Amazon’s “Vendor Central” or “Seller Central”
At yesterday’s meeting of The Presidents Forum, Angela Liu, President, Crispy Green Inc told us she does a sizable amount of her business through Amazon. Liu related that Amazon no longer wants to compete in pricing. She told us this new pricing strategy will surely open doors for other online retailers to go after the bargain hunters. But for those customers who just want to get their purchases fast and no hassles, Amazon still has a huge advantage because of its distribution network and infrastructure. Liu believes that Amazon is shifting more towards the Alibaba model, which will basically be a giant online flea market under the Amazon roof with Amazon taking a cut of every transaction. Amazon is moving from a “Vendor Central” model to a “Seller Central” model, so it won’t have to own inventories of the products it sells. Amazon will provide financial, logistic and other business services under its “Prime”, which is a big draw to a lot of consumers. The Prime membership will then become a main source of profit much like membership fees are to Costco.Frequently, when large companies change their business model, it forces smaller companies who do business with them to also change their model. The overall message from Angela Liu; be prepared for changes.
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