xandit. There are thousands of internet businesses who hold no inventory themselves. No cash outlay except to maintain their web-site. Everything, everything, goes through them to a fulfillment company who might take care of dozens of catalog type businesses. Your order from Dr. Leonard's or from Improvments Catalog may come off of the same shelf and the billing and customer service taken care of at the same desks. This works excellent for individual purchases. It's a win for both businesses.
Now, in the beginning we tried it with National Fulfillment who managed our inventory, delivering and receiving our dvds to customers, as well as taking care of customer service except for fiscal matters. It didn't work. They didn't have the power to make many decisions. Such as on the spot say they were sorry for this or that and give a subscriber a free month. They couldn't answer inventory questions like when are you going to get my friggin dvd in? They didn't have the dedication, personal interest, that people with a stake in the business have. You couldn't get an e-mail answer to a question that was sent back on a Sunday night at 10PM which obviously had to be JF himself answering, or maybe some other management person. They did not work Saturdays, Sundays, or Holidays. They were not able to swap inventory around as we now can. There are probably many other issues that did not work as well using a fulfillment company. Which is why they retrieved their inventory and let the contract lapse taking the fulfillment and customer services functions in house.
This is not the case with a point to point purchase. There are no, or very few, continuing customer service issues. As there is another company involved your profit margin won't be as high but you don't have to worry about all those unsold games on a shelf that have went out of flavor either. You brought up Amazon, Amazon if an affiliate with Target Stores. Their games come from Gamefly, last I heard. CC with several affiliations besides us, Best Buy with NetFlix, Gamefly, and others. Each is getting a piece of the markup.