I was impressed
last week when my friend sent me a link to buy the bridesmaid dress for her
wedding and it directed me to Amazon.com. I’ve bought electronics, books and
costumes there, but bridesmaid dress!? I wouldn’t have imagined.
This couldn’t be possible without the third-party
merchants who sell their products on Amazon. In those relationships the website
earn fixed fees, revenue share fees, per-unit activity fees, or some
combination thereof. Therefore, the
amount of compensation that Amazon receives sometimes is partially dependent on
the volume of the other company’s
sales. If he offering is not successful it impacts Amazon negatively.
One of the programs offered to sellers is Fulfilment By Amazon (FBA). With it
they can store their products in Amazon’s fulfillment centers, and they pick,
pack, ship, and provide customer service for these products. Benefiting from
one the best logistics systems in the world sounds like a great deal for sellers!
That’s why the number of them who’re using the service grew more than 65% in 2012-2013.
Besides being
a source of revenue for Amazon, sellers also increase the company’s risks. It
may be subject to product liability claims if people or property are harmed by products they and sellers do not have sufficient protection from such claims. Amazon could also be liable for fraudulent or unlawful activities of sellers. In any case, it’s
worth the risk.
Source:
Amazon.com, Inc., Annual Report 2013.
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