This is probably US-only, dunno.
I just found out from a friend who's family sells an obscure "medieval weapon reproduction" that Amazon now offers this item as Prime. They are shipped 10 at a time to Amazon to be held in the distribution centers. Amazon does not buy them, they just handle fulfillment, take a cut and then send him a check when one sells.
It's called FBA (Fulfillment By Amazon)
http://services.amazon.com/content/fulfillment-by-amazon.htm
From what I understand it ends up being a pretty good deal if you have the right products. Also worth noting, they can ship for you whether you sell your product on Amazon or not.
From what I understand if the product works long term (ie its not a fashion) and the volume is high enough. They source it themselves.
Amazon are not prone to leaving money on the table.
Niche, (10 at a time) sounds a good place to be.
> They source it themselves.
Yeah, I am hearing this too, it's like dancing with the devil.
>good place to be
Yeah, in this case he's actually sold his "craft" business to an apprentice and kept the domain and amazon contact so he's now a middleman.
If an item requires a specialty or craftman's art, this would be the way to go.
We looked at this a few years ago for a merchant I work with. His problem is that his catalog is very broad and he sells just a small number of each item, which is a bad fit for FBA.
As I recall, it's a good fit if you have a narrow product line with volume in the sweet spot - enough to make the fixed costs worth it, but not so much that the marginal costs are so high you could do it yourself. In the case of the merchant I work with, they would have had too much inventory tied up at Amazon and too much shelf space.