retail news in context, analysis with attitude

Re/code has an interesting story about something called "retail arbitrage - the practice of buying a product at one price from one retailer and reselling it on another shopping website for a profit."

The practice has become more commonplace, the story says, with the explosion of e-commerce. Re/code tells the story of a woman who received a shipment from Sam's Club of a product that she bought on Amazon.

"How did that happen? An online merchant had bought the detergent on Samsclub.com for one price, and sold it to her through Amazon.com for several dollars more. This Amazon seller then had the detergent shipped directly from Sam’s Club..."

The story notes that the practice "can be disappointing for loyal Amazon customers who trust that Amazon usually has the best price, or something close to it." The story notes that while the practice is not illegal, it is counter to Amazon's policies, though the retailer doesn't always know it has happened until it has been pointed out.

And Re/code says that the practice "is the part of Amazon’s business that isn’t always clear to shoppers: Not everything sold on Amazon is coming from Amazon itself. In fact, 47 percent of the items sold on Amazon today are being sold by someone other than Amazon, and that percentage has been increasing each and every quarter.

"This growth has mostly been a good thing for Amazon, because it allows Amazon to expand its product selection in important categories like apparel without taking on the risk of owning all that inventory itself. The company also takes a cut of sales anytime one of these sellers sells an item on its site.

"Still, a sale that comes at the expense of customer trust is not a sale you would imagine Amazon wants. And neither do its customers."
KC's View:
I think I'd be a little put off if I bought a product from Amazon and it was shipped to me by Walmart or Sam's. But I reject the idea that it isn;t completely transparent on Amazon that many products are sold by third parties, and certainly there is complete price transparency, with Amazon even pointing out when products that it sells are available for a lower price from someone else on the site.