In a world where e-commerce has become a necessity for almost every retailer, it may seem like they have only two options: to place their goods in a market run by giant companies, or to sell it directly to to sell consumers in the hope that they will earn more on every transaction despite fewer sales. In other words, join a dominant market like eBay, Walmart or Amazon – which according to Digital Commerce 360 in itself represents 38% of US online sales, or hope they can find customers through ads and word of mouth.
For many small and medium-sized sellers, a third option has emerged, embodied by the emerging star of e-commerce, Shopify. This approach gives merchants access to third-party cloud-based services such as payments and fulfillment, but allows them to retain more control over their brands and customer relationships than the largest marketplaces offer. Buyers may not even know they are buying something from a Shopify-powered retailer, and that’s the point.
In addition to making goods available on sellers’ own websites, these software companies, which also include BigCommerce and Magento, can perform the arduous task of listing merchandise in the giant markets. By becoming hubs for managing sales through multiple channels, including social media platforms, it represents true competition for Amazon and its kind, which retailers will likely get more leverage from when dealing with those entrenched giants.
The increasing competition is forcing Amazon to acquire or build its own services for creating stores outside its market.
While traders have more options, there is also more complexity in navigating the platforms of this growing range of technology companies. Despite increasing competition for the sales operations, they often remain under the grace of decisions made by giants.