November 1, 2010, 12:00 AM

Unraveling Amazon

(Page 2 of 2)

So far Amazon has targeted manufacturers with this WebStore offering, claiming Timex, Martha Stewart and Samsonite among its clients. For manufacturers, a WebStore storefront is an easy way to establish a more direct link to their customers. But this is another way for Amazon to gain insight into the strategy and results of other web sellers, which will make many retailers wary.

Conclusion

All of Amazon's offerings, regardless of relationship type, are driven by the insight that Amazon has gleaned from being an online retailer. On one hand, retailers can benefit from that insight by leveraging Amazon's highly useful tools. On the other hand, it is important that retailers constantly gauge their comfort level with Amazon as a partner/competitor, and keep their eyes open regarding the amount of market intelligence Amazon is privy to.

The bottom line: retailers would be remiss to put all of their eggs in the Amazon basket; instead they should maintain a diversified, multichannel e-commerce approach to reap the benefits of Amazon without pigeon-holing their entire e-commerce strategy.

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