The Market Makers: How Retailers are Reshaping the Global Economy
Contents
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Introduction Introduction
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Amazon.com as a Market Maker Amazon.com as a Market Maker
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Early history and growth Early history and growth
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Amazon.com as an information intermediary Amazon.com as an information intermediary
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Amazon.com as a market maker Amazon.com as a market maker
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Amazon.com's impact on the book retailing value chain Amazon.com's impact on the book retailing value chain
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Attracting and converting online customers Attracting and converting online customers
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Creating new categories and expanding geographically Creating new categories and expanding geographically
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Attracting existing suppliers Attracting existing suppliers
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Aggregating a community of small merchants Aggregating a community of small merchants
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eBay as a Market Maker eBay as a Market Maker
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Early history Early history
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eBay as a “pure” intermediary eBay as a “pure” intermediary
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eBay's market-making activities eBay's market-making activities
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Reinventing market categories Reinventing market categories
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Creating online markets around the world Creating online markets around the world
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Growing the eBay ecosystem Growing the eBay ecosystem
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Emergence of mom-and-pop online stores Emergence of mom-and-pop online stores
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Evolving Dynamics of Online Retailing Evolving Dynamics of Online Retailing
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Online retailing: a changing landscape Online retailing: a changing landscape
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Forecasts of US online retail Forecasts of US online retail
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Impact of broadband connectivity Impact of broadband connectivity
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The role of information The role of information
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Small niche players Small niche players
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An age of partnerships and cooperation An age of partnerships and cooperation
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Physical retailers in the age of the Internet Physical retailers in the age of the Internet
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Concluding Thoughts Concluding Thoughts
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5 Chapter 5 Amazon and eBay: Online Retailers as Market Makers
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Published:24 February 2011
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Abstract
In this chapter, Suresh Kotha and Sandip Basu describe the effects of recent technological changes on retailing, in particular the development of the Internet and of overnight delivery services. The Internet and online retailing have given rise to new retailing formats for selling traditional products, such as in the case of Amazon.com and books. In addition, these new technologies have generated new forms of market making. One of the best and most successful examples is eBay.com, which brings together millions of buyers and sellers in a cyber marketplace. Online shopping has also impacted on incumbent retailers, whether they see the Internet as just another marketing channel or a new approach to retailing. Some existing retailers, such as Wal-Mart, are trying largely to use an online presence to leverage their physical assets, but that could change in the future. Online retailers are still in the process of discovering what works and what does not, although it appears that the current global recession has substantially increased people’s willingness to buy and sell online. Broadband connectivity has given a major boost to online retailing. The next stage, just beginning to emerge, may be global online retailing. Finally, the easy availability of information on the Internet, especially with the development of sophisticated search engines, such as Google, has helped create more knowledgeable consumers. Even if they do not buy online, by using the Internet, many consumers now are much better informed than in the past. When potential customers who have searched on the Internet come into automobile dealerships, for instance, they may literally know as much about the car models and pricing as the salesperson.
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