Don't cry over dropshipped formula
Jeff Bezos won't help you
Art: Bottle, Georges Braque, 1914
When my son was 4.5 months old, he pulled the ultimate baby power move and decided to stop nursing, so we switched to formula. This happened with my daughter around the same time as well, so we thought we were prepared.
There is a whole discussion about the merits of formula versus breastfeeding, just like there is about every single topic in childrearing these days, unless you’re lucky enough never to have set foot in a parents’ forum or Facebook group. But, Normcore doesn’t engage in these culture wars: Normcore is more interested in how Jeff Bezos is screwing us on formula pricing. Read on!
This is how baby formula works. It comes in two varieties: powdered formula that you reconstitute with water, and pre-made formula that is already mixed correctly: all you have to do is open the sealed bottle. In the United States, the production of baby formula is overseen by the FDA, and is probably one of the strictest-regulated foods out there.
Because infant formula is a food, the laws and regulations governing foods apply to infant formula. Additional statutory and regulatory requirements apply to infant formula, which is often used as the sole source of nutrition by a vulnerable population during a critical period of growth and development.
Also in the United States, there is a very strong Big Formula industry, made up of the two giants Enfamil and Similac. There is a war between them for mindshare, and also a whole group of new entrants to the formula industry in the form of startups, because why not try to disrupt a heavily regulated, standardized food item that your baby depends on for survival? Hope they end up using Kafka.
Anyway, I will not be lured away from my original goal, which is complaining about Amazon, to rant about this startup. I’ll cover them once Softbank gets interested.
The Case of the Missing Formula
We buy Enfamil pre-mixed formula, which is only slightly less expensive than ordering Blue Apron and pureeing it on a nightly basis. It’s very easy with Jeff Bezos’s Everything Store to buy this liquid gold whenever we’re running out. But, a couple days ago, I noticed something weird on the Amazon page where I usually buy the formula: it was no longer available from Enfamil, and the price from third-party sellers was more than double what I usually paid.
You may not not realize it, but shopping on Amazon is more like playing the stock market than shopping at your local big box store. Prices don’t just change with the season or when something goes on sale. They fluctuate as often as every 15 minutes.
That's because Amazon and the site’s third-party sellers are engaged in an algorithmically enabled pricing war.
However, it’s one thing to mess around with prices and availability on towels. It’s another to do it on a food that my baby depends on for nourishment every day.
So I went to investigate alternative purchasing options. I checked out Target, CVS, and Enfamil’s website itself, which I’ve never ordered from because it seems less convenient. Target didn’t even have that particular formula listed. CVS had some, but it wasn’t the right size. It was, strangely, completely out-of-stock on Enfamil.com.
I went into panic mode. What was going on here? There was nothing about a recall on the internet. There was no news on the Enfamil website. No one was talking about it on any mom forums, or on Reddit, or on Twitter. It was insanely hard to dig through the marketing keywords to get any information of value, and I came up empty-handed. It seemed highly unlikely that Enfamil would remove such a high-margin and successful product from Amazon. But whatever was going on in the black box where it happens made it seem like that was the case.
I immediately hightailed it to the two local CVSes to see if they had the formula. They did, and I bought every single package that they had.
This took me about an hour, and as I prowled the aisles at the pharmacy, I was refreshing the Amazon page to see if it had reappeared. Reader, this is the closest I’ve ever come to a mental breakdown (and I’m on Twitter on a daily basis.)
In a last bit of desperation, after I made the physical purchase, I ordered one of the last remaining purchase-from-third party-seller, even though I really didn’t want to, and even though it ended up costing me $50.
The next day, there was a box from WalMart on our doorstep.
“Did you order anything,” my husband asked me as we dragged our kipple into the house. “Not from Walmart,” I said.
But the box had my name and address on it. Puzzled, we opened it.
It was the formula I ordered from Amazon.
I went to look on Walmart.com. They still had plenty of the formula available, and for the original price.
I’d been dropshipped.
