The most passive income?

February 16, 2012 10:07 AM

I recently bought a camera from a third party retailer on Amazon (in the US). The retailer used Amazon's fulfillment service to ship the items and to give Amazon Prime members their free shipping. They also priced their wares at a couple bucks less than Amazon itself, so theirs was the default way to purchase the camera. My questions are: What is expected from the third party retailer in this case? Just buying the stock and cashing the checks? Is there anything to prevent, say, me from doing the same thing?
posted by CutaneousRabbit to Work & Money (3 answers total)

There is nothing preventing you from doing so but you as the merchant pay for the fulfillment services that Amazon provides.

Learn all about it.
posted by FlamingBore at 10:29 AM on February 16, 2012

They buy the stock and ship it to Amazon's warehouse. Amazon charges them storage and handling fees regardless of whether it sells or not (as well, as IIRC) comissions on the sales themselves.
posted by Jahaza at 10:29 AM on February 16, 2012

I wouldn't say there's a "just" there. Even before they do fulfillment, just selling on Amazon means a commision that would mean, say, that you'd have to be able to buy a $500 retail camera for less than $460 before you even paid for anything else in order to make it worth selling there. The fulfillment doesn't cost a lot extra and is probably a good deal as far as that goes if you're already selling there, but it's hardly "passive income"--you'd still have to buy wholesale, have it packaged to sell through them, deliver it to Amazon, keep track of your inventory, do your own accounting, deal with any products that don't meet their specifications, deal with negative customer reviews, pretty much anything else that would go with being in business online, and also the knowledge that at any time, someone else or Amazon themselves could start undercutting your prices.
posted by gracedissolved at 10:44 AM on February 16, 2012