I could see this one coming a mile away. I worked with manufacturers overseas for a few years and I would just slap my label on products and mark them up 200%.
Those factories should be able to sell directly to the consumer via the Amazon marketplace, but there's a lot of hurdles for them. And they're certainly not equipped to run their own Shopify store.
If Amazon can reduce this friction (and I think they can) I expect the prices of a lot of commodity types of goods (like salad bowls or bike pumps) to drop significantly.
I would guess language and general cultural barriers, spending much time in SEAsia, many of the (sometimes trivial) things western people expect from services are really hard for locals to "get" without outside (read western) guidance.
Just the tiniest bit of branding/marketing often sets someone miles apart from another otherwise equal local competitor.
> spending much time in SEAsia, many of the (sometimes trivial) things western people expect from services are really hard for locals to "get" without outside (read western) guidance.
Yes, exactly, same applies for many local businesses (shops, restaurants, service providers) not just Alibaba. Hell, a decent sized private hospital here has a nonfunctional website (like not just bad but actually returning 404's).
Another good example is the real-estate rental market. Many places lack furnishing and lose lots of business over similar competitors, and I mean the types of basics a months rent would cover. I was never able to figure out if this was due to lack of liquid funds (even though it would pay for itself fast) or something cultural.
Also, even if they get all those things right, don't underestimate the complexity of simply shipping goods to other continents. We're manufacturing, selling and shipping shoes from europe and while it's easy within the EU it's hell once you try to reach customers in other continents. Just handling returns (which are to be expected frequently with shoes and their sizing) simply renders the option too complicated and expensive for small companies.
Meh, I buy stuff from alibaba from europe, cheap stuff like e15 worth of usb connectors. They seem to manage just fine shipping, for free too, thanks to subsidized china mail. For those low amounts they don't even bother with returns; most are so afraid of bad ratings/open disputes that they'll ship another batch the moment you voice a complaint.
Not saying I disagree with you I guess, it's also about westerners finding alibaba a bit too exotic (and dangerous), but once you get used to the asian style shopping, it's fine.
I've spent 15 years buying stuff off amazon.com (coming from California), and have recently moved to Singapore. The closest version of Amazon (with *insanely good local shipping - sometimes same day by bike courier) is http://www.qoo10.sg. I've been fully satisfied with prices, and delivery on everything there - but, it's still a bit of a culture shock for your average western shopper.
We'll see if I still feel the same way a year from now - but (even ignoring the discovery issue) I can imagine how having Amazon provide an interface for my purchases would have made this way more seamless.
I'm talking from the perspective of the seller and of course I can only talk about our experience. Again, shoes (high priced too) are probably very different from cheap USB connectors. And having to ship a pair of 200,- € shoes back and forth from europe to the USA until the customers found the correct size is not worth the effort in our opinion. It's hard to find a proper return service - you can't leave that task to the customer; if proper export documents are missing we have to collect the return package from the customs. It's a mess.
And if you ship larger amounts you have to register the export with the customs office, which is another complicated process, filling endless forms in some mandatory Java applet system.
Amazon getting rid of all of this for a reasonable price would be very welcome.
That was my initial understanding of TTIP back when the news broke.
And no, I think Zalando can afford and handle that stuff just fine considering their size. We're a small manufacturer, very different from a retailer like Zalando.
I can tell you they will have a difficult time, at least initially, with Amazon's seller policies.
The idea of mandated timelines for shipping, returns/refunds on a customer whim, timely communication with buyers, accurate product pictures + descriptions, accurate inventory levels, etc, will be a shock. I predict lots of interesting new posts in the Amazon seller's forum.
No, that's actually a pretty racist and outdated assumption of China.
It's because of risk.
The full chain of manufacturing, exporting, warehousing, distributing, marketing, selling is a lot of work. Marketing being the last more risky and unprofitable part of the process.
Private labeling products to sell on Amazon and have Amazon handle fulfillment is one of those handful of get rich schemes peddled around often.
It's a good thing if you can get it going but finding the right niche, outcompeting other people doing the same thing, handling the support, and still getting a cut out of it is hard work.
Instead owning a factory, maximizing output, buying more land, building more factories, and letting others worry about making risky profits is a better business proposition.
Those factories should be able to sell directly to the consumer via the Amazon marketplace, but there's a lot of hurdles for them. And they're certainly not equipped to run their own Shopify store.
If Amazon can reduce this friction (and I think they can) I expect the prices of a lot of commodity types of goods (like salad bowls or bike pumps) to drop significantly.