Amazon Payments have started to approach US merchants by email offering to buy their stock at full listed price in order to resell it themselves overseas. This looks very much like an extension of the program they launched in Europe last November called ‘Simplify Global Selling’.
Essentially it’s a way for Amazon to accelerate their growth and make stock available in territories that their merchants either aren’t able or aren’t willing to service. It may be that customs and import is to complex or expensive to process compared to the sales a seller expects to win, or simply that shipping to these areas is too expensive. Amazon won’t worry about either of these issues as logistics are where they excel and they’re big enough to automate all the duties and taxes that are involved with the import and export of products.
For sellers, at least on the face of it, it’s an attractive proposition. Amazon pays the full local marketplace price that you offer and as far as you are concerned that’s the end of the deal. Amazon then either pass on at the same cost (having already made their profit on the sale and FBA fees they charge the seller) or add on a bit to cover their costs plus shipping. As a seller, with Amazon as your customer of record in your local country, it does sound all a bit too good to be true and in many cases Amazon might make an instant profit if they can reclaim VAT (or local Sales Tax) back when the export.
Overall it’s hard to pick holes in Amazon’s proposition, but as norm everything isn’t quite as clear cut as it may sound at first glance. For instance there are some protectionist manufacturers with whom you may have a restrictive distribution agreement. Birkenstock (a footware retailer) are one and have already pointed out that they don’t allow the sale of their products to other retailers… which includes Amazon. Whilst some Birkenstock retailers are authorised to sell on Amazon themselves, they can’t become Amazon suppliers.
There could also be potential problems with stock which you’re only authorised to sell in certain territories – entering the grey import/export market could also see your supplier closing your account.
