How can online sellers survive in a marketplace where Walmart and Amazon monopolize the e-commerce landscape as healthy as an additional as half of the marketplace share? Between Amazon’s buy of the entire Foods bazaar and Walmart’s recent obtain of a handful of retailer operating in the niche ready-to-wear market (including menswear firm Bonobos), the two behemoths seem determined to embark on a merciless fight over all-out acquisitions over the next several years – to this day, it is difficult to determine who has the advantage over the other.
Walmart vs Amazon: A Sneak Peek into the New E-Commerce War
The basic premise of the rivalry between Walmart and Amazon is that currently, each player emulates the best practices of the other that have generated success. According to the newspaper, everyone is trying to become additional like the extra – Walmart by investing heavily in its skill, Amazon by opening bookstores and now buying supermarkets.” Amazon has already started slashing prices at Whole Foods in an effort to change the upscale and pricey image of the supermarket chain acquired in 2017.
In addition, Amazon has started testing two grocery stores in Seattle, where Prime members can order online and pick up their purchases from the drive terminals.
Walmart vs Amazon: barriers to entry for third-party sellers
The intense competition between Walmart and Amazon has made it even more difficult for online sellers to differentiate themselves in these important markets.
As Amazon and Walmart begin to offer many similar products to smaller retailers, it will be increasingly difficult for small sellers to list their items that are not routinely resold at more competitive prices by larger sellers. Market players.
Amazon is also known to emulate products that have found notable success among sellers. The GAFA member company labelled these products with its name and then offered them at lower prices than competitors.
Consider that one of the biggest advantages of having the largest market share in e-commerce is that you have sales and price data for each seller. This means Amazon can easily identify profitable products with high sales turnover, start sourcing and selling these on its own.
Walmart and Amazon, therefore, prevent retailers from remaining profitable because they compete with each other to offer the lowest prices on everyday products. In addition, Walmart and Amazon regularly pressure suppliers and manufacturers for competitive prices – their bargaining power, because of their status, works in their favour. In the worst case, they will find another company capable of meeting their demands. What harms e-merchants the most is Amazon’s desire to also sell unprofitable products in order to maintain customer satisfaction at the highest level because Amazon can then meet all the demand with its very enlarged.
The company believes it can achieve longevity (and profitability) by combining unprofitable products (also known as “CRaP”, which stands for Can’t Realize a Profit, in Amazon parlance) with profitable products that they can always offer at a great price.
The giant Amazon notably has a multitude of innovative services such as Amazon Music, Audible, Twitch and the most recent, Amazon fresh.
