This article misses a huge point, it assumes <10% affiliate fees are the end game for these startups. If one of these startups manages to get significant market

This article misses a huge point, it assumes <10% affiliate fees are the end game for these startups. If one of these startups manages to get significant market share, what stopping them from building a supply chain down the line (or acquiring someone who has a good one) and using that to tripple profit margins. It sounds to me that these startups are thinking "lets not waste a lot of money investing in a supply chain (ala webvan)". The quality of your supply chain might help you drive down costs, but it's going to do little to increase your market share. The marketing and shop-front are the biggest factors that are going to impact market share, so it makes much more sense to focus the investment in those areas and outsource everything else until you're ready to expand. VC's aren't stupid, they're looking at the bigger picture.