Amazon Brings Third-Party Sellers to the Masses

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Jan. 31 (Bloomberg) -- Rick Watson, CEO at Merchantry, explains the relationship between Amazon and third-party sellers on Bloomberg Television’s “Bloomberg Surveillance.”

With amazon but how important is a question mark for amazon, it is one of their big growth.

Third-party are other retailers selling through amazon platform.

Amazon provides the real estate of distribution and the sellers provide the fulfillment.

About 39% of its units in the last quarter.

Is there a downside question mark is amazon lose control of what it is able to sell?

They do lose some aspect of control but it is a well-known problem for that this point.

That's for them at this point.

It may the own warehouses where they take their third-party products into their warehouses with the robots at most retailers don't have this sort of is to be shown.

What about price?

You talk about gross margins and the impact of gross margins on them.

Do they have any influence or control over the prices of the third-party sellers?

Can they display the ones that have lower prices more or use the search engines to put them up front?

There are probably a dozen factors of who -- an important concept, who has highest display and they have absolutely -- absolutely sure.

Obviously that's sometimes the lowest price is not the top because the person may not have the best service.

Amazon will then get into it and sell their own product and beat them out on price.

How often does it happen?

It happens all the time and the reverse as well.

Amazon will get out of product that is more profitable to move to third parties.

You saw that in video games in the fourth quarter.

As an expert on retail amazon, five years ago, 17,000 employees, they ramp it up to 80,000 employees and now heading toward 117,000 employees.

Are those retail job equivalents?

Are the jobs they are creating essentially pulling lower rage -- and the world -- and lower wage retail jobs question mark taking share from retailers, the answer is probably yes.

But i think of amazon as a software company.

It is microsoft at the next generation.

And not logistics?

Logistics company but software -- software powers the logistics.

You go to their distribution center or for film and center, they call it, -- for film and centers, they are really amazing things because in part they are all amazon custom written software.

We saw the video of all the packages rolling around, pushed to the right place and stat -- slept with the stickers.

The machinery that manages that is all written by amazon.

Anybody who works at amazon can essentially pull a cord to stop a certain profit from being sold to hear about a problem.

Expertise -- you talk about this industry laid off 400 people, 500 people.

Then i guess that jeff bezos is the greatest job creator in america?

Off the mark?

I think it is unless there are drones replacing ups workers.

Amazon is a technology company that happens to do retail.

When they think about what next industry they want to be in -- wages with full time benefits.

Those are not great jobs.

Working at an amazon fulfillment center is not a great job.

Not even as good a job is working in cosco.

Close to minimum wage.

Often temporary workers.

Think of all of the retailers going out of business because amazon is succeeding.

I would not call them a job creator.

We talked about amazon as a technology company but what it has done so well is the prime membership for graham which has sucked away the momentum from other retailers with free shipping.

Now that amazon is rethinking that cost struck for -- structure, will kind of relationship does amazon have with the third-party sellers?

It basically does not offer that through the third-party sellers.

Third-party sellers can take advantage of prime and super saver shipping by become -- by becoming part of fulfillment of amazon.

Do they lose out in that way?

They do not lose out because they are able to get on the first page which amazon is.

Whereas, if they don't offer fulfillment by amazon -- i am not on crime.

Am i? yes.

I don't do prime.

Prime is great.

If you are in manhattan and you don't have prime -- did you just call me a tool?

Prime pricing might increase.

Still getting free shipping for $100 -- back to that point, amazon gets 10%-50% -- 10%-15%, could we see concessions to the third parties to keep them there?

The people that make concessions are people that are less than amazon.

Amazon is a prime destination for a third-party.

There are many marketplaces that are trying to build up that amazon is the leader.

What did the sales due to the third-party?

Huge.

First page to be on the second page, 10x. that much of a move.

I might remind everyone, 30% per year for the last 10 years.

Do you see a hick up in amazon or is it still basically trending up?

Like any great growth story, the enemy is themselves.

You have 3 million sellers, hundreds of millions of products, you lose control of your brand a little bit him and what are you standing for?

One quick last question.

Did you believe the drone delivery thing or was it a pr stunt?

I think a pr stunt.

This is the guy who had the thousand year clock.

That is how he thinks about things.

Imho own believer, i think.

This text has been automatically generated. It may not be 100% accurate.

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