Interesting that this "transformation" is pretty close to what Sun and other dot com infrastructure sellers were promising in 1998. They phrased it as "take your small town business and give it a world wide footprint" but it is the same. They missed the "we'll take 1/3 of your price too" part :-).
That, in itself, is just curious. But the interesting lesson here is that the real thing has not been "web presence" or world wide visibility, it was Amazon has built a pretty impressive logistics setup for moving stuff from vendors to users. It rivals what Sears & Roebuck did in the 60's and 70's. THAT seems to be the missing piece which one might call "logistics as a service."
It makes me wonder why Aliexpress doesn't have more warehouses in the US. Clearly there are a number of Amazon vendors who buy from factories advertising on AE and then drop ship to Amazon, and sell at a markup that covers Amazon's take and gives them a profit. So basically Amazon is taking a big piece of the "value chain" from factory to customer. If you can run a distributed logistics operation at 20% or even 15% of the market value of the goods your distributing, you can under cut Amazon.
Given that Walmart already has relationships with freight forwarders from China and a bunch of brick and mortar stores that could double as warehouses, I wonder if they have considered this as a "side hustle."
Considering that this hinges on the cost of operations for the logistics service the interest in logistic based robotics is quite understandable.
> It makes me wonder why Aliexpress doesn't have more warehouses in the US
My guess would be liability. A lot of what's sold on Aliexpress is... questionable. Fakes, products that are patently unsafe or don't meet US regulations, fraudulent specs, etc.
What's happening right now is basically a bit of a laundering operation where small "front" businesses in the US, often registered to residential addresses, import small chunks of the inventory, collect markup, and resell it domestically on Amazon, eBay, Etsy, walmart.com marketplace, or whatnot.
And if their USB chargers keep catching fire or a big brand gets uppity about trademark infringement, the retailer disappears, and a new one pops up. Amazon gets some flak in the media every now and then, but they are several steps removed from the phenomenon.
If you had a Chinese megacorp with a large US footprint, they would likely soon find themselves in hot water with all kinds of regulatory agencies. Partly because there would be a single party with gobs of money to go after, and partly because of anti-China sentiments.
To be honest maybe I am just old but it seems like every argument and quibble people have been having over Amazon is the exact same arguments I saw back in the early 2000's the only difference is the company was Wal-Mart instead of Amazon.
> "take your small town business and give it a world wide footprint" but it is the same. They missed the "we'll take 1/3 of your price too" part
For someone that doesn’t sell consumer goods that cut can sound like a lot.
But getting distributed in brick and mortar retail, the cut is far greater (at least 50%).
And the alternative is direct online sales, which only recently has become viable in a scalable way for most consumer brands (thinking of the DTC revolution here)
>It makes me wonder why Aliexpress doesn't have more warehouses in the US
I'd suspect they do. Here in Australia, it's really common to get AliExpress goods delivered in 2-3 business days, with an AusPost label on the box and a return address in Melbourne.
Even for goods not physically located in the country, they're clearly doing something clever in terms of consolidating packages, booking out large chunks of air cargo space and dispatching from a local warehouse. Same deal with the Australian return address, but 7-10 days instead of 2-3.
You can tell when they're coming via this route, as they'll have the shipping method "AliExpress Standard Shipping". CaiNiao is still your bog standard 4-6 weeks by boat.
This is a pretty new thing, and only came about after China lost access to subsidised global shipping (as in, subsidies from other developed countries, not the Chinese Government) in 2021.
AliExpress sellers also lost access to subsidised shipping from the Chinese government in the last few years. Prior to this, for certain locally manufactured goods, they could send them overseas at a rate of something like 1 yuan per half-kilo (essentially US$0.02 or so for a USB cable), hence why you'd get all these $1 items with free shipping.
It makes me wonder why Aliexpress doesn't have more warehouses in the US
because US is not a free market. Gatekeepers got to take their cut (if you don't get outright denied access to the market because nationalism). Amazon is as good as any other gatekeeper, so why change ?
> But the interesting lesson here is that the real thing has not been "web presence" or world wide visibility, it was Amazon has built a pretty impressive logistics setup for moving stuff from vendors to users. It rivals what Sears & Roebuck did in the 60's and 70's. THAT seems to be the missing piece which one might call "logistics as a service."
I can't really agree with this. Amazon started out by using existing delivery services. And the quality of delivery from Amazon at that time was much higher. Now that they prefer using their own delivery services, their delivery sucks. They've built a logistics setup that is much worse than what we already had.
