

E-commerce startups - yonasb
http://cdixon.org/2012/08/15/e-commerce-startups/

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patio11
If your business model is:

1) Carry everything or everything-in-your-market

2) Have customers drive product decisions

3) Have the primary metaphor be "Buy a product from our shop"

4) Have all products be available elsewhere

Then Amazon is probably going to _bury you_.

But that's like four knobs you can twist, right?

Maybe you sell only one item, or a limited set of items. Maybe you don't let
customers pick anything because that's not really what they want to do -- in
fact, maybe not needing to choose is your selling point. Maybe you're selling
a subscription to consumable goods rather than consumable goods, or a
relationship which is so subscription-like that it makes no difference. Maybe
you have exclusive access to a product, to a product mixed with IP, or to a
particular opportunity to buy a product.

c.f. Dollar Shave Club, Gilt, BlueNile (which might as well be
SaviorOfTheCluelessGroom.com), etc etc.

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jayzee
_The only way to compete is to sell used stuff or make your own products (or
provide a marketplace for those things)._

Well, there are other markets that fall outside this... For example, at
Quartzy we are working in the life-sciences market. There are multi-billion
dollar incumbents like Thermo Fisher, VWR, EMD, Sigma and scores of others but
the game is different because you are distributing stuff that could be
hazardous/require ice/could be radioactive etc. Amazon's warehouses are not
equipped (as far as I know) to handle such products.

So one can target markets that have seen no innovation in the last 15 years
where Amazon does not have an advantage...

Amazon is getting into lab supplies (glassware etc) but a problem here is that
Amazon likes to have one-price and all the manufacturers play a game where
there is a list price and a special price at your institution. This is a game
for some reason that Amazon does not want to play so in general for a couple
of reasons they are locked out for a large fraction of the huge life-sciences
market.

Wonder if there are other markets like this out there?

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gav
> The only way to compete is to sell used stuff or make your own products (or
> provide a marketplace for those things). The fat head (large incumbents) and
> the long tail (artisanal shops) will thrive, but the middle of the
> distribution will suffer.

This is so far from being true. Scale isn't always a winner.

You can pick a product category that is sold by Amazon, Walmart, Home Depot,
etc, that makes up a minuscule fraction of their total business and turn it
into a business that does $10-50 million in sales.

You can buy things cheaper than they can, you can sell things for more money.
You can focus on being the best darn seller of widgets that's out there.

The problem is that this kind of e-commerce isn't really that sexy. It also
relies on a lot more skills than your normal technical person possesses. If
you can manage customer service, distribution, 3rd party fulfillment, global
sourcing, vendor relations, etc., etc., you might just be able to put a kick-
ass website in front of this and sell a lot of products.

~~~
harlanlewis
+1.

However, note that successfully capturing $50M/yr of an underserved market
does notify entrenched players that "their" customers are shopping elsewhere
for an emerging niche. Response will vary. Some may be better equipped or more
inclined to directly address the niche than others.

The infrastructure required to run a $50M/yr ecommerce business does not make
for an attractive acquisition target when the entrenched+scaled company can
simply reposition existing products to compete.

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jorleif
An e-commerce concept I believe could work wonderfully is serving markets
"near" those served by traditional shopping. For example, when buying
furniture, there is either the traditional way of buying a ready made piece
cheaply (e.g. IKEA), or get exactly what you want from an artisan very
expensively. What if you could get something that is very much like the ready-
made piece, but with something changed, e.g. width, depth, material etc?

One could have a showroom and a ready made collection of items, but allow each
customer to do some level of personalization. The parts would then be shipped
in IKEA style brown boxes, with the pieces cut automatically to shape with CNC
machinery. In that way, you could get to a price point where custom made is
competitive.

Similarly one could perhaps sell clothes with similar concepts where the user
constructs the piece of clothing online (e.g. pick collar style, change
coloring etc.). I at least always find clothes that are great except 1) They
don't quite fit 2) I dislike a particular detail, but there is no way to fix
this in the brick and mortar model.

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burgreblast
Naturally, I'm a fan of online commerce, but Kahneman told us the underlying
reason all ecommerce is just a tiny fraction of retail: WYSIATI.

Today, physical shops are so much better at showing me things that weren't on
my list, but now I really ought to buy. I load up my cart far more in
Target/Safeway/Carrefour than I do at Amazon. What needs to happen for online
to do 10x more volume?

~~~
jdonaldson
Nothing here is particularly surprising. It begs certain questions though.

What else can e-commerce provide, besides decision making support? What do
stores need to do to play to their strengths?

Very few physical stores have managed to do well in the era of e-commerce.
Most have a strong "experience" factor that I think goes well above and beyond
showrooms. I'm thinking of Ikea, Trader Joes, Apple, and Costco.

I think there needs to be a strong "curation" component to brick and mortar
stores these days. You can't just sell shelf space to the highest bidder
anymore.

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inuhj
There are also product categories that the big players(e.g. Amazon) won't
touch. I'm currently operating in one and its definitely lucrative.

