29
Jan
8

Has Amazon has become the Walmart of the Internet?

Amazon.com runs one of the most successful and dominating online businesses in the history of the internet. But, if you’re smart, you wont use them as an ecommerce platform. Here’s why:

  1. Amazon is competing against you!
  2. Amazon will become a better solution than you!
  3. Amazon will eventually kill you for your market!
  4. Amazon is going to hold your hand while they drown you!
  5. Amazon is hurting everyone else!

1.) Amazon is competing against you!

First and foremost, using Amazon stores to launch your own ecommerce venture puts you in direct competition to one of the fiercest online competitors you will ever encounter. It’s unlikely that you can compete with them on price and shipping options and still make a profit. Since you’re at the mercy of their system, customer support and uniqueness are just an afterthought.

Amazon has a number of reasons for customers to shop directly through them and not through an Amazon store. By driving traffic to your Amazon store, you “will” lose sales directly to them. What’s even more ironic, is that you’re paying them to steal your business!

2.) Amazon will become a better solution than you!

Amazon offer the best return policies, the best shipping prices, and the largest selection of products of any place (less eBay) on the entire internet. With a prime account, I get free 2 Day shipping and $3.99 overnight shipping on everything! I can buy servers (~60lbs each), and save over $500 in shipping charges on only a few servers vs buying from you. I can buy kitchenware, clothes, camping gear, and computers, all with free shipping, all at the same time. Why would I buy from your store instead of Amazon.

3.) Amazon will eventually kill you for the market you created!

Amazon uses their customer’s data, information about product conversions, selling prices, user demographics, and everything else they have access to. Once they have enough statistics, they find lower priced wholesalers or take a loss leader, and start selling the same products as yours. If you reach this point, refer to 1 and 2!

4.) Amazon is going to hold your hand while they drown you!

Through this entire process, Amazon is going to act like your best friend, right up until the point where they bury the steak. I recently talked to a number of former online businesses that suffered this exact above scenario. Only one of several I talked to remains in business, although no longer through Amazon. One of the others had a solid foundation built exclusively on Amazon’s platform for several years. Her along with most of those stores went down being under-priced out of business.

5.) Amazon is hurting everyone else!

Now you can always say that Amazon has the right to sell whatever they want. You’re absolutely right. But allowing them to launch their new sales campaigns based on your data, products, categories, the product reviews that you’ve built up, and hours of your own labor, is a good way to put yourself out of business. It’s no wonder that Amazon is just about the only online retailing company in the entire world that’s still growing rapidly. They’re using their customer’s hard work to launch a blitzkrieg campaign, charging them to do so, putting their own products ahead of all others, and leaving a swath of destruction in their wake.

Now is not the time to sacrifice yourself, or even shop, at Amazon (Walmart of the Internet)! Now is the time to shop at local stores, at local businesses, and small niche websites that represent their retail counterparts. It’s time we all look out for each other and not some shareholders.

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8 Comments:
  1. alex 30 Jan, 2009

    Interesting Caricature of Google

  2. […] I’ll put up a longer post soonish, but I figured I’d link to this rather interesting article about how Amazon is screwing their business customers over. […]

  3. Paul 31 Mar, 2009

    I think you should see a bigger picture what amazon is doing.
    Amazon is changing the game and they are making products to be sold directly by companies who are manufacturing. Yes resellers are going to suffer but that is a new game, there is no need for middle man if its easy anought to do it by your self.

    So you are right Amazon is another wallmart but I don’t mind because i like how they offer products and its effecting only people who are playing the old way.

  4. Web Design Company 23 May, 2009

    This is good and informative

  5. JD 23 Jun, 2009

    You make some very valid points here, this is a quote I got directly from an ex employee from Amazon:-

    …However they have an automated system that changes their price automatically as soon as a merchant undercuts them, so if there are multiple products, they should have the buy box for themselves.

    It refers to products sold on the platform that amazon also stock.

  6. Global Payments 9 Jul, 2009

    I dont think ive ever bought anything from amazon… they never seem to have what im looking for. They mainly seem to have books and i use half.com for those.
    -Jack

  7. Zakir Naz 20 Aug, 2009

    I allways check Amazon first…! I love buying from that site – have been since the very beginning.

  8. Sam 10 Dec, 2013

    I personally love selling on ebay, they do take a fees cut but its well worth it and its much much more reasonable than amazon. Especially when you are a top rated seller with a store, ebay gives you the chance to own the customers you earned and to better build a brand, unlike amazon they actually encourage that. eBay is becoming over looked because amazon is “supposedly” the next thing but what boggles me is that I have the same products listed on ebay and amazon but I sell 10 times more on ebay, and what boggles me even more is I have more people returning stuff on amazon !! Exact description !! feedback on Ebay is 1000+ GLOWING , feedback on amazon 9 as of today lol i have been in business for 8 Months,

    Bottom line
    eBay drives its success from the success of sellers, they need you to make money but you have to be good, ecommerce is not a play area for small sellers anymore, high qty low margin.

    Amazon needs content + traffic + customers , you can help them with that, they will throw you some crumbs, but when you grow they will step on you because they never needed you in the first place.

    eBay has actually saved my life, from jobless to a person who might start hiring soon :))

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