Back before I first left the United States in 2012, I’d often use price comparison websites when trying to find parts for computers and system builds. These sites tracked prices from hundreds of small vendors, some of which had brick and mortar stores, others wer storage warehouses, and others were simply drop shippers. Upon returning to the country, I found that most of the old comparisons sites I used were void of those smaller individual stores, replaced by less than a dozen of the big retailers. While I was away, the era of the mom-and-pop e-commerce website had ended, with most retailers now using marketplaces provided by the large players like Amazon, eBay, Newegg and others.
In 2000, Amazon decided to open up their platform, allowing other merchants, who carried products Amazon didn’t,1 Vendors could now display their items under the Amazon moniker. It changed the model from Amazon being a monolithic warehouse seller, to being closer to eBay with hundreds or thousands of independent stores. Over the past several years, many other large online retailers have migrated to this model, including Newegg and Reverb.
“…at the time, eBay was the successful one and Amazon was like, ‘alright, well maybe we should do what eBay does’, so they tried doing auctions and it doesn’t [sic] work … but the thing they stumbled on that was like a big success, was just taking other peoples’ stuff and tossing it into their inventory as though it were all the same as just Amazon selling it themselves…“ -The Magic Store, Reply All (podcast)2
At one time, brick and mortar stores would often build a website to supplement their local sales. This evolved into these same merchants also creating eBay stores to push their offerings, and used or refurbished items. Of course, there were businesses which started off as on-line only, with no physical retail presence, and now we seem to have come full circle. People who want to get into e-commerce must first establish stores on Amazon, eBay, Newegg and others, sometimes building their own software around those marketplace APIs. Having an independent website, or on-line catalog, is now a secondary focus.
These large, conglomerated presences do lead to major retail issues. Before Amazon opened its marketplace, eBay buyers were often weary of situations involving scams, misrepresented items, low-quality merchandise, and counterfeit products. As Amazon has grown and allowed more sellers, they too have started to experience similar issues.
Many sex toy and adult novelty manufacturers refuse to sell their products on Amazon, or even offer wholesale products to any vendors who have an Amazon or eBay presence3. Mostly this is due to the influx of potentially counterfeit products. Low-quality counterfeits not only hurt the manufacturer with bad product reviews, but they can also contain unsafe materials and be potentially dangerous. When it comes to counterfeit books, a publisher can potentially lose money due to copyright infringement4. However, when it comes to adult toys, there are serious potential health and safety issues.
Amazon, Newegg and Reverb do have one big advantage over eBay. Each of these companies do have their own warehouses and inventory. On all of these sites, some consumers prefer products that indicate they are sold and shipped by (vendor) over third party merchants. Often, brick and mortar merchants will only price match for these types of direct sales and not for third party retailers. Still, many consumers don’t make this distinction.
Even more confusing, in the case of Amazon, products listed as being fulfilled by Amazon still come from third-party merchants that simply ship their products to an Amazon warehouse and let Amazon handle their inventory. This can lead to something arriving in an Amazon branded box, yet still have the potential to come from an unreputable merchant.
A Centralized Marketplace
The Internet used to be a place filled with many completely independent websites. People would host their own content, blogs and e-commerce websites on their own domains. Today, people are moving to more centralized platforms. Google and Microsoft dominate the e-mail market, social media is in the hands of a few giants, and even e-commerce is predominately handled by a small subset of big players.
There are advantages for merchants, such as being able to rely on third parties for security updates, and having products listed on a large, accessible index. Yet with those advantages, new problems arise. Vendors now tend to be in a race for various tricks to get their products placed above other merchants on Amazon. This leads to issues with merchants paying for fake product reviews, and an influx of low-quality or counterfeit products.
The consolidation of e-commerce platforms and marketplaces may have been inevitable. Even for people who run their own e-commerce sites, there are a limited number of payment providers. Controversial sites run the risk of having their funds frozen by major payment gateways, in the same way Amazon or eBay could ban a merchant’s store. Still, I feel like something has been lost with the gradual withdrawal of mom-and-pop e-commerce stores. Not only are price comparisons now more difficult, many consumers don’t even bother looking at prices from other vendors when they can simply use their one-stop solutions. It’s just another example of a more centralized and monolithic Internet; a far cry from the more dynamic wild west of the previous decade and dot-com era.
Third-party sellers and Amazon - a double-edged sword in e-commerce. 23 June 2015. Rankin. The Guardian. ↩
What Happens After Amazon’s Domination Is Complete? Its Bookstore Offers Clues. 23 June 2019. Streitfeld. The New York Times. ↩