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This seems to be the classic underdog problem. The traditional retailers that you like today will become third party marketplaces tomorrow if they grow. So the

This seems to be the classic underdog problem. The traditional retailers that you like today will become third party marketplaces tomorrow if they grow. So the issue is that we only get good service from underdogs and it is destined to fail once the underdog is not an underdog anymore.

verve_rat 5y ago
That doesn't follow. Just because an online retailer grows it doesn't mean they have to start allowing third-party sellers. In fact, seeing what is happening to Amazon's reputation, that seems like a bad long term move. Short termisum might win out, but it is not a foregone conclusion.
- lamontcg 5y ago
  The mechanism is the managers that take over at companies who focus on the short term bottom line (trimming support today, to juice profits tomorrow, to lose credibility years down the road after the bonuses have long landed in their bank account). And the problem is that Amazon's growth profile (retail-side anyway) is going to be pretty constrained going forwards because they own too much of the available pie right now. So the result is that managers are going to have to look for other ways to trim costs to make numbers. If you're starting from 0.001% of the retail market and trying to grow 10x it is much easier to do that just by having really good customer service.
  - lupire 5y ago
    "short term bottom line" is a comically absurd way to describe Amazon, which has been growing consistently for 25 years.
    - ClumsyPilot 5y ago
      This comment is peak short-termism! It is comically absurd to refer to 25 years as a long time! There are companies that have been around for 300 years, in fact prior to rise of venture capital moat companies were multi-generational family business and you would consider how a decision would reflect on your children.
      - lamontcg 5y ago
        The professional management class in America no longer remotely behaves that way.
    - lamontcg 5y ago
      I'm talking about the prospects for growth in the next 25 years, not the last 25 years.
- cogman10 5y ago
  I agree it's not a foregone conclusion, but it's also not far fetched. That's what happened to newegg. They tried to turn into an amazon and now I have a hard time trusting them.
- dahart 5y ago
  > Just because an online retailer grows it doesn’t mean they have to start allowing third-party sellers. Why do you believe this? Not one of the top 10 online retailers in the US doesn’t have third party sellers. It appears to be the case in practice that growing does require opening the doors to anyone and everyone, which obviously increases the scale of business a retailer can offer. There are both reasons and evidence to suggest third party sales are what it takes to grow to even one hundredth the size of Amazon. > seeing what is happening to Amazon’s reputation, that seems like a bad long term move. This seems like a big assumption. There is a very long list of corporations and monopolies with relatively bad reputations that are doing just fine and have for a long time. Reputation isn’t a good measure for the success or future prospects of a company, once it gets large enough.
WorldMaker 5y ago
Except Amazon started as a third-party marketplace. This isn't *new*, some of us just have really short memories. For the first several years the only first-party sales they did were in books (and not all books on the store even at the beginning). They've expanded into other first-party categories, but there are much fewer first-party categories than people assume. (And always have been.) The big thing that changed isn't the third-party marketplace on Amazon, it's that they increasingly and intentionally blurred the lines between "third-party" and "second-party" marketplaces. Any third-party that uses "Fulfilled by Amazon" logistics (warehouses, shipping) just about gets automatically upgraded in the Amazon user experience to "second-party" even if Amazon has no deeper working relationship with the third-party than "Fulfilled by Amazon". Some of that intentional blurring of the lines is also questionably Dark Patterns intentionally designed to confuse consumers in just exactly what categories Amazon supports directly (first-party) and which ones are third-party, and more importantly which ones are first-party usually versus third-party today (such as sold out goods). They want to give consumers the illusion of an "everything store" that is never out of stock. That's never the practical reality, and the illusion may be evil from the perspective of shadily pushing consumers to unvetted third parties due to Dark Patterns that back that illusion.
axus 5y ago
Ordered some things from walmart.com, half of it was third-party sellers. They were sort of transparent about it, though, and the quality was at least what I'd expect from inside a Walmart.

verve_rat 5y ago

That doesn't follow. Just because an online retailer grows it doesn't mean they have to start allowing third-party sellers. In fact, seeing what is happening to Amazon's reputation, that seems like a bad long term move. Short termisum might win out, but it is not a foregone conclusion.

lamontcg 5y ago
The mechanism is the managers that take over at companies who focus on the short term bottom line (trimming support today, to juice profits tomorrow, to lose credibility years down the road after the bonuses have long landed in their bank account). And the problem is that Amazon's growth profile (retail-side anyway) is going to be pretty constrained going forwards because they own too much of the available pie right now. So the result is that managers are going to have to look for other ways to trim costs to make numbers. If you're starting from 0.001% of the retail market and trying to grow 10x it is much easier to do that just by having really good customer service.
- lupire 5y ago
  "short term bottom line" is a comically absurd way to describe Amazon, which has been growing consistently for 25 years.
  - ClumsyPilot 5y ago
    This comment is peak short-termism! It is comically absurd to refer to 25 years as a long time! There are companies that have been around for 300 years, in fact prior to rise of venture capital moat companies were multi-generational family business and you would consider how a decision would reflect on your children.
    - lamontcg 5y ago
      The professional management class in America no longer remotely behaves that way.
  - lamontcg 5y ago
    I'm talking about the prospects for growth in the next 25 years, not the last 25 years.
cogman10 5y ago
I agree it's not a foregone conclusion, but it's also not far fetched. That's what happened to newegg. They tried to turn into an amazon and now I have a hard time trusting them.
dahart 5y ago
> Just because an online retailer grows it doesn’t mean they have to start allowing third-party sellers. Why do you believe this? Not one of the top 10 online retailers in the US doesn’t have third party sellers. It appears to be the case in practice that growing does require opening the doors to anyone and everyone, which obviously increases the scale of business a retailer can offer. There are both reasons and evidence to suggest third party sales are what it takes to grow to even one hundredth the size of Amazon. > seeing what is happening to Amazon’s reputation, that seems like a bad long term move. This seems like a big assumption. There is a very long list of corporations and monopolies with relatively bad reputations that are doing just fine and have for a long time. Reputation isn’t a good measure for the success or future prospects of a company, once it gets large enough.

WorldMaker 5y ago

Except Amazon started as a third-party marketplace. This isn't *new*, some of us just have really short memories. For the first several years the only first-party sales they did were in books (and not all books on the store even at the beginning). They've expanded into other first-party categories, but there are much fewer first-party categories than people assume. (And always have been.) The big thing that changed isn't the third-party marketplace on Amazon, it's that they increasingly and intentionally blurred the lines between "third-party" and "second-party" marketplaces. Any third-party that uses "Fulfilled by Amazon" logistics (warehouses, shipping) just about gets automatically upgraded in the Amazon user experience to "second-party" even if Amazon has no deeper working relationship with the third-party than "Fulfilled by Amazon". Some of that intentional blurring of the lines is also questionably Dark Patterns intentionally designed to confuse consumers in just exactly what categories Amazon supports directly (first-party) and which ones are third-party, and more importantly which ones are first-party usually versus third-party today (such as sold out goods). They want to give consumers the illusion of an "everything store" that is never out of stock. That's never the practical reality, and the illusion may be evil from the perspective of shadily pushing consumers to unvetted third parties due to Dark Patterns that back that illusion.

axus 5y ago

Ordered some things from walmart.com, half of it was third-party sellers. They were sort of transparent about it, though, and the quality was at least what I'd expect from inside a Walmart.