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The Limits of Amazon
Jan. 1, 2018 | WSJ | By Christopher Mims.

Amazon’s core mission as a data-driven instant-gratification company. Its fanaticism for customer experience is enabled by every technology the company can get its hands on, from data centers to drones. Imagine the data-collecting power of Facebook wedded to the supply-chain empire of Wal-Mart—that’s Amazon.

There is one major problem with the idea that Amazon-will-eat-the-entire-universe, however. Amazon is good at identifying commodity products and making those as cheap and available as possible. “Your margin is my opportunity” is one of Chief Executive Jeff Bezos’s best-known bon mots. But this system isn’t very compatible with big-ticket, higher-margin items.....

How Amazon Does It
Amazon now increasingly makes its money by extracting a percentage from the sales of other sellers on its site. It has become a platform company like Facebook Inc. or Alphabet Inc.’s Google, which serve as marketplaces for businesses with less reach of their own.....Eventually, Amazon could become the ultimate platform for retail, the “retail cloud” upon which countless other online retail businesses are built....Think of Amazon as an umbrella company composed of disconnected and sometimes competing businesses, though critically they can access common infrastructure, including the retail platform and cloud services.

Ultimately, these smaller businesses must feed the core mission. Amazon’s video business isn’t just its own potential profit center; it’s also a way to keep people in Amazon’s world longer, where they spend more money,

What Amazon Can’t Do
Ultimately, the strategies that allow Amazon to continue growing will also be its limitation. “If the platform needs to be one-size-fits-all across many, many different product categories, it becomes difficult to create specific experiences for different kinds of products,”
contra-Amazon  Amazon  strengths  data_driven  instant_gratification  customer_experience  platforms  one-size-fits-all  limitations  Jeff_Bezos  weaknesses  commoditization  third-party  Christopher_Mims 
january 2018 by jerryking
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