Amazon vendors got a lesson in centralization on March 7, after the e-commerce giant suddenly began to cancel a large number of orders.
Amazon: We saw the opportunity
As Bloomberg As the company reports, citing a statement from Amazon, the company wants to boost returns at the heart of its e-commerce business. As a result, the supply line has changed radically and even long-term sellers have been forced to sell products directly on the marketplace instead of using Amazon as an intermediary.
According to reports, this leads to lower costs because the suppliers themselves bear the costs for storage and shipping. Amazon receives a commission from each transaction.
"We regularly review our distribution partnerships and may make changes as we see opportunities to offer our customers better choice, value and comfort," the statement said.
The kick-off effect for suppliers may have already hit a nerve predictably. As Bloomberg notes, Amazon's seismic changes may easily cause havoc due to months of pre-arranged orders.
"If you rely heavily on Amazon, which many of these providers are, you're in a lot of trouble. If this goes on, it can get people out of business, "cited the publication Dan Brownsher, CEO of a consulting firm that counts some 50 Amazon vendors among their clients.
At the time of printing, Amazon's share price had fallen by nearly three percent a day.
Can decentralization work against monopolies?
As Amazon has grown into a virtually global monopoly, the risk of relying on a huge, centralized partner will apply to companies that have chosen an alternative ethos.
However, decentralized marketplaces have not gained much popularity yet. Efforts to take over the e-commerce giants have made little progress so far, with eagerly awaited offerings like OpenBazaar not affecting consumer habits.
"You should be able to buy and sell using cryptocurrency … If you get crypto, you should be able to spend it on what you need for your daily activities," said platform founder Washington Sanchez Crypt currency lawyer Tatiana Moroz the Tatiana show in January.
Sanchez is overseeing the diversification of OpenBazaar's core offering and is moving into related software as part of the parent company OB1.io.
What do you think about the strategy change from Amazon? Let us know in the comments!
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Post source: Amazon shares fall 2.6 percent as centralization unsettles suppliers
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