Drop Shipping - Is this really a problem?

[Teken]

Having read this article a few times I’m hard pressed to understand what the real problem is?

So if anyone can offer clarity and insight that would be great! As I understand the article let’s call them (A) & (B).

(A) companies sells lollipops. As far as I can tell they don’t make the candy but simply resells them just like anyone else.

Then you have (B) these sellers use Amazon and Sam’s Club to accept orders and than drop ships the exact same candy to your door.

You get 100 more lollipops and it’s like $1-2.XX less???

So let’s call the customer (Bob) well Bob literally got a fantastic deal - no? The item came, it’s real, it’s safe, you got 100 more, and you saved $$$

Isn’t that called competition???

This is bolstered by the fact Sam’s Club is selling the item! Isn’t it clear because it’s Walmart and their massive buying power this is why it’s cheaper.

The only difference is you have dozens of people using the Amazon system to do a side hustle to just make honest money???

I don’t see anyone being ripped off or cheated. Just another company that’s upset they can’t compete - no?

Bloomberg - Are you a robot? Lollipops Hustle on Amazon Costs Family Candy Business Millions

 

[mat200]

Having read this article a few times I’m hard pressed to understand what the real problem is?

So if anyone can offer clarity and insight that would be great! As I understand the article let’s call them (A) & (B).

(A) companies sells lollipops. As far as I can tell they don’t make the candy but simply resells them just like anyone else.

Then you have (B) these sellers use Amazon and Sam’s Club to accept orders and than drop ships the exact same candy to your door.

You get 100 more lollipops and it’s like $1-2.XX less???

So let’s call the customer (Bob) well Bob literally got a fantastic deal - no? The item came, it’s real, it’s safe, you got 100 more, and you saved $$$

Isn’t that called competition???

This is bolstered by the fact Sam’s Club is selling the item! Isn’t it clear because it’s Walmart and their massive buying power this is why it’s cheaper.

The only difference is you have dozens of people using the Amazon system to do a side hustle to just make honest money???

I don’t see anyone being ripped off or cheated. Just another company that’s upset they can’t compete - no?

Bloomberg - Are you a robot? Lollipops Hustle on Amazon Costs Family Candy Business Millions

In a true Free Market ... there is balance ..

 

[looney2ns]

The only crime I see is the quality of writing of that article....wow.
You either learn to adapt, or your gone.

 

[Teken]

I guess what I’m trying to figure out is if this is more of a contract issue? Market protection, or similar but not related. Almost everyone knows the term grey market as it relates to hard goods.

Since we are on a video security forum let’s use this as one example. In one instance you have so called authorized sellers, dealers, distributors.

These people buy said video hardware through an authorized channel. Doing so insures hardware is legitimate and comes with manufacturers warranty & support.

On the opposite side of the spectrum you have AliExpress, eBay, Amazon etc. You have millions of sellers offering the exact same item for less!

How they are able to acquire the hardware isn’t really known. It’s either from a so called master distributor and someone has a side hustle and sells these same hardware at or just above costs. They obviously pocket their share or get a cut from these other sellers.

Normally you have only support and warranty from that specific seller and not from the hardware maker.

Regardless, in this example the consumer still received the exact same item but for less!

Now, there are instances were companies go out of their way to control the market price think any major brand: Apple, Nike, UA, etc.

Similarly, you also have industries and companies that collude with one another to keep prices high!

Think every gas / oil company in existence!

Than you have examples of companies that literally prevent other people from entering a physical market. Think Walmart, McDonalds, as they buy up all the property or begin to sell (Walmart) everything so cheap it ultimately kills off all the mom & pop stores!

If we go back to this lollipop story. I don’t see anything related to my examples besides the small guy stole the big guys thunder???

They literally just worked the system like the sellers on AliExpress, eBay, Sam’s Club.

 

[tigerwillow1]

I've had a few ebay purchases drop shipped from amazon, which totally ticks me off because I don't want to contribute a penny to growing the amazon monster.

 

[Arjun]

Frankly, you have to do what is best for you as the consumer. If eBay is giving me 20% back in eBay bucks for purchasing an item from a seller that ultimately sources the item from Amazon and drop ships it to me, I’m all for it as long as the item does not require a warranty and is legit nevertheless

 

[garycrist]

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

So to keep appearances or keep "those that sleep" asleep. There is a lot of bunk and second rate crap going on now.

