How much does Amazon commoditize products?

Amazon has essentially commoditized a large number of products. When shopping Amazon, each listing looks nearly the same, with each element of the listing suiting Amazon’s policies. This changes how products are purchased, as discussed in a recent post by Benedict Evans, “TV, retail, advertising and cascading collapses” Benedict Evans writes (as we recently covered):

“As buying goes online (regardless of how much the previous points happen at all), buying patterns change. Really, whenever you change the channel, buying patterns change – people do not buy the same in malls as in department stores, nor in department stores as in small shops, and so people do not buy exactly the same things online as they do in supermarkets or malls.”

On the MarketplacePulse post The Channel Shapes What Is Bought, the question of a premium brand selling on Amazon was raised:

For a brand like Nike selling on Amazon is a headache they’d rather not have to deal with. But like many brands they don’t want to completely miss out on it, so – rather unenthusiastically – they give in. But when customers go looking for Nike products on, do they buy Nike products, or do they buy something else? That is, are brands attracting their customers to who then buy something else?

Is Nike, by giving in to sell on Amazon, and thus by allowing customers to find their products there, in the long-term slowly loosing market share to other brands who are also on Amazon. For a brand like Nike this will take decades to have any affect, but for smaller brands the effect will come sooner.

It’s tough to ignore Amazon, which is why we typically advocate for independent ecommerce businesses to leverage Amazon, while also working to build their own direct communication and sales channel with their customers.

Andrew @ EcomLoop
EcomLoop founder. I've worked in ecommerce since 2005, beginning with my own ebay store. I've run multiple independent ecommerce businesses on Magento, Joomla, and more recently, Shopify and WooCommerce. I believe marketplaces should be looked at as a sales channel and that all independent businesses should strive to build a direct connection with their audience for long-term success.

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