If you’re shopping on
Amazon.com and find a
product you’re interested in buying that’s sold through a 3rd party, you have
1. Buy the product directly from Amazon.
2. Head over to the 3rd party’s own ecommerce site to buy the product directly
Which choice is the right choice? As far as I can tell, #1 is the
better way to go. Here is one example of why that is.
other day, I purchased some bike pedals on Amazon for $49.99. They were
listed on Amazon by Bike
Nashbar, so after my order was submitted, Amazon kicked the order over to
Bike Nashbar for fulfillment. Amazon makes a commission on this sale and Bike
Nashbar gains a sale by leveraging the power of Amazon’s brand and audience.
But wouldn’t it be cheaper if I jumped over to Bike Nashbar’s site? No. Here is
what I found:
The pedals on Amazon were $49.99 with $6.75 shipping:
The same pedals on Bike Nashbar were the exact same price, but the shipping was
higher ($7.25 vs. $6.75 when ordered on Amazon):
I’m pretty sure that Amazon’s contractual relationships with companies like Bike
Nashbar forbid the 3rd party sites from undercutting the pricing they submit to
Amazon’s store. While the shipping was higher buying direct, that won’t always
be the case. But that’s not the real cost difference.
The true cost is time, measured three ways.
1. Amazon already has my shipping and billing information on file,
so I save time by not having to register with yet another ecommerce site in
order to make my purchase.
2. With every new site I register with, I can expect another set of marketing
emails to start hitting my inbox.
3. Consolidating my purchase history allows one site to provide better
recommendations to me down the line, speeding up my shopping and improving my
Amazon is really in the driver’s seat here. They’re taking a fairly
significant cut on every purchase made through one of their 3rd party vendors
and they don’t have to ship anything. And for every purchase made on their site,
the odds of additional purchased by the same customer goes up. That’s one heck
of a strong business model.