This video addresses the complexities of pricing in Amazon wholesale and distribution networks. A user on a seller forum expressed concerns about the challenge of competing with sellers offering products at prices just above wholesale cost, making it hard to turn a profit. The issue is attributed to the distribution structure, where larger volume buyers receive deeper discounts, allowing them to undercut smaller wholesalers. Distributors often operate their own Amazon accounts, further driving prices down.
The discussion also touches on parallel trading, where distributors in other countries purchase products at discounted rates for export but leave them for sale in the U.S. at lower prices, disrupting local markets. These practices create a "gray area" in the distribution chain, making it difficult for smaller sellers to compete.
The video emphasizes that while competition benefits consumers through lower prices, it leaves smaller wholesalers vulnerable to market dynamics they cannot control, such as volume-based pricing advantages and gray market practices like parallel trading.
For more details, check out the full video below!
The discussion also touches on parallel trading, where distributors in other countries purchase products at discounted rates for export but leave them for sale in the U.S. at lower prices, disrupting local markets. These practices create a "gray area" in the distribution chain, making it difficult for smaller sellers to compete.
The video emphasizes that while competition benefits consumers through lower prices, it leaves smaller wholesalers vulnerable to market dynamics they cannot control, such as volume-based pricing advantages and gray market practices like parallel trading.
For more details, check out the full video below!