Is the de-facto trustmark Amazon or eBay? Is this fair?
In another discussion on this site, Osimod raises an interesting point about European e-commerce platforms being dominated by Amazon and eBay already (http://daa.ec.europa.eu/content/how-can-investment-e-commerce-help-creat...).
But I would phrase it in a different way: TRUST has made Amazon and eBay the dominant marketplaces by attracting small retailers in under their trusted umbrella. I spoke to several e-commerce professionals who suggested I summarise their comments on this site.
First, one (ex Amazon) e-commerce professional noted that he did not see any reason for policy intervention, e-commerce was coming along fine. Why would Amazon feel the need to engage? But others pointed out a potential lack of fair competition which they believe drives a need for a non-aligned trustmark.
Amazon and eBay have become trusted go-to marketplaces for many European consumers in the absence of an accepted pan European Trustmark scheme for small e-merchants. Some feel that this creates a barrier for small etailers - they have to trade via Amazon's or ebay's marketplaces. Even if you are a larger brand, trust is still required to sell overseas where the brand may be less well known (lack of cross-border ecommerce is one of the EC's bugbears).
Amazon acts not only as a trusted marketplace for your e-shop, it can also warehouse and deliver your products, so it is very easy to set up a "virtual" e-commerce company. Amazon could argue it has created many EU jobs in this way. It certainly has many distribution centres in Europe and although there have been newspaper reports suggesting Amazon Europe's tax bill is a little low, it presumably does not escape VAT (see http://daa.ec.europa.eu/content/tax-harmonisation).
But arguably neither Amazon nor eBay are "open" market-places in terms of competition.
Amazon is a retailer AND a marketplace owner. It competes with its merchant marketplace customers and has an advantage over all other merchants because it can see their prices and turnover - instantly.
eBay does not compete with its merchant customers, but it owns PayPal and promotes this payment mechanism.
Some small e-commerce retailers are telling me that this is unfair competition.
Thoughts? Trustmark thoughts please go here to comment: http://daa.ec.europa.eu/content/special/discussion-paper-trustmarks
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Comments
What has trustmark to do with
What has trustmark to do with the question? From my perspective, it is merely confusing the issue. Consumers dont even see the "Trustmark" and put no value on these as they make little difference.
Amazon compete on Price and do so pretty ok.
They and other players managed to get other to act as supproviders even through it means loosing the main share of the income.
Europes challenge is to restore markets and especailly deal with these invasive market places
So you would by something of
So you would by something of a foreign, unknown, site if it was 1% cheaper than Amazon? Well you might but I can tell you that in countries where Amazon has become a major player, it is now the defacto online market place. People TRUST that Amazon is a real retailer, TRUST paying them money, TRUST that goods will arrive, and TRUST that they can return them if not as advertised. It is all about trust.
Perhaps to some extent. But I
Perhaps to some extent. But I do not see it as the explanation, not even as a major part of an explanation. These are Hygene Factors, not motivators in themselves (Herzberg).
Retail loyalty on commodities is fragile and dont go very deep. That is a reason why intermediation by infrastructure and thereby commoditisation is so dangerous to manufactuers.
I am not questioning results and market share. But "TRUST" is such as an easy explanation which I think has more to do with a desire for a simple understanding than necesarily a true loyalty.
And if it matters, it has more to do with the fact that EU has allowed or even enforced infrastructure "gatekeeper kartels" by preventing secure and empowering infrastructure solutions.
If consumers could transact without control transfering from consumer to infrastructure channel providers or others, transcation risks in relation to ecommerce would drop towards zero.
Lets assume EU got it act together an actually started abiding to its own principles requiring a secure, open and empowering infrastructure, all this trust-BS would matter little.
Few thoughts: both AMZN/EBAY
Few thoughts: both AMZN/EBAY will dominate the market places that they have created,
there is a first-mover advantage, the network-effects, economies of scale [1],
intentional preference to dominate the market and force out competition
(instead of taking home revenues, etc). Since these markets are not (really) regulated not
much change can be expected here. @engberg is also right in noticing that trust-mark
would not change much here.
One can may be pivot or build on top of trust-mark idea though expanding it to a 'co-operative something', that would:
- enlist participating EU businesses
- add value helping them to categorise merchandise and/or services using common identification and classification schemas
- provide them with common infrastructure supporting common operations: advertising and discovery,
'order-to-cash',parts of fulfillment, returns, recommendations, customer feedback, insurance etc - all that could be operated co-operatively
- since pricing and fulfillment could remain the same (established by individual entities), this initiative would be just
an additional distribution channel; but if executed correctly it could represent higher value than the sum of single small entities, because of very same [1].
[1] http://en.wikipedia.org/wiki/Economies_of_scale
I dont thnk we should see
I dont thnk we should see Networkd effects as "Economies of scale" - incresaingly they appear to be data abuse/market distortions models where e.g. the market "owner" or "maker" abuse information on all participants.
I would raise the question whether this is at all comparable with a market understanding or there is a need for, not just regulation, but actually separation of functions (chineese walls) by use of technology so e.g. Amazon cannot see e.g. prizing (exhanged end-to-end) and who the actual buyer (empowering identity) is.
I begins to look as-if digital these market markets are destabilising.
I agree with you on this,
I agree with you on this, griff.
And this is why this is a part of trustmarks debate, Engberg (it is only 1 minute video, made for DAA11): http://www.youtube.com/watch?v=Fv_QkYQny3w