The Banking Executive Magazine - May 2022 Issue

Online Retail Business Imagine you want to start a business, and let's say it's an original idea like a dietary supplement that claims to give customers some positive health effects. So after finalizing the legal and administrative part, you market your product online sell it. Voila you are now running a business where you are your own boss! Except that's not true! Why? Because of the business hierarchy of the world… Your dietary supplement would likely go for sale on amazon.com, the largest online retailer in the world, this is because you want your product to be on a website that would get you large exposure and is also a trusted website by most con- sumers. Therefore, hopefully, result- ing in more sales than if you were to sell it on your own website. However, to sell a product on Ama- zon, you need to get approved as a seller and Amazon takes several fees from you as a seller so that they can make money as well. This relation- ship usually works well for both amazon yourself and the consumer; Amazon makes a little bit of money, you make some more money, and the consumer gets the product they want within two days. Nevertheless, this also means that Amazon now controls what happens to your business. In other words, if they wanted to, they could triple their seller fees overnight and all of a sudden your business venture could be over (even though these things rarely happen at Amazon). But what does happen often is they actually just copy your product, put their own label over it, and name it amazon's choice, and all of a sudden your product is now too expensive and of a lesser quality than amazon's ver- sion of your product. So amazon has the power to make or break your on- line dietary supplement business. But even amazon, the trillion dollar company, has a boss! When you purchase a product on amazon, you are either buying it through their website or their phone app, and for this example let's use their website. Most traffic on ama- zon.com is reliant on two things; browsers and search engines. What if one day, the dominant com- pany in both of these spaces, Google, decided that Amazon would no longer show up in their search en- gine, or what if they decided to give amazon.com a flag that the website isn't safe. Browsers and search companies can control nearly every website on the Internet! But, even browsers and search en- gines are also dependent on some- thing else; Operating Systems! Operating systems can easily dictate what is and isn't available on their platforms because of how they are programmed. That's why, for decades Mac OS had different pro- ISSUE 161 MAY 2022 the BANKING EXECUTIVE 29