as a good landlord, nor a good "mall manager" now, or in the past.

3rd party sellers should concentrate on becoming FirstParty sellers on their own platforms  
I approach it this way.

"I have a CSV inventory file- and I place it with the best offer".  If the venue modifies, I just dump my CSV file into another venue.

Call it the Wandering Seller syndrome. Venues who accept CSV imports are ahead of the game (like google, bonanzle, ebay), but they have to work hard to KEEP the seller online.  

The game is changing in that we are becoming more portable.  It's becoming a SELLER's market again.

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by: Chance Stevens

Sun Sep 20 16:46:39 2009

It's only a matter of time before Amazon launches into more than just cables.  Of course they aren't going to put all of their cards on the table but companies like Best Buy aren't filling their aisles with less product.  They're adding more products and accessories under their own product names.  They get more margin, and their customers are none the wiser.

I actually wrote about it on my site HDTVBeat -

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This user has validated their user name. by: Ming the Merciless

Mon Sep 21 18:01:27 2009

Amazon is simply behaving like ebay would if they bought, warehoused, and sold product.

IMO, commodity sellers would be wise to look at other channels because Amazon will soon be competing with you and beating your prices.

Amazon is just another corporate PacMan greed machine that will gobble up commodity sellers and spit them out under the bus just as ebay has and will continue to do.

Amazon doesn't care about its 3P sellers anymore than ebay does. 3P sellers are simply a means to an end. And now Amazon has all the information 3P sellers gave them,and they'll use that information to put you out of business.

3P sellers should unionize.

DEATH to ALL corporate greed machines.

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by: Clayton

Tue Sep 22 21:35:18 2009

Good.  3P businesses of these kinds of product are an economic inefficiency.  These are non-unique items, and the lower the price, the better.

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