
Service as a SKU (2012) - yarapavan
https://a16z.com/2018/08/17/service-as-a-sku/
======
pietroglyph
The most interesting thing about this article is how Amazon has moved into
this space, and how their current offering diverges from the article's
suggestions. Amazon does offer services as products that you can buy, with all
the trimmings, including reviews. The part about one-click, normalized sales
is pretty close to what Amazon does too. The interesting difference, though,
is how Amazon treats the service providers as commodities. Although the Amazon
services have ratings, the providers do not. This is different from the
author's predictions, and a little strange to me, because it seems like
different providers have so much variance and nuance that they really aren't
interchangeable. I wouldn't ever use "Amazon Home & Business Services"[0]
because I have no idea what I'm really buying, but this must be an intentional
choice on Amazon's part. It'll be interesting to see where this goes;
commoditizing a huge swath of the working population might not be so great.

[0]:
[https://www.amazon.com/b?node=8098158011](https://www.amazon.com/b?node=8098158011)

~~~
flyinglizard
That's because Amazon exactly wants to downplay the supplier aspect. If
supplier A won't fulfill your order, supplier B will and in the process they
will drive each other's prices down. The last thing Amazon wants is the
supplier standing at the front.

I have a theory that in all markets, the last link to the customer will win.
Anything happening upstream will be commoditized away, either by obscuring the
source, slapping a private label on, product placement and promotion, etc. It
used to be that physical stores took pride on carrying prestigious brands, but
it's no longer the case online.

This is the worst things that could happen to brands such as Nike or J&J; on
Amazon, their products are just more items in a never ending category, sitting
alongside rivals, knockoffs and copycats. They don't get preferential
treatment. Those brands will be pressured to move to direct sales to
differentiate and control their destiny. Furthermore, Chinese manufacturers
are coming out of obscurity with their own brands and through AliExpress and
the likes try to get directly in front of the consumer too.

Same thing with the TV market and how Netflix, owning the very link to the
customer, is commoditizing and cutting off everyone upstream, and in the
process it's pressuring Disney and others to move to their own platforms.

The consumer world of the next 10 years will be all about brands trying to
differentiate and survive, exclusive distribution channels, direct to consumer
and market fragmentation.

~~~
scarface74
Ben Thompson coined “Aggregation Theory” to describe this.

[https://stratechery.com/2017/defining-
aggregators/](https://stratechery.com/2017/defining-aggregators/)

~~~
flyinglizard
Good read, thanks. However it looks at the eminence of aggregators as a given.
I'd argue that at least in the retail space, aggregators provide a very
lacking experience and that there is way too much inertia with the established
brands for aggregators to work long term. As Amazon commoditzes everything,
brands will fight back. So right now, you'd see a Nike shoe on Footlocker
window or on a TV ad and perhaps buy it on Amazon. But what happens in few
years, when your local mall shuts down, together with its Footlocker, and what
happens when you don't see the TV ad any longer because you only have Netflix
which doesn't air ads? How does Nike get to you?

I think the next wave in the ecommerce space is a class of backstage services
providing direct to consumer logistics and infrastructure while letting the
brands control the shopping experience. Brands will be more global and more
accessible. No more territorial distribution limits; anyone anywhere could log
into Nike and buy their stuff direct. This will call for enterprise-grade
Shopify like tools.

While Amazon does the backend stuff amazingly well, their frontend and product
discovery is on the verge of unusable and I don't think it's by mistake. They
want to put all sellers on an equal and interchangeable playing field and let
them spiral down towards oblivion.

