Seeing prices go up doesn’t mean there’s demand for them. If demand is low, then this isn’t a market failure, it can make perfect sense that products with low demand don’t get large companies producing them and so the prices don’t reflect economies of scale.
So let’s look at the actual sales. I’ve sold a bit on Amazon and know some tools that can give you good estimates on how many sales an items has had.
https://www.amazon.com/dp/B000GCECRO/, the Tum brand, is ranked 33,992 in Health & Personal Care (https://archive.is/cP0k4). Junglescout estimates 122 sales a month. Another source I checked says 91 a month, so 100 a month is probably close. Now, maybe it would sell more if the price was lower? Sales rank when the price was lower seems to have been in the 10-20,000 range, or 200-300 sales a month.
Let’s say there are 2000 sales a year, if you offer it at $5 and make $2 profit on each you’re making $4,000 a year. That doesn’t seem enough for a large company to deal with. (You should also account for sales at other locations, though. But you pointed to Amazon of proof of demand, when it can simply be proof of lack of supply and lackluster demand.)
I don’t actually know what thresholds companies tend to have for keeping products alive. If you have better information on that it would be helpful.
Seeing prices go up doesn’t mean there’s demand for them. If demand is low, then this isn’t a market failure, it can make perfect sense that products with low demand don’t get large companies producing them and so the prices don’t reflect economies of scale.
So let’s look at the actual sales. I’ve sold a bit on Amazon and know some tools that can give you good estimates on how many sales an items has had.
https://www.amazon.com/gp/product/B00REF5PM2/, the generic currently selling for ~$30, is currently ranked 246,691 in Health & Personal Care (archived: https://archive.is/5RRNF) (this number fluctuates, so might be different when you look). According to http://junglescout.com/estimator , such a rank sells less than 5 a month. Other tools I’ve checked have similar results, under 5 a month.
https://www.amazon.com/dp/B000GCECRO/, the Tum brand, is ranked 33,992 in Health & Personal Care (https://archive.is/cP0k4). Junglescout estimates 122 sales a month. Another source I checked says 91 a month, so 100 a month is probably close. Now, maybe it would sell more if the price was lower? Sales rank when the price was lower seems to have been in the 10-20,000 range, or 200-300 sales a month.
Let’s say there are 2000 sales a year, if you offer it at $5 and make $2 profit on each you’re making $4,000 a year. That doesn’t seem enough for a large company to deal with. (You should also account for sales at other locations, though. But you pointed to Amazon of proof of demand, when it can simply be proof of lack of supply and lackluster demand.)
I don’t actually know what thresholds companies tend to have for keeping products alive. If you have better information on that it would be helpful.
It’s great to have somebody who actually knows how the numbers at Amazon work elaborate on the subject :)