Not sure about U.S. SMBs but Amazon's influence on China small business is a rounding number. Only a relatively small number of vendors sell items on Amazon. They made good money but the good days is almost over given recent quality/piracy crackdowns.
Taobao (under Alibaba) has 100 times more influence on how small business in China conduct business. I know small store owners whose business were wiped out by the rise of Taobao. Amazon? They've never heard of it.
Yes. There's the concept of a "taobao village" in China where you have entire rural communities of online merchants supplying smaller towns/villages that otherwise wouldn't really use ecommerce.
And the funny thing is these even exist in Germany now. In Duisburg I met some Chinese taobao merchants years ago who'd settled as expats in the city because it has particularly strong ties to the country as there's a direct freight train route to Chongqing.
There is a different 'class' of junk sold on Taobao vs Amazon but both stores still seem chock full of junk. Maybe they were affected in the same way just by different players.
> There were an estimated six million merchants on Amazon’s marketplace in 2021, and around 2,000 opened new accounts each day. On average, Amazon collects 34% of each sale they make, according to research published the same year by the Institute for Local Self-Reliance. Estimates from 2020 showed that around 54% of Amazon sellers in the U.S. market were based in the country, while 40% were in China.
Amazon sellers are actually researching the market and designing new products, which
can't be said about domestic Chinese brands and sellers that are mired in cutthroat price dogfights.
The profits maybe not be that big, but big enough to drive a skeleton team, make a small fortune. One item with $500 a day in revenue can let you make more money than a typical coder.
This title, which is not the title of the article nor the study (it's the first sentence in the article) could be seen as misleading. I've directly worked with thousands of small businesses in the U.S. and what is being discussed here has almost no relevance nor impact on them. Also the study is based on just 40 interviews with Amazon merchants.
What this is really about is highlighted in the study's post[0]:
"This report highlights how Amazon’s scale has also given rise to new kinds of small businesses — ones optimized for Amazon"
As well as the lead in the study: "This report recounts a history of third-party (3P) sellers who have played a key role in building up Amazon’s retail business—and thus, Amazon as a whole—over the last two decades."
It’s interesting how a lot of products in Amazon are just rebranded stuff from Alibaba. It seems like the Amazon sellers are auto generating the brand names. There is probably some kind of drop shipping app that does it for you.
I look at Amazon as faster shipping from Aliexpress.us.
Sometimes the prices are insanely different and if I don't care about shipping times, I'll just get the same exact stuff from Ali for a lot less money. Other times, the prices aren't much different and I just get it from Amazon.
Some sort of marriage between the two systems would be nice. Ali's search engine is not as easy to use as Amazon's and it is a pain searching on both and comparing prices.
95% of the time, if the sellers name on Amazon is all uppercase, you can bet it is cheaper on Ali.
>>The seller said she spends 80% of her time optimizing the keywords she uses in her product descriptions and advertisements, in order to ensure her goods rank highly in Amazon’s search results. “I don’t use any other social media channels to draw traffic to my store,” she told Weigel.
That looks like an opportunity for someone to build some specific tools...
I expect there are some already out there, but if the task still consumes that much time, i.e., is that much of a pain point, obviously there is opportunity still left on the table.
It was amazing in the early days on the pandemic here in the UK how few businesses could do basic things like know what was in stock or let you pay on line. Amazon came through when I needed a bunch of what I considered essentials (fuses for my house for instance). Brick and mortar stores were useless.
A lot of small scale UK retailers have already proven to themselves that internet retailing isn't worth the bother. I know of some who've invested huge sums of money, sometimes as much as £100, creating social media channels with up to 12 individual posts that have yielded no sales at all!
There's also a dire shortage of UK developers willing to do all the work, with no retainer, based purely on a shady prospect of a share of the profits at some distant time in the future.
This is what maximalist success looks like in the public market
This is the end result of every business that organizes itself as investor and capital owned instead of employee and worker owned. And it's what every startup is selling, that they will do this to their market and time and time again they prove it correct.
You enter a market, monopolize it, crush everyone within it and a handful of people take their giant bags of money and buy an island.
You just assume you'll be the one with the island instead of being crushed
For anyone who wants to read a small bookshop owner’s take on Amazon’s “transformation” of business, I can highly recommend “How to resist Amazon and why” by Danny Caine.
Related is what China's currently doing through the Universal Postal Union. The tl;dr is that they're claiming developing nation status in order to get heavily subsidised airmail to the United States. The following describes the situation in more detail and how it poses a threat to US retailers.
