Storyteller01
First Post
Which begs the question: if this is the case, why isn't amazon selling the item directly?
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Death of the LGS
- Thread starter gamersgambit
- Start date
Which begs the question: if this is the case, why isn't amazon selling the item directly?
Amazon has set themselves up as the middleman. It's easier than selling directly and if it makes sense down the road they can always start selling directly as well. From Amazon's standpoint the marketplace is a gold mine, they're getting sales data on a huge number of markets, data that can be used to decide where they expand.
By the way, "begging the question" is a logical fallacy, you've used the phrase incorrectly.
I would imagine because it's more profitable for them to receive a small commission on the Marketplace sales of those items than to sell them directly? Also, Marketplace is where Amazon offers used merchandise from resellers.
Marketplace adds a lot of value Amazon. It's widens their stock at negative cost to them. And even if Marketplace mere helps get people in the virtual door, it's still an asset.
The overhead involved with Inventory, in all likelihood. That's pretty much the reason why no company can get into the "selling every product in the world at the lowest possible price" game. Many products just sit around too long and have wild shifts in demand.
Look what happened when Amazon couldn't deliver enough 4th Ed stock on time: people canceled their orders and bought elsewhere.
Now compare this to the company that made 4 million Atari ET Game cartridges and only sold 1.5 million ever, or that local Magic shop that still can't sell their back-stock of Homelands.
Amazon needs to move a lot of volume without having a lot of stale inventory to manage or exposing themselves to the risk of a massive over-stock. So they'll be all over products with reliable sales and inelastic demand, and they'll avoid products with more nebulous sales trends and more niche markets. Basically, they cherry-pick the cash-cows that involve the least work, the least support, and the least turn-around time.
- Marty Lund
Right. Can't forget this.
"Begging the question" is a term applied to two different things in logic:Amazon has set themselves up as the middleman. It's easier than selling directly and if it makes sense down the road they can always start selling directly as well. From Amazon's standpoint the marketplace is a gold mine, they're getting sales data on a huge number of markets, data that can be used to decide where they expand.
By the way, "begging the question" is a logical fallacy, you've used the phrase incorrectly.
1) Circular reasoning (undoubtedly what you're referring to, more specifically begging someone to accept the question)
2) An unaddressed, but implied question (from which the term originates)
Storyteller01
First Post
Then what incentives is amazon giving companies like WotC that allows them to sell these books at such reduced rates that they can't or won't give o these other retailers?
No. The term originates from the logical fallacy. Nor is your parenthezied description in "1" quite correct either, though it's close.
Number "2" is the colloquial usage originating from people hearing the correct version used and misunderstanding it due to the word "beg". It's not fairly commonplace to use the incorrect version, but it is still incorrect.
This isn't the forum for this argument though, so I'll stop there. I regret pointing out in the first place, knowing the reaction it would produce.
Your question is based on a faulty premise: Wizards of the Coast doesn't "allow" Amazon to sell their books. Wizards of the Coast produces books that then enter the supply chain. They don't sell them to Amazon at one price and LGS's at another.
Most local retailers buy their stock from Distributors, who bought supply from other Distributors or Wholesalers, and so on up-chain. Each business in the chain marks up the price to cover expenses, profits, and taxes.
Mass-volume businesses like Amazon often get their stock directly from Manufacturers or Wholesalers - cutting their supply chain sharply. This reduces the amount of overhead involved in the process, the amount of points of taxation, and the number of people taking a profit out of the deal. On top of that, mass purchases generally reduce costs due to Economies of Scale.
If nothing else, understand this to be true: it costs much more to get 10 books each to 30 businesses than it does to get 300 books to a single business.
- Marty Lund
Raven Crowking
First Post
You absolutely sure about this? I can tell you as a fact that it is normal practice to reduce prices based upon volume purchase, and your average B&M doesn't have the same volume as Amazon. I would be willing to bet that Amazon purchases at a very, very large discount from your B&M storefront (as you yourself point out). WotC is more than willing to enter into direct sales arrangements with any store that will agree to a minimum monthly purchase; I imagine Amazon more than qualifies.
BTW, Korgoth, nice post earlier, and I am also waiting for a mod response. I deleted my last post because I am uncertain how one can (intelligently) discuss the economic problems facing retailers without discussing economics.
@Mallus: As soon as we have a mod response about what we are allowed to discuss re: economics, I'll be happy to answer you.
RC
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