Amazon Interview Question: One of your vendors typically... | Glassdoor

Interview Question

Associate Vendor Manager/Brand Specialist Interview Seattle, WA

One of your vendors typically sells you a widget for

  $100, but is offering a discount of $80/widget when you buy 500 all at once. Would you accept the deal and what would be the process behind your decision?
Answer

Interview Answer

1 Answer

33

This depends… What’s our original target margin for when we sell it to our customers? In other words, what’s the retail price? By getting a $20 discount per widget, what’s the incremental increase in our margin?

We would also need to consider demand from these customers; we would purchase 500 widgets all at once if we’re sure that we can sell them all to our customers. How many widgets do we usually buy at once so that we can sell all of them to our customers in a set time period? Is this a seasonal product where we must sell our entire inventory before the season is over, or else it becomes obsolete? If 500 widgets were too many to order, and we’d have to sell half of them at a 50% discount, would we still hit our revenue target for the widgets?

Jingcong on Dec 23, 2013

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