What I think happens is, Amazon watches a lot of sites and basically price matches/undercuts deals constantly. They're fully aware of how this site works too. Once they see the drop price they can then set a price just below it and wreck the drop. There isn't much massdrop can do other than start flexing the price after its started to beat other sellers and prices.
JrummerI'm sure Amazon does stuff like that but the fact that they are willing to lower prices means their cost must be lower. I doubt even Amazon will take a loss just because they saw a lower price on some other site. The question is how do we get those lower costs? Limiting the drops to a small number can't help.
andylol, so you think amazon is still losing money on diapers?
Thats clearly just a temporary move to pressure the company into selling. Undercut the competitors to take their business. Not a permanent thing. Or are you implying amazon is trying to buy Massdrop?
andywell the events in that article happened 6 years ago, the article itself is 3 years old. i also doubt that amazon gets the same wholesale rates as a startup website from a major manufacturer like PG. just the buying power amazon brings itself can make their calculations completely wrong. take a look at walmart and coca cola. or costco and any of their suppliers. costco has such a fantastic return policy cause they don't lose money off of it.
andyI work in logistics (nothing fancy, loading trucks actually), just thought it would be funny to add that the volume of diapers that goes through the system is insane. Easily averaging 3-4 on each truck every weekday. Though, I wonder how that projected loss of $100 million compares to the expected cost of advertising. Perhaps Amazon is betting on customers purchasing extra stuff once they get in the habit of buying something on such a regular basis as diapers. Kind of like the movie theater model for popcorn and soda.
haha I don't know if anyone really cares, but I thought I'd add my thoughts. Thanks for the link andy, that was a good read. Amazon is ruthless.
"Quidsi could now taste its own blood. At one point, Quidsi executives took what they knew about shipping rates, factored in Procter & Gamble’s (PG) wholesale prices, and calculated that Amazon was on track to lose $100 million over three months in the diaper category alone."
Source: http://www.slate.com/blogs/future_tense/2013/10/10/amazon_book_how_jeff_bezos_went_thermonuclear_on_diapers_com.html
Thats clearly just a temporary move to pressure the company into selling. Undercut the competitors to take their business. Not a permanent thing. Or are you implying amazon is trying to buy Massdrop?
haha I don't know if anyone really cares, but I thought I'd add my thoughts. Thanks for the link andy, that was a good read. Amazon is ruthless.