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Molson Hart

8 Jun, 8 tweets, 3 min read

Does Amazon make money on the shipping and fulfillment it charges FBA sellers?

They don't reveal these data but there are clues implying this is a strong profit center.

Here's one example:

- $5.27 to ship out of our warehouse
- $7.48 to ship out of Amazon.

Here is a graph of 152 skus for which we have data.

When the red line is above the blue line, it means our shipping cost is higher than Amazon's.

When the blue line is higher, it means Amazon is more expensive.

To make this comparison apples to apples, remember:

- Amazon is including the cost of the box and fulfillment, we're not here ($0.30-$0.50 for us).
- Amazon has robots, we don't.
- Amazon has warehouses all over the country. We have one.

- Amazon combines multiple products in a single package. In this comparison we did not do that (a few shipments snuck in). When we do we routinely get our shipping cost per unit $1 to $1.50
- Amazon has an entire delivery service. We pay USPS and FedEx to do that for us.

- We pay $0.50+ per unit to ship our units to Amazon where storage is over 20x the cost of our own warehouse.
- Amazon charges customers without prime shipping, we don't. For prime members, they get the prime membership fee.

- Amazon can get cheaper packaging than we can.
- Amazon is the biggest package shipper in the world. We're a small business that spent under $500k on warehousing shipping in 2020. They have way better negotiated rates than we do.

59% of our catalog is cheaper to ship out of Amazon.

42% of our catalog is cheaper to ship out of our warehouse.

If a small company with a single warehouse and no robots or package delivery can do that, I think it's safe to say that Amazon is making money on shipping.

Verify this data yourself by purchasing our products from both Amazon our website, just please do not verify the return shipping 😜

Our website: brainflakes.com/collections/sh…

Amazon: amazon.com/VIAHART-Interl…

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More from @Molson_Hart

Molson Hart

@Molson_Hart

27 Apr

Here's a thread of Wojak memes that will teach first time founders how to be a successful entrepreneurs.

Thinking that you're above sales or that people will just show up at your app is a classic first time founder mistake...

You must learn to sell!

1/n

I see this one all the time in e-commerce, even from experienced entrepreneurs who are doing millions in sales.

@naval

When I first started as an entrepreneur I was obsessed with intelligence.

That was stupid and my early employees were smarter than I was in ways I couldn't see.

"Life is too short to work with people you dislike" @naval

Read 8 tweets

Molson Hart

@Molson_Hart

25 Apr

I reread Influence, one of the greatest books of all time.

It will teach you to be more persuasive and how to avoid being conned by people who know its techniques.

This is a 🧵 of its core concepts based on excerpts 1/n

👇👇👇

It's important to understand that people will do things without thinking about them consciously. Check out Thinking Fast and Slow for more information about this. My use of the 🧵 and 👇 emojis are an attempt thoughlessly trigger retweets.

This is the author, Professor Cialdini Ph.D.

Very importantly he didn't craft this book from an academic ivory tower. They way he came up with the 6 concepts of persuasion was through joining multi-level marketing programs and the like.

Read 33 tweets

Molson Hart

@Molson_Hart

24 Apr

Between 1971 and 2021 the supply of US dollars in circulation has compounded at 7% per year.

🤯

Meanwhile the gross the domestic product of the United States compounded at 6% per year over the same period.

🤯 🤯

This is just staggering to me.

The GDP is quoted in terms of USD. Who would have guessed that GDP growth could be outpaced by the monetary unit that it is quoted in. If you made every $1 bill $2, GDP would double in nominal terms.

Read 4 tweets

Molson Hart

@Molson_Hart

28 Mar

Short thread on people and trust:

The first place I started doing business in was China and I knew I was going to get screwed because it was “China”, a lane of fake products and scams. I had heard the horror stories.

I was right in I did get screwed.

A few years later I came back to the United States and I tried working with a US manufacturer for something that I was previously making in China after my Chinese supplier had screwed me.

Boy was it expensive!

And something very strange happened. I had paid a lot of money for a mold made by an American mold maker and the mold was not working as it should and I told my American supplier that.

And he said “no you’re wrong.”

Read 11 tweets

Molson Hart

@Molson_Hart

26 Mar

@SenWarren

Fun debate going down between @SenWarren and @amazonnews

Let me try to be objective as possible about this:

- Amazon doesn't have the obligation to pay anymore tax than what is demanded upon them and they are outstanding at doing this.

https://twitter.com/amazonnews/status/1375247759414992897

- at the same time, they engage in some borderline dishonest activities when it comes to tax minimization (not evasion). For example, Amazon knew they should've been paying sales tax instead of 3rd party merchants, but they also knew that not doing so gave them a leg up against

brick and mortar retail. So they pointed their figure at the merchants and said "they should be collecting" until the Supreme Court ruled that they had to collect.

- Congress doesn't do enough about Amazon and e-commerce for a couple of reasons:

Read 5 tweets

Molson Hart

@Molson_Hart

26 Mar

Despite my reservations associated with reading books by non-practitioners, I read this, written by a Harvard business school professor. It had a few good concepts.

1) there are two types of innovations: a) sustaining predictable innovation eg fitting more transistors on a microprocessor for a 20% improvement
B) disruptive innovations eg quantum computing.

Big established players are good at former, bad at latter.

(Highlights and underlines are mostly not me. An idiot read this book before I did)

2. This is my favorite insight from the book. Big companies do not go into disruptive innovations because they are a) low margin at the outset b) low quality c) not desired by their current

Read 8 tweets

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