retail news in context, analysis with attitude

The Wall Street Journal reports that the way that Amazon manages inventory at its warehouses that is provided by third-party sellers and fulfilled by Amazon, "has allowed many to pool their inventory with supposedly identical items supplied by other sellers - in essence commingling products from third-party merchants with those supplied directly to Amazon by the brands themselves. In other words, a product ordered from a third-party seller may not have originated from that particular seller. If the bar code matches, any one that is on the shelf will do."

The Journal goes on to say that while this system - which is voluntary for third-party sellers - has given Amazon a lot of flexibility and enabled it "to make better use of its warehouse space and keep a wide variety of items in stock around the country," it has in some cases "led to mix-ups between counterfeit and authentic products, even when they are sent by Amazon itself."

The result: bruised feelings on the part of the brands, and damaged relationships.

German knife maker Wüsthof, for example, has stopped allowing its products to be sold on Amazon because of concerns about counterfeits. Johnson & Johnson suspended the sale of its products to Amazon last year because of its trepidation.

Amazon is not commenting on the story.
KC's View:
It is hard not to feel that there is beginning to be a steady stream of stories suggesting that Amazon - whether intentionally, or because its size is dictating certain inevitable shifts - may be finally suffering from growing pains that could hurt it, and give competitors an opportunity to make some headway.