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Competing with Amazon

15/02/2018

Is Amazon an unnecessary intermediary between consumers and vendors? The reason to ask is because some European countries buy things in a different way.

Last Christmas, there were plenty of stories about how packages from China were clogging up logistics systems in a few European countries. The reason was that consumers increasingly buy directly from China through shopping sites like Ali Baba.

In the U.S., the system looks different. Amazon sources from vendors and keeps inventory in fulfillment centers. The cost of these fulfillment centers must be high. Because they are less costly than brick and mortar setups, Amazon has had a large cost and time advantage against traditional retailers. But against direct delivery? The way to compete with Amazon in the U.S. may be through an asymmetrical setup similar to the European model.

European and American Model Chart