Armchair CEO - How Amazon Can Finish Taking Over The Ecommerce World
Look, everyone knows Amazon is the 800 pound gorilla in the ecommerce world. If you sell on Amazon, as I do, you have a love / hate relationship with them. You love them because you can make a lot of money selling on their, but you hate them because you know that selling their is the ecommerce version of feudalism.
If you follow Amazon news at all you also know that they are putting their cthulhu like tentacles into everything, groceries, private label brands, shipping (both domestic & international), and so much more. But what if they had a way to get a strangle hold on the one ecommerce space it seems like they can't touch?
Independent ecommerce stores.
Right now if you don't sell on Amazon (or one of Amazon's many purchased ecommerce properties) then Amazon is just your competitor, nothing more, nothing less.
But what if Amazon could step into that gap and carve out a chunk of the independent ecommerce world? Well they can, in fact it would be easy, they can do it with their little known and poorly adopted tool Amazon Payments.
How can this poorly utilized, mostly unloved (even by Amazon), little tool do something like that?
Gift cards.
Yep, open up Amazon payments to accept payment with Amazon gift cards and you open up an insane world of opportunity. Whenever I shop I would actually prefer to buy off Amazon and while the combination of price and selection (+ Prime shipping) makes sure a lot of my orders will be on Amazon their is actually one other thing that drives almost as many purchases. My gift card balance.
If I want some weird niche widget I will usually check Amazon for it because I have a gift card balance there (from gifts, credit card rewards, etc.) and if not on Amazon I have to decide if I really want that widget. I end up buying about 50% of the time, versus about 80% of the time when it is on Amazon. But if that company could accept my Amazon gift card balance, all of a sudden they too would be bought from 80% of the time.
What does Amazon get out of this?
Well, once they become a payment option on virtually every ecommerce store, and with a small marketing budget they would, they get their cut of all of those purchases. Plus they get a ton of valuable data, I mean I think Amazon would love to know what products that they don't sell are popular, don't you? They can see a ton of data by analyzing those check outs and get the inside scoop on new trends, popular brands, and so on. All things they can use to further their core business.
So, a few percentage points cut on the full ecommerce ecosystem + valuable data = Amazon Wins!
And let's not even get started on if Amazon turns FBA into a competitive third party fulfillment option, that would be truly game over, Amazon rules the world.
What do you think? Would you like to be able to use your Amazon gift card balance on any website?
As an Amazon FBA and Amazon Merch seller I can relate to having a love hate relationship with them. While Amazon is great for buyers Amazon only cares about Amazon. I worry Amazon will basically have all us buyers and sellers help them get to the top and then screw us all really hard. I try to support small ecommerce shops and local business as opposed to always going to Amazon but it's tough when you get free 2 day shipping and the prices on everything is dirt cheap
Yep, it's hard to hate on Amazon when they are the best in the world at serving customers through an Ecommerce store. But still... They are getting so big they are scary.
In my business I am working towards having Amazon independent buyer traffic. I will probably still send that traffic to Amazon to take the order, at least for a while, but I want the option to opt-out when and if I need to.