Retailers taking risk selling on Amazon, AMR says
While e-retailers that link their sites to Amazon.com may leverage the Amazon brand and gain access to a huge new customer base, they run the risk of selling too close to their direct competitors, Paula Rosenblum, a retail analyst with AMR Research Inc., tells InternetRetailer.com. "Their assumption is that Amazon gives them a large number of different customers, but I think it`s a statement of defeat," she says. "If you`re a specialty retailer, why would you share a site with one of your direct competitors?"
Rosenblum notes that, unlike traditional brick-and-mortar malls built with multiple anchor stores, in the online world Amazon is effectively becoming a sole anchor. "That`s a sea change in retailing," she says. "And it`s because Amazon is such a strong brand."
But she warns that retailers should compare the cost of maintaining and expanding their own sites with the cost and risk of placing a store on Amazon. "You still have to get your images and product descriptions to Amazon anyway," she says. "You`re not saving a whole lot of infrastructure costs."
In the meantime, she adds, "the cost of creating and maintaining a web site have gone down tremendously."
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