"Why is Amazon's price cheaper than the distributor's price?

Sadostrich914

I have seen people say that amazon prices are cheaper than the distributor's price. I am wondering why this is the case? Is it because amazon is a retailer? Or is there some other reason?I'm curious as to what others think about this. Perhaps I can get some ideas to improve my understanding!

Pat_allen

The simple answer is that Amazon is a much larger company than the distributor, so they can buy the product at a lower price and still make a profit.

However, there are a few other factors at play here:

The distributor may be selling an older version of the product, while Amazon is selling the newest version.
The distributor may be selling the product in limited quantities, while Amazon has a much larger inventory.
The distributor may be selling the product at full price, while Amazon is offering it at a discount.

In any case, it's generally safe to assume that Amazon is selling the product for less than the distributor because they're a bigger company with more negotiating power.

goldengorilla

The simple answer is that Amazon is able to sell products at a cheaper price than the distributor because they buy products in bulk at a lower cost. Additionally, Amazon benefits from a economies of scale, meaning that the more products they sell, the lower their costs become. Finally, Amazon is able to undercut the distributor's price because they don't have the same overhead costs, such as brick-and-mortar locations and staff.