Amazon - cheepest and best place to buy?
I want to discuss a disturbing topic: have you also noticed that amazon is often cheeper than the companies who made the product? How ist that possible?
An example: Breville Juicer
- Breville Price: $149.99
- Amazon Price: $135.01 instead of the List Price above
More and more to me this smells not like competition but like monopoly dictation. So as an affiliate I'm in an awkward situation. I'd rather recommend the original company but in the end the price decides.
What do you think? Is there a good reason to refer to the original and more expensive provider? Or are we doomed to attach ourselves to amazon?
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I would agree with The old silly it is like most service providers you can go to their agents and get better deals because of the volume they sell , same as big supermarkets either way the manufacturer and supplier make good profits mostly
It has to do with volume. Amazon buys such massive volume from the suppliers/producers of products, that they get massive price cuts - wholesale purchase that can then be marked up for a profit while still beating the MSRP.
Thanks a lot, this makes sense. So the company makes most of its revenue from those retail deal, don't they?
Sure they make the highest PERCENTAGE of profit on direct sales of their products. But supplying whole sale to such huge vendors as amazon produces immense revenues as well. In other words, just as an example, making 10% of a million wholesale product sales is usually going to be more money than making 20% of your company's own direct sales. Unless you are a bigger company than your wholesale distributors, that is.
This is not as strange as it seems Firekeeper.
I own a bar. If I buy 1 case of beer from the owning company, I might pay $1.50 a bottle.
If I buy 10 cases, I pay $1,30 a bottle, (discount for bigger order)
My local supermarked chain order 2 million cases, and might pay $0,20 a bottle.....
So of course the supermarked can sell it to the consumer a lot cheaper than I can, or I can buy my beer from the supermarked and sell it cheaper.
I don't think it's a good idea to refer your visitors to the more expensive provider, most people want to pay the lowest price possible, and the owning company will earn more from selling 500 of their product via Amazon where it is cheap, than maybe selling 2 on their own site where it is expencive.
How do you think your visitor will feel if they pay $20 for a product they find on your site, just to be told that their neighbor bought the same product on Amazon for $5 ? Not so happy, maybe?
You can affiliate with the owning company AND Amazon and compare the prices on your site. That way your visitors can make their own choices.
Thanks a lot for this insight!
You're absolutely right, with a comparison my readers can deside themselves.
But as a strategy here on WA does it make sense at all to promote outside of amazon? Of course with licenced products you have to go to the provider. But other than that, it seems to wind up with a monopoly. You think so?
Cheers, STefan
Stefan, I don't think you can call it a monopoly as long as the product is available in more places.
Our startegy is to sell, and human nature will always go for the lowest price as long as the quality is exactly the same......
I tried to avoid Amazon myself, but after using other affiliates for almost a year without much sucsess, I fired them all and went for Amazon 2 weeks ago. Still working on adding their links, but will let you know how it goes.
I have always been shopping from Amazon for my personal stuff, I like the company, I just avoided them because their commision was a bit low. Still think it's better to sell 10 items with love commision than none with high commision :-))
yes you're right. I can follow your arguments, absolutely.
The reason for using the term monopoly comes from my observation I made in a bookstore. They had to close down because they couldn't compete with the low prices of Amazon. I estimated as a customer the great selection, the consulting and the ambiance. this was part of the higher prize.
But in the end, as you said, the price is still the strongest argument. I just regret that some of our culture gets lost.
Take care, Stefan
I totally agree with you.
I see this happens here too, but mostly because the big chains open shop and kill the small businesses and local stores. They can't compete on the price. It's sad.........
But on Amazon, at least the official shops earn money when Amazon sell their product.
You take care too
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Yep, Marvin hit it on the head. It has to do with column and profit margin
thanks Larry! What does column mean? Sorry, I'm not native in English ;-)
whoops, that should have been volume and profit margin. Sorry.
Now I get it!