Dropshipping is usually a term reserved for fashion or accessories or small tech items. What happens is the seller opens a sleek Shopify storefront, makes it look nice, and sell the supposed items. But they don’t actually have any inventory on hand, and when customers make an order, the drop shipper turns around and makes an order at Alibaba or similar, keeping th extra money in the middle.
There’s a great episode about it on Reply All a couple years back, about how all of this works.
ALEXIS: It's a kind of amazing business model, right? Because there's no up front investment, you carry no inventory. All you have to do is get people to see that stuff. This is really the essence of how digital commerce works, just minus caring about the product, knowing what the product is, taking on any risk yourself or any of the other things we associate with business, you know?
PJ: So a thing that, I— A thing that I do not know what to make of, is like... Like this definitely sounds scammy to me, but like on the other hand, what you're describing to me is just like, retail fashion. Like find out what seems to be trendy, find a product that caters to people's interest in that trend, use the power of advertising to locate those people and pitch to them, and then sell them a product. None of that sounds like, unless you think like capitalism is inherently a scam, it doesn't sound like a scam. And yet, there's like–there does seem to be something, an air of scamminess hanging over this. Do you know what I'm saying?
Amazon doesn’t seem to mind, and even has a policy that’s accepting of dropshipping, as long as you don’t package the item in a third-party-seller’s packaging. (Which my formula dropshipper did, thereby ostensibly violating Amazon’s code of conduct.)
However, this is for fashion products like waches. What about when people start drop-shipping formula, or medicine, or other stuff people actually need? The formula order we received violates their policy of being in someone else’s packing material, and it also allows Amazon to charge an exorbitant amount when there’s formula available.
And this specific example, I think, gets to the crux of the current black box Amazon store, and really, the larger ecommerce landscape.
Everything is perfectly fine, until it very much isn’t, and you don’t know where to turn to, because Amazon won’t help you.
I’ve read stories about people getting scammed by sellers, dangerous children’s toys, and fake reviews for fake purchases. There have also been reports of expired formula, among other products. (After reading that story, I now check every single bottle of formula. )
It’s just not a very pleasant experience, as Can wrote in the Marigns yesterday, literally as I was finishing up this post, as if to prove my point,
Every single Amazon purchase now is an ordeal, that makes me feel like I am buying tickets on Expedia in 1999. Every tab on for a product on Amazon has to be paired with various other review sites like Wirecutter and Reddit. There are extensions, ranging from Honey for coupons to Fakespot, to…spot fakes. How insane is that?
What’s more is that this is an even bigger example of the big opaqueness of the online retail market. In a fascinating article in the Harvard Business review from the year 2000, the author woried that the internet would give buyers power,
The real threat [to brick and mortar stores] is what economists call cost transparency, a situation made possible by the abundance of free, easily obtained information on the Internet. All that information has a way of making a seller’s costs more transparent to buyers—in other words, it lets them see through those costs and determine whether they are in line with the prices being charged.
The Net not only arms buyers with much more information about prices, features, and quality than they’ve had in the past, it also reduces the search for that information to a few effortless keystrokes. Ferreting out the same information through traditional shopping requires a lot more time and energy.
Well, we’re now at a point when we have semi-transparent pricing, and we can research and switch quickly, but it gives us nothing in return because all of the features that the author claimed would benefit buyers and completely ruin stores in the internet era have been obscured by the rise of the megaplatform, with all of its inescapable flaws and no real incentive to police it as long as Target and Walmart are in distant second and third place.
In an amazing turn of events, right before I sent out this email, I went to check on formula prices, and they’re back to normal, and Amazon just added this “Lower Priced Item to Consider” option, which was not present before, so I’m back to the Magic Everything Store.
There is no way I can stop buying from Amazon, even if I hate it (which I do.) With two small kids, including one who needs the continuous delivery of the BMW of baby formulas, I just don’t have enough time to go to the store, and Amazon Prime is too damn convenient, even with spikes like this.
Jeff wins for now, but in the meantime I’m aggressively stockpiling formula and starting solids.
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