3rd Party Products on Amazon: Should You Buy Direct?

If you're shopping on Amazon.com and find a product you're interested in buying that's sold through a 3rd party, you have two choices:

1. Buy the product directly from Amazon.

2. Head over to the 3rd party's own ecommerce site to buy the product directly from them.

Which choice is the right choice? As far as I can tell, #1 is the better way to go. Here is one example of why that is.

The other day, I purchased some bike pedals on Amazon for $49.99. They were listed on Amazon by Bike Nashbar, so after my order was submitted, Amazon kicked the order over to Bike Nashbar for fulfillment. Amazon makes a commission on this sale and Bike Nashbar gains a sale by leveraging the power of Amazon's brand and audience. Everybody's happy.

But wouldn't it be cheaper if I jumped over to Bike Nashbar's site? No. Here is what I found:

The pedals on Amazon were $49.99 with $6.75 shipping:

The same pedals on Bike Nashbar were the exact same price, but the shipping was higher ($7.25 vs. $6.75 when ordered on Amazon):

I'm pretty sure that Amazon's contractual relationships with companies like Bike Nashbar forbid the 3rd party sites from undercutting the pricing they submit to Amazon's store. While the shipping was higher buying direct, that won't always be the case. But that's not the real cost difference.

The true cost is time, measured three ways.

1. Amazon already has my shipping and billing information on file, so I save time by not having to register with yet another ecommerce site in order to make my purchase.

2. With every new site I register with, I can expect another set of marketing emails to start hitting my inbox.

3. Consolidating my purchase history allows one site to provide better recommendations to me down the line, speeding up my shopping and improving my satisfaction.

Amazon is really in the driver's seat here. They're taking a fairly significant cut on every purchase made through one of their 3rd party vendors and they don't have to ship anything. And for every purchase made on their site, the odds of additional purchased by the same customer goes up. That's one heck of a strong business model.

Ed, I think your article missed out on the most IMPORTANT aspect of why we should or should not buy directly from the 3rd party which is what I was actually looking for in here. You probably have not purchased too many online items to run into this issue.

What if there is a problem with the merchandize? Are you in any way BETTER protected if you go through Amazon?

I am trying to buy a product which is offered cheaper at the 3rd party site, but the site has sort of a semi-shady reputation and ship the proper goods with honesty and integrity (they advertized the product as new but they are known to send open box products as new products).

DP, I haven't run into the issue you describe, but one thing that does bother me about 3rd party vendors is ending up on their mailing lists. If I was to buy 5 things on Amazon and they were shipped from 5 different vendors, I could conceivably end up with 5 additional catalogs in my mailbox per month.

Comments

1. Posted by: Chee Kui on June 16, 2007 10:02 AM:

I never thought there will be any difference on shipping price. Thanks for the revelation, Ed ;)

As for me, it depends actually. If I trust the merchant, I will definitely go straight to their site ;)
But, now that you mentioned I can save money and time by buying the product on Amazon, of course I will go for the latter.

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