More retailers are turning to Amazon as a wholesaler, with lines from brands including Heinz and Coca-Cola generating £2,600 in annual savings and 60% higher margins than Booker and Costcutter.
Analysis of products purchased by retailers through the online marketplace’s basic account found they were significantly cheaper than some national wholesalers. Heinz Baked Beans 24x415g cost £21.99 through Amazon, in comparison to £27.89 from Booker and £29.99 through Costcutter. When charged at Booker’s £1.55 RRP, margins on the Amazon products were 38% and 60% higher.
Similarly, 24x500ml Coca-Cola cost £20.01 through Amazon, offering a 64% margin when sold at Booker’s £2.35 RRP. The same product would generate a 28% and 53% lower margin when bought through Booker or Costcutter, respectively. All prices included VAT.
Read more: Opinion: A lot to be learned from Amazon’s business model
Retailers told our sister website Better Retailing the prices could potentially be even cheaper through an Amazon Business account. A case of 20x25g Walkers Classics (£3.50 case price) would generate 46.07% margin through Amazon, compared to just 25.12% margin through Booker.
Jonathan Cobb, of Miserden Village Stores in Gloucestershire, has been using Amazon for more than a year. He purchases five cases of Coca-Cola at £10 cheaper per case than Booker, equivalent to an annual saving of £2,600. He told BR: “I use it for Heinz Baked Beans and Coca-Cola, which are much cheaper than any other wholesaler. The margins are massive in comparison.
“You can order in single quantities, which benefits us being a very small shop. I’m just using the basic Amazon account because I can’t sign up for a Business account for some reason, but the discounts are still significant. The prices are variable, however, so you do have to check each time. Amazon can also add higher discounts the more you buy. There’s no minimum order quantity and I can get stock the next day if we run out of something.”
