Thursday, March 05, 2009

Amazon Gets Into the Buy Back Business.

Sometimes great ideas just take resources to make them happen and when you are Amazon, you have a ton of resources.

Today we find out, thanks to ZDnet, that Amazon is now in the Buy Back business, though they call it Trade-In. Consumers can trade-in their used video games to Amazon in exchange for a credit on Amazon for future purchases. Could DVDs, CDs, Books Consumer Electronics be far behind.

It isn't clear what Amazon does with the used Video Games once they have them, but rumors have circulated that they are working on a program, where they will begin selling used "Certified Used " video games and compete directly with their 3P merchants in the used space. 

My guess is they would not sell them directly under the Amazon name but more than likely through the Warehouse Deals business, which currently handles returned merchandise, etc.

Tin Hat Warning!

I don't want to be an alarmist here but this opens the door for Amazon to compete against their 3P merchants and my guess is that won't go over well.

I know this idea works because I bought back used media this way. When Amazon gets into this business it gets a little scarrier for 3P Merchants in the media category.

Just my 15%

8 comments:

Henrietta said...

That tin hat thought did cross my mind as I read it.

There goes a source for merchants who buy to resell. Amazon would presumably refuse to pay or offer credit for damaged or non functioning product.

This will be an interesting development to watch. I can't imagine it would be a worthwhile ROI to Amazon unless their prices were rock bottom low.

Do you forsee people asking for a price estimate from both Amazon and independent resellers? More overhead costs all round.

Interesting.

Sachin Agarwal said...

Randy, I'm positive I told you this was going to happen at the Ramada on the South Side of Chicago last year. I've been very clear that Dawdle's competitive advantage versus Amazon was that 1) we're non-conflicted and 2) we don't do sweetheart deals or favor our largest sellers. People who use Buybak now are competing with Amazon on acquisition. They need to look at other channels - such as Dawdle - to diversify. This isn't a tin hat thing; this is how Amazon operates. Their competitive advantage (cause, remember, they compete with Wal-Mart) is data acquisition and analysis. The more you rely on them, the more they can turn around and bite you right back.

Anonymous said...

Makes me glad I left 3P selling on Amazon when I did, in pursuit of growing my other couple sites! Successfully, might I add!

I should check the Amazon Seller Forum to see what they have to say about this! As a matter of interest. Knowing that bunch of cliquish barracudas, they can't be happy!

Don't get me wrong, Amazon was a great venue and I have NO regrets!

Anonymous said...

Sure its cannibalistic. But at least Amazon is willing to touch and handle product. And embraces used items. That puts it two notches up from Ebay. Theoretically of course. In practice, they're a lot higher than that.

Sachin Agarwal said...

Anonymous, Amazon isn't touching used product. NorAm is. They're favoring one particular third party media seller over all others.

Randy Smythe said...

Sachin,

Hopefully some of that product will end up at Dawdle. Amazon isn't taking 100% of it.

Anonymous said...

Toysrus announcing testing used game buy backs, and HMV starting to get into it in some markets.

Seems a little late? how long until the b&m retailers get cut out of games altogether with download content? Sony already selling some titles with its game share thing at a fraction of the price.

Karl said...
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