Give an Amazon Reseller Exclusivity?

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A friend called me this afternoon perplexed by a situation with his resellers. He wholesales rubber duckies. (Don't laugh, he does extremely well, has brought manufacturing of the back to the USA and is now exporting a made in the USA duckie to China!)
One of his resellers has won the top spot for fulfillment (I know there's an Amazon term for it) and has asked that he be given an exclusive, to be the only one selling the company's duckies on Amazon.
The other resellers aren't exactly happy. The main reason being that not selling on Amazon will close the doors to the other places where they sell.
The first guy says my friend won't lose business by giving him exclusivity. The other guys are saying he will.
My friend isn't an online researcher/forum poster. He called today asking my opinion since I only have one exclusive to me product on Amazon I don't have the experience to give him any guidance so I offered to post here. Do any of you have any wisdom for him?
#ecommerce sites, wholesaling & drop shipping #amazon #exclusivity #give #reseller
  • I would think his brand would have much more exposure with multiple resellers marketing his product on Amazon. Therefore, his sales would increase.

    If he wanted to only have one company marketing his products on Amazon, it would be much smarter to block ALL companies and list them on Amazon himself (surely his wholesale price is less than the effective rate of 12% that Amazon collects).

    What is this other company using for leverage to make him contemplate such a strange thing? Are they willing to pay him more for his products? That's the only leverage I can think of.
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  • Well, the first question I would ask is what is his total profit from this reseller compared to his profit from all other resellers on Amazon?

    The second question is, what are the consequences if he says no? Is the guy going to stop promoting his product?

    The third question is, why did he tell his other resellers? Seems very stupid.
    • [ 1 ] Thanks
  • This is super helpful. I'm passing the link along so he can read what you wrote. Much appreciated!
  • The potential problem I see with having multiple resellers is that they could bid each other down to barely above wholesale price + Amazon fees, and this effectively devalues his product and could even hurt his ability to make wholesale contracts off Amazon.

    Does it appear that your various wholesale customers are having a price war on Amazon? Or are they all selling at suggested MSRP? Perhaps you already have something in their wholesale contracts that says they can't sell for below a certain amount?

    I'm not sure that you're getting any more exposure by having lots of people selling it on Amazon, because with Amazon it's still just one listing. Unless it helps with SEO somehow.

    Now, I'm curious what you mean when you say that closing the door for Amazon sales would limited their ability to sell through other channels. Is this because they're using fulfillment by Amazon through other marketplaces?
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    Give an Amazon Reseller Exclusivity?

    A friend called me this afternoon perplexed by a situation with his resellers. He wholesales rubber duckies. (Don't laugh, he does extremely well, has brought manufacturing of the back to the USA and is now exporting a made in the USA duckie to China!) One of his resellers has won the top spot for fulfillment (I know there's an Amazon term for it) and has asked that he be given an exclusive, to be the only one selling the company's duckies on Amazon. The other resellers aren't exactly happy. The main reason being that not selling on Amazon will close the doors to the other places where they sell.