Stay away from the Mystery Boxes that appear fulfilled by Amazon!
They show all kinds of returns and goodies. It is a total SCAM!

 

[Teken]

Frankly, you have to do what is best for you as the consumer. If eBay is giving me 20% back in eBay bucks for purchasing an item from a seller that ultimately sources the item from Amazon and drop ships it to me, I’m all for it as long as the item does not require a warranty and is legit nevertheless

Agreed, as it relates to possible grey market items or those supposedly not sold through an authorized seller. The buyer will need to decide if the savings are worth the loss of support and warranty.

In this case it’s just candy and the reality is the item is real. Not a fake or imitation or worse something unsafe.

One thing worth mentioning is besides the big candy store vs Joe Public drop ship guys. The simple fact is everyday a company must win your sale it’s not a given!

The fact they state in the article they lost hundreds of thousands to millions in lost sales is disingenuous because they simply were beat out by Joe Public!

Money talks - Bull shit walks . . .

 

[Arjun]

Also, consumers don't want to stockpile hundreds of lollipops. Thus, they can vouch for spending a few cents more and order less through 3rd- party sellers

I ordered through ebay once from a seller selling Sam's Club merchandise. I don't have a Sam's Club membership and the non-member price was not working for me on the website. I decided to order from that ebay seller instead and scored the item for a few dollars less.

Technically, you are not supposed to use your memberships for reselling items. Its likely that if you go against the terms and conditions only a handful of times, your membership still stays in good standing

Remember back in primary school when school staff used to stock pile Ramen noodles from Costco and resell them to students during their lunch breaks? Clearly, on the back of each cup noodles, it says "Not for Resale"

 

[PatPend]

The big question left unanswered in the article is how a reseller like Sam's club can sell Dum-Dums at a cheaper price than the factory. Spangler obviously gave Sam's a real sweet deal to get shelf space in the big box store and now it's biting them in the ass and destroying their retail side.

 

[TonyR]

ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

^^^^^ NOT JUST AMAZON

 

[Arjun]

Perhaps those sellers are current employees with Sam's Club and can therefore, use their 20% Employee discount to resell on Amazon and eBay for profit

The big question left unanswered in the article is how a reseller like Sam's club can sell Dum-Dums at a cheaper price than the factory. Spangler obviously gave Sam's a real sweet deal to get shelf space in the big box store and now it's biting them in the ass and destroying their retail side.

 

[Teken]

The big question left unanswered in the article is how a reseller like Sam's club can sell Dum-Dums at a cheaper price than the factory. Spangler obviously gave Sam's a real sweet deal to get shelf space in the big box store and now it's biting them in the ass and destroying their retail side.

Is that what you got from the article? I was hoping that’s what it was but I understood this is just some big candy store business that so happens to sell this candy - no???

Than again let’s just assume they actually make and sell the candy.

Why would I care someone else is selling my product while I’m raking in millions of dollars?!?

Sure go ahead keep selling my candies I don’t care! I want everyone to sell it and customers to buy the same! I’ll be rich and can retire at 35!

If someone can find out if what I describe is the case would love to know. Again, why even care if you actually make it you’re literally making mad cash!

 

[PatPend]

Yep they are the manufacturer (About Us | Spangler Candy Company). What I got of this article is:

1) Spangler makes candy and sells it both as a wholesaler and a retailer.
2) They are chafed because someone down the channel is undercutting their own retail business and hurting their margins.
3) The author wanted to write a hit piece on Amazon.

 

[Teken]

Yep they are the manufacturer (About Us | Spangler Candy Company). What I got of this article is:

1) Spangler makes candy and sells it both as a wholesaler and a retailer.
2) They are chafed because someone down the channel is undercutting their own retail business and hurting their margins.
3) The author wanted to write a hit piece on Amazon.

Appreciate that insight and clarity. At the end of the day they are moving and selling more product than they ever would.

All of that so called missed margins is easily made up by the dozens of customers still buying their products from (Amazon e-tailer) or whoever!

 

[mat200]

Yep they are the manufacturer (About Us | Spangler Candy Company). What I got of this article is:

1) Spangler makes candy and sells it both as a wholesaler and a retailer.
2) They are chafed because someone down the channel is undercutting their own retail business and hurting their margins.
3) The author wanted to write a hit piece on Amazon.

Thanks @PatPend

lol .. the US Supreme Court has upheld "The first sale doctrine" numerous times .. that's how it goes in a good market economy ..