We could end the scourge of Chinese junk overnight if we overhauled their status. It's unconscionable that it costs more to mail something domestically within the US than it does for a Chinese seller to mail a comparable item internationally via ePacket... which is then handled and delivered via the USPS. I'm sick of US-based businesses' shipping costs subsidizing their own competition.
If I read correctly, Amazon adds a 50% increase over the price from the seller. If we think about the cost of manufacturing to the price the person that buys from Amazon, the price hike is significant, the buyer is paying a lot of money for something that in theory is way less expensive. The 100$ coffee.
Interestingly, transformation happened in the absence of Amazon.
For example, Allegro in Poland offered much wider choice than Amazon.
Basically competitor for eBay but with transportation included (thanks to InPost!)
The main difference is that the brand is more visible on Allegro.
I want to see a study of the impact of Amazon on unemployment and inequality. Inequality has been flat and then declining in the US since about 2013. Unemployment has remained at rock bottom rates. I think a lot of this is the competition Amazon provides for low skilled labor.
The tone is accusatory, the content is that many companies start businesses selling on Amazon specifically and don't just use Amazon as one medium among many. I fail to see the problem.
[+] [-] ChuckMcM|3 years ago|reply
That, in itself, is just curious. But the interesting lesson here is that the real thing has not been "web presence" or world wide visibility, it was Amazon has built a pretty impressive logistics setup for moving stuff from vendors to users. It rivals what Sears & Roebuck did in the 60's and 70's. THAT seems to be the missing piece which one might call "logistics as a service."
It makes me wonder why Aliexpress doesn't have more warehouses in the US. Clearly there are a number of Amazon vendors who buy from factories advertising on AE and then drop ship to Amazon, and sell at a markup that covers Amazon's take and gives them a profit. So basically Amazon is taking a big piece of the "value chain" from factory to customer. If you can run a distributed logistics operation at 20% or even 15% of the market value of the goods your distributing, you can under cut Amazon.
Given that Walmart already has relationships with freight forwarders from China and a bunch of brick and mortar stores that could double as warehouses, I wonder if they have considered this as a "side hustle."
Considering that this hinges on the cost of operations for the logistics service the interest in logistic based robotics is quite understandable.
[+] [-] wombat_trouble|3 years ago|reply
My guess would be liability. A lot of what's sold on Aliexpress is... questionable. Fakes, products that are patently unsafe or don't meet US regulations, fraudulent specs, etc.
What's happening right now is basically a bit of a laundering operation where small "front" businesses in the US, often registered to residential addresses, import small chunks of the inventory, collect markup, and resell it domestically on Amazon, eBay, Etsy, walmart.com marketplace, or whatnot.
And if their USB chargers keep catching fire or a big brand gets uppity about trademark infringement, the retailer disappears, and a new one pops up. Amazon gets some flak in the media every now and then, but they are several steps removed from the phenomenon.
If you had a Chinese megacorp with a large US footprint, they would likely soon find themselves in hot water with all kinds of regulatory agencies. Partly because there would be a single party with gobs of money to go after, and partly because of anti-China sentiments.
[+] [-] kneebonian|3 years ago|reply
[+] [-] hammock|3 years ago|reply
For someone that doesn’t sell consumer goods that cut can sound like a lot.
But getting distributed in brick and mortar retail, the cut is far greater (at least 50%).
And the alternative is direct online sales, which only recently has become viable in a scalable way for most consumer brands (thinking of the DTC revolution here)
[+] [-] jerf|3 years ago|reply
Everything promised in the dot com boom has basically happened, right down to the much-maligned delivering pet food over the internet.
It just didn't happen fast enough to save them in the late 1990s, and the space was just overinvested even so.
[+] [-] AussieWog93|3 years ago|reply
I'd suspect they do. Here in Australia, it's really common to get AliExpress goods delivered in 2-3 business days, with an AusPost label on the box and a return address in Melbourne.
Even for goods not physically located in the country, they're clearly doing something clever in terms of consolidating packages, booking out large chunks of air cargo space and dispatching from a local warehouse. Same deal with the Australian return address, but 7-10 days instead of 2-3.
You can tell when they're coming via this route, as they'll have the shipping method "AliExpress Standard Shipping". CaiNiao is still your bog standard 4-6 weeks by boat.
This is a pretty new thing, and only came about after China lost access to subsidised global shipping (as in, subsidies from other developed countries, not the Chinese Government) in 2021. AliExpress sellers also lost access to subsidised shipping from the Chinese government in the last few years. Prior to this, for certain locally manufactured goods, they could send them overseas at a rate of something like 1 yuan per half-kilo (essentially US$0.02 or so for a USB cable), hence why you'd get all these $1 items with free shipping.
