Amazon (sub)Prime? allows any third party to supply inventory into commingled stock. By Izabella Kaminska

Amazon (sub)Prime?

By Izabella Kaminska
Mar 20 2019
<https://ftalphaville.ft.com/2019/03/20/1553085361000/Amazon–sub-Prime-/>

The following is the first in a two-part post about Amazon’s dependence on an obscure process known as commingling, which has become essential to underpinning its instant fulfilment services, especially its Prime offering.

If you work in finance, the concept of commingling and its cost benefits will be instantly recognizable. But so will its risks.

And it’s these sorts of risks that are now creeping into the entire Amazon system due to the online retailer’s open-ended fulfillment structure, which allows any third party to supply inventory into commingled stock.

Not only is commingling becoming a means by which a huge number of sub-par or counterfeited goods are entering the Amazon network, it’s arguably the reason why Amazon is being forced to take increasingly extreme steps to take control of its suppliers.

As it does so, it turns itself back into a conventional vertically-integrated retailer like Tesco or Walmart, losing much of the scaling, and cost advantages, associated with its “Fulfilled by Amazon” model (FBA). This also forces an ever greater “unapproved” seller network to deal in the increasingly cut-throat dynamics of its wider marketplace offering. 

The consequences of all this, as we will explain, are glaring.

Unless you make your money from selling stuff on Amazon, chances are you won’t have heard of an FNSKU. The acronym stands for Fulfilment Network Stock Keeping Unit and represents a location identifier for products sitting in Amazon warehouses. This, to all intents and purposes, equates to an Amazon barcode. 

If you’re a seller on Amazon’s marketplace who has chosen to be fulfilled by Amazon’s warehouse system (a scenario which sees Amazon dispatching the seller’s products on their behalf from its warehouses) you will always need an FNSKU.

Apart from the times you don’t.

At such times all you need is a manufacturer code. And it’s these instances, sellers tell FT Alphaville, that are introducing a counterfeiting vulnerability into the Amazon system.

Not using an FNSKU is appealing for sellers. It means products sourced from manufacturers do not have to be relabelled, ensuring they can be sent into Amazon’s network directly, saving time and money. Sellers who have chosen to be fulfilled by Amazon otherwise add an additional logistical layer into their operations if they have to relabel the goods independently. 

Using manufacture bar codes also means products are more likely to qualify for Amazon Prime classification, pushing them higher up the search rankings.

Sellers tell FT Alphaville that, as it stands, the Amazon system seems to structurally incentivise the use of manufacturer codes over FNSKUs as a result. Indeed, Amazon itself promotes the fact that the process speeds up delivery in its own literature:

If multiple sellers have inventory with the same manufacturer barcode, Amazon may fulfil orders using products with that barcode when those products are closest to the customer.

This happens regardless of which seller actually receives a customer’s order. We use this process to facilitate faster delivery.

COMMINGLING

But there is an important downside. Not using FNSKUs turns sellers’ products into cold, hard commodities which are treated as fungible with equivalent products sent into the system. This happens because of a process called commingling.

How does commingling work and why is it important to the Amazon Prime model?

If you have ever wondered how it is possible for Amazon Prime to guarantee 24, or 48, hour delivery for a hugely diverse range of products, the answer is commingling.

In its simplest and idealised form, commingling allows sellers to share inventory to the mutual benefit of all, especially with respect to speed of dispatch.

The larger the geographic area, the more effective commingling becomes. In the US, for example, a seller who supplies an Amazon warehouse in Florida can — thanks to commingling — fullfil a customer living in Minnesota as easily as customers in their home state.

To explain, consider that the time it might ordinarily take to deliver to a Minnesotan from Florida is bound by the physical limitations of travel. In other words, there’s no way a parcel can arrive more quickly than via a plane. That’s its effective speed of light limit.

However, if the buyer’s parcel can be dispatched from an equivalent commingled stock just around the corner, this theoretical speed of light limit can be broken.

