How Inexpensive Products Fetch High on Amazon – Economy – UK Parents Lounge

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The bike bag with the chic F is a bestseller on Amazon. It has several hundred ratings, an average of 4.5 out of five stars, and a double pack would cost close to $ 80. The brand on the bag in capital letters: Forrider. Besides classics like Vaude, it sounds unfamiliar at first. But the brand has a business site on Amazon that looks like a vibrant startup with a lot of DIY enthusiasm. It is advertised with slogans such as “We build bike bags with passion”.

The story is right, the price too. But what Amazon customers shouldn’t have suspected: the bag doesn’t come from a start-up with domestic production, it’s a product made in China. There, NDR and Süddeutsche Zeitung bought the same bag for a few euros on Alibaba’s online portal. The start-up is therefore less of a think tank than a simple retailer that produces in China – and then ships the bag around the world via Amazon.

Forrider is one of the thousands of brands that people in this country can currently purchase through the Amazon Marketplace and find it difficult to see what they have actually delivered to their homes. Unlike Amazon’s own products, third-party retailers sell millions of products in what is called the Marketplace, the quality or safety of which has little influence on Amazon due to the sheer volume. It can be annoying and not transparent to consumers, and in the worst case even dangerous, as former retailers as well as experts and consumer advocates warn. Amazon, on the other hand, considers the responsibility to lie with the retailers, not the group. But is it that simple?

63% of turnover from exchanges with the marketplace

Amazon is making a lot of money with its marketplace. The Cologne Institute for Retail Research (IFH) estimates that the group generates around 63% of its retail sales in this country. According to Amazon, there are 40,000 German retailers alone, plus hundreds of thousands from abroad who also sell their products in Germany. Amazon collects a commission from each of them, and thanks to FBA, it earns way over 20,000 German retailers.

The English abbreviation FBA stands for Fulfillment by Amazon. This is the lever that ensures that more and more pseudo-brands are introduced in Germany by more and more companies. There are over 1,000 bike panniers on Amazon alone, while there were maybe three to five at the local bike store.

In practice, Fulfillment by Amazon means that a retailer sends their goods to Amazon. The American group then takes care of logistics, storage, shipping to the customer, returns and, in some cases, customer service. It is estimated that he charges up to 50 percent of the sale price for it. The retailer’s only job is somehow to get the merchandise to Amazon, come up with a brand and story, and then put the product in the spotlight as best it can. These FBA brands have seen such hype in recent years that other companies have started buying the brands for sometimes millions of dollars and continue to exploit them.

Hardly anyone in Germany knows what FBA means in practice better than Nicklas Spelmeyer, managing director of Berlin-based

Read more from the original source:
How Inexpensive Products Fetch High on Amazon – Economy – UK Parents Lounge

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