E-Commerce in Times of Amazon. Chances and Risks for E-tailers

Master's Thesis from the year 2018 in the subject Business economics - Trade and Distribution, grade: 1,00, Cologne University of Applied Sciences (Informatik), course: Web Science / E-Commerce, language: English, abstract: The internet has revolutionised the way people shop and electronic commerce has reshaped the retail landscape dramatically. It suddenly allowed small companies to reach out to millions of potential customers and lowered market entry barriers significantly in areas where once only big retail companies competed against each other. But the times when small companies could create online shops and compete with the big players are almost over yet again, and Amazon catalyses this change by seizing a growing share of the whole online retail market. Every second dollar spent online in the US is already spent on the Amazon.com marketplace and the trend in the German market is going in the same direction. The fact that a significant number of overall online sales are generated on the Amazon marketplace impacts other e-tailers. They must react to market concentration and consider whether or not they want to sell their products on Amazon. There are many opportunities and risks that can result from cooperation with Amazon but there is a lack of papers and books that consider both aspects at the same time, quantifying them, weighing each up against the other, and deriving conclusions from it. The aim of this thesis is to close the aforementioned gap in available literature by presenting the current market situation in the e-commerce and analysing the signs of a further market concentration, in order to provide evidence of the problematic situation small and medium-sized enterprises (SME) are in. The thesis then examines the option of cooperating with Amazon as a possible solution to react on this trend and therefore researches the possible chances and risks that could arise through such cooperation. Those insights are thereafter incorporated into a strategic recommendation for e-tailers who consider selling on Amazon. Furthermore, a selling guide which was evaluated in practice, depicts how a company could sell products successfully on the marketplace. In the end, this thesis should contribute to e-tailers’ knowledge about the current and future market situation in e-commerce. In addition, the insights presented should support e-tailers’ decision making process when they are confronted with the question of cooperating with the e-commerce giant or not.