<SNIP>

<If you label your commingle units by printing labels from your inventory page, and ship them with labels where you said to commingle, Amazon will likely delay your items being received and provide a warning to you about shipping items with labels when you said you want to commingle your inventory.>

<There are some inherent risks involved with using the stickerless commingled inventory option.  The main risk is the loss of control of the item that the end customer receives.  In addition to this there is the risk that there are counterfeit products that were sent in by other sellers, or sellers that are trying to pass off items as new that should be listed as used.  The problems arise when one of these counterfeit items or less than new items are sent to a customer that orders from you.>

<august 12, 2017
I ordered the top-rated eclipse glasses on Amazon a few months ago and they were counterfeit. If you put them on during daytime you can see indirect sunlight and even my kitchen light. They were shipped from China despite having “Made in the USA” markings and all the proper ISO certification fine print. I haven’t received any communication from Amazon, so people who haven’t heard from them should not assume their glasses are safe (contrary to Amazon’s statement). I contacted Amazon support and they were quick to initiate a refund. For some reason Amazon rejected my review warning that items from third party sellers may be counterfeit and explaining how to tell.
Here are a couple photos of the counterfeits>

The Success of Unions vs. The Monopolies

Background of the  Federation of Organized Trades and Labor Unions

The American Federation of Labor
Founded: December 8, 1886 was a national federation of labor unions in the United States founded in Columbus, Ohio, in December 1886 by an alliance of craft unions disaffected from the Knights of Labor, a national labor association.

American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), American federation of autonomous labor unions formed in 1955 by the merger of the AFL (founded 1886), which originally organized workers in craft unions, and the CIO (founded 1935), which organized workers by industries.
https://chroniclingamerica.loc.gov/lccn/sn83045211/1919-09-15/ed-1/seq-3/

The eight-hour-day movement

 

Davos Billionaires Keep Getting Richer
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U.N. Rights Chief Warns Of Threats From Inequality

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90% workers in Silicon Valley are worse off today despite two decades of unparalleled tech biz growth.

The Revolving Door

GOOGLE
DARPA’s Regina Dugan Joins Google 2013
Her push into crowdsourcing and outreach to the hacker community were eye-openers in the often-closed world of military R&D. Dugan also won over some military commanders by diverting some of her research cash from long-term, blue-sky projects to immediate battlefield concerns. ~ wired.com

#AMAZON Corporation Welfare Queen Leeches

Not 1 dollar paid in taxes from the Richest Man in America thanks to their loopholes from bankrolled politicians and their lobbies.

amazon #Loophole that allows @jeffBezos #Amazon get away with NO #TAXES

amazon Why should Amazon the Welfare Queen Corporation that contributes nothing get tax break welfare from the state.

amazon Amazon, Facebook, Google, Apple,ETC are all MONOPOLIES with the SAME power of the British East India Company.

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amazon Retail pharmacy and drug distributor stocks are on the move after Amazon’s announced acquisition of online pharmacy startup PillPack.

amazon Competition, Civil Liberties, and the Internet Giants

Selling Your Data

►!!!!!! Documenting all the places personal data goes.
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What do they mean when people say Capitalist or they say Socialist?

What do they mean when People say he/she is a Capitalist or he/she is a Socialist?

Capitalism is about being able to make as much money as you can legally. Billionaires, the .01% got there because of generational untaxed wealth, they also hid their money in offshore tax havens.

ICIJ’s investigations

Hidden in 11.5 million secret files are 140 politicians from more than 50 countries connected to offshore companies in 21 tax havens.

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Corporate Monopolies

#Amazon, #facebook, #Google, #Snapchat, #Instagram

got there through paying off the politicians who allowed antitrust law to atrophy.  Antitrust Law has not kept up with technology in 2020.

 

The politicians who equate Freedom with capitalism that supports monopolies are not taking care of the needs of America and democracy. They are voting their own business interests before that of welfare of 99% of the country.

United States Falls Deeper Into Corrupt Nation Status By Pam Martens: January 29, 2019
The U.S. is no longer in the top 10, or even the top 20, of least corrupt nations. Transparency International’s Corruption Perceptions Index for 2018 was released today and the United States has fallen four points deeper into corruption than last year. The U.S. now ranks below Luxembourg, Estonia and France, coming in at number 22 on the chart. In the Americas region, only Canada came in among the top 10 least corrupt nations, earning a number 9 ranking. (View the full list here.) Zoe Reiter, Acting Representative to the U.S. at Transparency International said this about the report: “A four point drop in the CPI score is a red flag and comes at a time when the US is experiencing threats to its system of checks and balances, as well as an erosion of ethical norms at the highest levels of power. If this trend continues, it would indicate a serious corruption problem in a country that has taken a lead on the issue globally. This is a bipartisan issue that requires a bipartisan solution.”

