Issue No. 102: Disney hedges, social-commerce falls flat, and Stop with the Instagram product placement

Last Word: On Overcoming Amazon’s Influence As A Small Online Retailer

If you’re less than four years old and you’re not named Jet.com, the quick answer is that you cannot. The more nuanced answer is that Amazon can be a competitor (not smart) or it can be an amplifier (smarter).

Via Ben Thompson, Stratechery.com:

That is Amazon’s business in a nutshell: massive investments in fixed costs in an attempt to minimize marginal costs. Some businesses, like AWS, are naturally leveraged: you buy and equip a data center that can be used by multiple customers; the more customers using said data center the more those fixed costs can be spread out. What is so, frankly, awesome about the e-commerce business is that the company is pulling off the same trick: Amazon has and is making massive investments in fixed costs like distribution and sortation centers (now 145 worldwide), increased automation, even planes and eventually drones, and then increasingly charging sellers on a marginal basis to use that infrastructure; Prime, meanwhile, both provides an annuity-like funding source even as it significantly increases the volume of purchases.

Via Business Insider:

In September 2015, Shopify partnered with Amazon to allow merchants to seamlessly set up their own seller profiles on Amazon’s marketplace. Additionally, Shopify merchants can add a “Login and Pay With Amazon” option on their own e-commerce sites to remove friction from the payments process by pulling shipping and billing information via Amazon accounts.

Amazon may not be how you catalogue your product. Eventually, it may be how your product is carried from your local shipping center to your consumer – by drone. Eventually, you may advertise on Amazon. It’s Chinese counterpart, Alibaba, raked in $6B in display ads in the previous fiscal year. You may use Amazon’s Prime planes to move your products from your east coast warehouse to that on the west. Or it may be how your consumers checkout faster, removing the barriers to sale that have plagued small retailers for years.

See more of the issue here.

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