[wiremonger]

> 10-15% could be 50-60% profit for most sellers.

Yup. Amazon provides an extremely valuable service to us: they provide a stream of customers who are at the end of the sales funnel and ready to convert because they trust Amazon's platform.

> What happens when Amazon starts private labeling the same things you sell? Or your supplier starts selling on Amazon and undercutting you?

This is going to blow your mind, but we compete against both Amazon Basics and our factory.

We compete with Amazon Basics by selling a differentiated product. Amazon will never be able to compete in every product niche and at every level of quality/differentiation. It's actually not possible for the same reason that a centrally planned economy breaks down above a certain level of complexity: there are simply too many different niches that need to be addressed and the profit motive is the only system we've discovered which ensures that they get addressed.

And we compete with our supplier by understanding the market better. They're good at manufacturing, but they don't really understand the end user. The type of personality that is good at operating a factory tends not to be the type of personality that is good at marketing. HN doesn't really like to hear this, but sales and marketing are actually an important part of running a business, especially one that sells to consumers.

[philistine]

So you’re one good hire away from losing your business. I’d be sure to differentiate and have other venues for revenue.

[wiremonger]

By your theory, any business with suppliers or retail customers is one hire away from extinction. But we don’t actually see all that much of this kind of competition out in the real world. There is a reason that firms specialize: the size and organization of a firm is tied pretty tightly to the kinds of activities that pay the bills and manufacturing is very different from sales and marketing is very different from running an online retail marketplace.