 

Senator Bernie Sanders Should Be Taken Very Seriously as a Presidential Candidate
By Pam Martens: February 21, 2019 ~

On Tuesday, Senator Bernie Sanders of Vermont declared his candidacy to seek the Democratic nomination for President of the United States.

Wall Street On Paradeendorsed Senator Sanders over Hillary Clinton in 2016because Clinton was effectively running as Wall Street’s candidate and as Obama’s third term. Unfortunately, eight years of Obama had produced zero criminal prosecutions of the executives of the largest Wall Street banks who had brought the country to its knees as they grew obscenely rich from corrupt, cartel behavior at their banks. Obama also seriously misinformed the American people about how little had changed in terms of reining in the risks on Wall Street. Obama also refused to provide a bully pulpit for breaking up the dangerous Wall Street banks by restoring the Glass-Steagall Act.

Bernie Sanders explains Democratic Socialism

GOP Pence attacks ‘socialism’

Mike Pence Secures the No Law Zone Around Wall Street By Pam Martens and Russ Martens: October 25, 2017 Millions of Americans have quietly been pondering for months what a President Mike Pence would be like should Donald Trump be impeached or resign. Yesterday they found out and it’s not a pretty picture. After the U.S. Senate tied 50-50 on a vote yesterday, Vice President Mike Pence cast the deciding vote to keep the nation’s courthouse doors closed to the customers of the Too-Big-to-Fail banks on Wall Street – effectively strengthening the no law zone that already exists for these banks. The vote came about as a result of the Consumer Financial Protection Bureau (CFPB) issuing its final rule in July which would allow consumers who have been defrauded in financial transactions involving credit cards and bank accounts to have access to file a group action (known legally as a “class action”) using the nation’s courts.

Senator Bernie Sanders’ Banking Bill and the Kavanaugh Confirmation By Pam Martens and Russ Martens: October 8, 2018

Last week when Senator Bernie Sanders introduced a new banking bill to break up the mega banks on Wall Street, he had this to say: “In our nation today, we are moving toward an oligarchic form of society where a small number of very wealthy individuals and large corporations have enormous control over our economic and political life. Today, we are in a country where three people, three of the wealthiest people, own more wealth than the bottom half of American society and 52 percent of all new income is going to the top 1 percent.” Sanders made this statement on October 3.

Just three days later, on October 6, a thoroughly discredited nominee for the U.S. Supreme Court, Brett Kavanaugh, who had the financial backing of a front group funded by billionaires Charles and David Koch, Americans for Prosperity, was installed on the U.S. Supreme Court. This marked a new milestone for the oligarchs. There was no longer any need to mount even a pretense of representative government. Kavanaugh’s confirmation was opposed by 2400 law professors from a wide array of universities; the National Council of Churches, which represents 100,000 congregations and over 40 million individuals; former Supreme Court Justice John Paul Stevens; and tens of thousands of Americans who protested in cities across the U.S.

In 2019, Wall Street Banks Will Determine the Future of America By Pam Martens: January 2, 2019

In short, Americans have gotten both the stock market and the government they deserve for failing to meaningfully reform both following the epic 2008 financial crash which pointed so clearly to unprecedented corruption on Wall Street and within the corridors of power in Washington.

Americans’ failure to demand real reform of what Senator Bernie Sanders has correctly called a business model of fraud on Wall Street means that those same behemoth Wall Street banks that crashed the financial system in 2008 are even more dangerous today. For its part, the Trump administration has become a willing enabler to Wall Street’s financial hubris by putting its former lawyer, Jay Clayton, in charge of the Securities and Exchange Commission and a former foreclosure king, Steven Mnuchin, in charge of the U.S. Treasury and the Financial Stability Oversight Council.

Wall Street banks have now grown so massive and interconnected that they are in a position to determine the very future of this nation. The big banks’ share prices are signaling that the day of reckoning is coming in 2019.

Wall Street Banks Are Trading in Their Own Company’s Stock: How Is This Legal? By Pam Martens and Russ Martens: February 15, 2017

House Oversight Committee