Amazon, the world’s largest Web retailer, is clearly in first place. So who is number two and prepared to challenge Amazon? Struggling to think of an answer? Me too. That is terrible news for consumers and for Amazon’s competitors.
As the president and CEO of Zmags, I’ve thought a lot about how companies can compete with Amazon, and I believe e-commerce needs healthy competition to sustainably innovate. But for that to happen, we need to fundamentally change the old e-commerce model.
Amazon continues to defy gravity deep into its second decade. A $40 billion dollar company trading for 70 times next year’s expected earnings just doesn’t seem right. Its third quarter, 2011 profit margin was 58 basis points. It’s as if Amazon is committed to margins below supermarkets.
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