[+] [-] slim|3 years ago|reply
[+] [-] up2isomorphism|3 years ago|reply
No these small business owners are way smarter than you on this, they won’t even consider Amazon if that’s not saving their cost.
[+] [-] eunos|3 years ago|reply
Temu by Pinduoduo are trying their luck. Let's see in a few years.
[+] [-] skybrian|3 years ago|reply
[+] [-] dieselgate|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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[+] [-] RC_ITR|3 years ago|reply
Maybe revealing - the incentives provided by the 1/3 cut are maybe why Amazon succeeded and Sun did not.
[+] [-] thaumasiotes|3 years ago|reply
I can't really agree with this. Amazon started out by using existing delivery services. And the quality of delivery from Amazon at that time was much higher. Now that they prefer using their own delivery services, their delivery sucks. They've built a logistics setup that is much worse than what we already had.
[+] [-] guardiangod|3 years ago|reply
Taobao (under Alibaba) has 100 times more influence on how small business in China conduct business. I know small store owners whose business were wiped out by the rise of Taobao. Amazon? They've never heard of it.
[+] [-] Barrin92|3 years ago|reply
And the funny thing is these even exist in Germany now. In Duisburg I met some Chinese taobao merchants years ago who'd settled as expats in the city because it has particularly strong ties to the country as there's a direct freight train route to Chongqing.
[+] [-] nebula8804|3 years ago|reply
[+] [-] nonethewiser|3 years ago|reply
[+] [-] thetinguy|3 years ago|reply
[+] [-] nomay|3 years ago|reply
The profits maybe not be that big, but big enough to drive a skeleton team, make a small fortune. One item with $500 a day in revenue can let you make more money than a typical coder.
[+] [-] baybal2|3 years ago|reply
[deleted]
[+] [-] coderintherye|3 years ago|reply
What this is really about is highlighted in the study's post[0]:
"This report highlights how Amazon’s scale has also given rise to new kinds of small businesses — ones optimized for Amazon"
As well as the lead in the study: "This report recounts a history of third-party (3P) sellers who have played a key role in building up Amazon’s retail business—and thus, Amazon as a whole—over the last two decades."
[0] https://datasociety.net/library/amazons-trickle-down-monopol...
[+] [-] black6|3 years ago|reply
[+] [-] whywhywhydude|3 years ago|reply
[+] [-] latchkey|3 years ago|reply
Sometimes the prices are insanely different and if I don't care about shipping times, I'll just get the same exact stuff from Ali for a lot less money. Other times, the prices aren't much different and I just get it from Amazon.
Some sort of marriage between the two systems would be nice. Ali's search engine is not as easy to use as Amazon's and it is a pain searching on both and comparing prices.
95% of the time, if the sellers name on Amazon is all uppercase, you can bet it is cheaper on Ali.
[+] [-] Sebguer|3 years ago|reply
[+] [-] toss1|3 years ago|reply
That looks like an opportunity for someone to build some specific tools...
I expect there are some already out there, but if the task still consumes that much time, i.e., is that much of a pain point, obviously there is opportunity still left on the table.
[+] [-] LatteLazy|3 years ago|reply
[+] [-] dazc|3 years ago|reply
There's also a dire shortage of UK developers willing to do all the work, with no retainer, based purely on a shady prospect of a share of the profits at some distant time in the future.
[+] [-] AndrewKemendo|3 years ago|reply
This is the end result of every business that organizes itself as investor and capital owned instead of employee and worker owned. And it's what every startup is selling, that they will do this to their market and time and time again they prove it correct.
You enter a market, monopolize it, crush everyone within it and a handful of people take their giant bags of money and buy an island.
You just assume you'll be the one with the island instead of being crushed
[+] [-] shever73|3 years ago|reply
[+] [-] robocat|3 years ago|reply
[+] [-] tjpnz|3 years ago|reply
https://youtu.be/BA6gDep6jVM
[+] [-] Wingman4l7|3 years ago|reply
[+] [-] Kukumber|3 years ago|reply
[+] [-] AdrianB1|3 years ago|reply
[+] [-] miga|3 years ago|reply
The main difference is that the brand is more visible on Allegro.
[+] [-] baron816|3 years ago|reply
[+] [-] scarface74|3 years ago|reply
[+] [-] throwawyzxc|3 years ago|reply
[+] [-] say_it_as_it_is|3 years ago|reply
[+] [-] lotsofpulp|3 years ago|reply
[+] [-] luckylion|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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