From Everything Store to Infrastructure Provider: The Slow Transformation of Amazon

From Everything Store to Infrastructure Provider: The Slow Transformation of Amazon
Photo by Mike Petrucci / Unsplash

Amazon has been the go-to e-commerce destination for millions of shoppers for over five years. But recently, its customer satisfaction has taken a sharp dip, with many customers citing poor search results and low-quality products. What’s the reason behind this? It turns out, the majority of products sold on Amazon haven’t been sold by Amazon, but by third-party sellers. These sellers pay Amazon various fees, as well as cover costs for warehousing and shipping, making their products eligible for Amazon Prime. They also pay Amazon to advertise their products, which is why many listings are sponsored.

In addition, many of these third-party sellers are based in China, making products more affordable, but often of a lower quality. Amazon has also recently pulled back on its private-label products, which have drawn attention from regulators. Now, the company is expanding their reach with “Buy With Prime,” a program that allows third-party retailers to sell through their own sites while using Amazon for package fulfillment and shipping. This suggests Amazon may be looking to become an infrastructure provider for e-commerce, and that selling things to people may no longer be Amazon's main focus.

The transformation of Amazon from an “everything store” to an infrastructure provider has been slow and astounding. For the full story behind Amazon’s new direction and how it affects sellers and brands, read this article from Intelligencer.

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