To bolster profitability, the company is adding more third- party sellers, which generate higher margins, to its website. Amazon logs all of the commission, usually about 10 percent, on any item sold by an outside vendor as profit, and collects fees if the partner elects to fulfill through its chain of warehouses, according to Mercent Corp., a consulting firm that helps retailers improve online sales.
This makes it sound like they control the number of 3rd party sellers; it's actually an open gate. But yes it's the most profitable part of their business, and their FBA program is gangbusters, with zero COGS. It's a virtual marketplace with virtual inventory. Nice gig, but your operating side has to be flawless. |
