This is true to a degree when speaking directly. Merchants can always choose the price they list something for.
Indirectly, Amazon sort of forces many sellers to raise their prices to compensate though. For example, Amazon charges Selling plan fees, referral fees (the percentage Amazon takes ranges from 8% to as high as 45%, though the average is about 15%, plus they have minimum referral fees), and then there are fulfillment fees on top of all that, which is the cost Amazon charges sellers for packing, shipping, and customer service on the orders (amazon says it’s “Free shipping” but that’s not true…Amazon still forces sellers to pay for it all. There is no such things as “Free Shipping” for any company. Any company that says shipping is free, is actually just adding the shipping cost to the original price, or averaging it out of the average profit margin. Always.
So, say that as a business, a product costs you $50 to make and break even. You could sell it on your own website for close to that amount, or you can list it on Amazon, but if you list it on Amazon, now you have Selling Plan fees, referral fees and fulfillment fees. So your costs for that product are no longer $50…obviously you need to adjust [increase] the price for that because Amazon is going to be taking lots of money from you for each sale and now you need to jack it up 15%-30% just to break even. So you can’t afford to sell it at $55 or you’re going to lose money and go bankrupt. Sure, a seller could technically choose NOT to increase their cost, but that would be suicide if you’re already operating on single-digit profit margins. The same thing happens for subscription type of companies that have an app on Apple App Store or Google Play. Apple and Google steal 30% of the cost of every subscription. So companies are basically forced to jack their prices up an extra 30% or more or refuse to let people add or change their subscriptions through their app. When you purchase something through a matchmaker platform (Apps on iOS or Android, Anything on Amazon, TikTok, Walmart Marketplace, etc, as much as up to 45% of the cost of everything you buy is going to the matchmaker platform, which means the thing you bought could’ve been 15%-45% cheaper for everyone if they weren’t being extorted by fees from the matchmaker platform business model. This is why I like to generally purchase as much as possible directly from a company.
Wyze almost always charges a flat $5.99 in shipping when they charge it at all. In my experience this shipping fee itself is rarely to never “inflated” unless the thing being shipped is abnormally large or heavy. For the most part they do like nearly every other physical product company that leverages a matchmaker platform and averages the shipping and any other costs/fees into the product price average.
I know Wyze has traditionally operated on EXTREMELY LOW profit margins. Way lower than competitors and most companies. I recently asked them in the last AMA if this is still the case and got a response:
So, in over 6 years, they’ve operated at such low-profit margins that they have NEVER even broken even yet, let alone made a profit, even with their subscriptions included. When you buy a low-cost camera from somewhere like Amazon or TikTok, they don’t have a profit margin on that, and sometimes they’re in the red with negative profits on some sales like the OG sales they do a lot. They are not making a ton of extra money off all of that. So I certainly wouldn’t say they are ripping anyone off or inflating their prices. It’s one thing I have always loved about Wyze, that I can feel confident they aren’t ripping me off with high profit margins like some of the other competition. They have always operated on extremely low overall profit margins.
I like the foundation of your comment though. I would love for all companies to show what their actual estimated costs for everything are and the average estimated profit per product. I think it would be very eye-opening for a lot of people to see the profit margins between different companies and see who is actually inflating prices vs selling things near cost.
