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by curryst 2053 days ago
> No they don't. Stores buy their stock. They can choose to stock other brands or to make their own products, but they invariably have to purchase what they sell.

This is technically true, but I don't think it accomplishes what you think it does. In large retail agreements, it is fairly common to include buyback clauses. I.e. if the goods don't sell within a specified time frame, the supplier is contractually obligated to buy them back from the retailer. In some cases, they are not even required to return the inventory they have left, but the supplier must still "buy them back". In other agreements, payment isn't made until the goods are sold (which is what Amazon does).

So having to buy the goods doesn't give a brick and mortar store much extra incentive to make sure the stuff they "bought" sells. They can still undercut a product with an in-house version and suffer no losses from not selling whatever they replaced.

It's a shitty business model, but Amazon isn't alone here. If it makes sense to stop Amazon from doing it, we should stop everyone from doing it.

2 comments

Buyback clauses are very rare. Generally, most suppliers refuse buyback provisions except for new product lines.

And most retailers build spoilage into their profit models. It's why margins are so low even though they sell everything marked up by double digits.

The stores would have to have a dominant position or abuse that position.

EU competition comission only cares about maintaining a competitive market. Until the overwhelming majority of the stores in my area are Amazon - there's no ground to target B&M stores.