Common Myths About ECommerce Is Not Living Up To Its Promise.
E-commerce was supposed to cut out middlemen and allow businesses to sell directly to consumers , who can purchase with ease at reasonable and transparent costs. However, this hasn't actually occurred. Amazon's marketplaces have been inundated with unsafe and even fake products (see Wall Street Journal). They aren't always the most cost-effective or reliable alternative, particularly with the increasing sales at Walmart and other major retailers. There's even a specialty called "amazon retail arbitrage," which is the practice of purchasing products from retailers and then loading them onto FBA through Amazon and making money off the price difference. If you consider this, the product is delivered from a factory to a retailer and later purchased, then delivered into an Amazon warehouse before being shipped to the customer. Strange, yet profitable and an actual business sector.
There are many reasons for why price discrepancies occur. The main reason is the search engines. Online retailers invest a lot or rely on SEO to get high rankings on search engines in lead generation. If you're considering buying it, I'm guessing that the majority of people begin with the search engine. In addition, I'd suggest Amazon search as a good product search engine , particularly considering all paid placements within the results.
Localized Pricing Athletic and sportswear brands are known for charging different prices according to the location world. The retail sites typically redirect customers to a localized version the online store, where prices, variety and discount availability can vary greatly. This has created an industry of freight forwarding services that cater to retail customers looking to deliver their US online purchases to their destination of choice for a cheaper price than consumers can shop on their own. Imagine the double handling that is involved. As time passes, I believe we'll see all the online companies considering global from the beginning. Numerous startups have raised funds to deal with global fulfillment and return issues that allow smaller businesses to provide global delivery.
Low Quality Brands The majority of lower-value products that are poorly-branded that are sold on Amazon (or similar) are simply rebranded products directly from the manufacturers from Asia or purchased through Alibaba (or AliExpress) and just warehoused and marked up in the local region. The rise of Alibaba has been a boon for cutting out some middlemen but there's a lot of inefficiency. Brands that are low quality, in which there is a lack of real input in the development of products, their design or the branding is particularly difficult to comprehend their durability. For instance, there are several iPhone brand cases that simply repackage previously manufactured iPhone cases that they purchase directly from the suppliers on Alibaba. The rise of Instagram brands is not helping the situation.
Drop Shipping Drop shipping, possibly the most "intermediary" business model within the eCommerce market, seems to still be an acceptable business model (although is much more competitive than it was). I believe these opportunities are being utilized by companies that are building lighter brands, and selling directly on Amazon or similar platforms.
Price Comparison Websites There's a large market of price comparison websites, particularly in the energy industry - which allow consumers to evaluate tariffs from different companies. The site is located in New Zealand, the local government even aided in funding websites to benefit consumers. Flipper is an interesting twist on the model of price comparison for energy, which automatically switches customers to the most affordable monthly rate - there is no need for paperwork or input from the customer. This approach is great when it comes to homogeneous products like power or gas, in which there is a minimal variance in demands from consumers. If it's a physical item this model should work but the variety of suppliers is huge and the variety of options (size and colour) are innumerable.
How does this end? I am assuming that markets (like Amazon) will continue to expand their range, but will eventually simplify and personalize the user experience. Issues with quality will eventually be addressed. Individual brands (operating in markets outside of these) must be globally oriented from the beginning and become more 'high touch and sophisticated than they have ever been before. Brands that are less sophisticated will be completely from the scene. Most likely, the most disruptive change is due to direct-to-consumer companies that are addressing a narrow, extremely specific market creating and manufacturing products of high-quality and delivering a brand across the globe at a large size. This is the reason we are seeing a lot of venture capital invested into the D2C (direct to the consumer) sector. However, certain among these highly-funded D2C brands might not be viable in the medium-term because a high level of customer loyalty could be difficult to attain and could be out-matched by established companies (Procter and Gamble Adidas and others) who are constantly innovating their product and brand brands. They could be simply beaten by other brands with a well-funded consumer brand. Consider the number of online "razor" subscriptions and club businesses are there today.