An insight on marketplace models: the case of Amazon and its seller's supply chains
Tutor / director / evaluatorJané Marcet, Juan
CovenanteePolitecnico di Milano
Document typeMaster thesis
Rights accessRestricted access - author's decision
This Master Thesis has the objective of investigating the way Amazon is disrupting the industry and the consequences for the seller’s supply chains. The topic is a very actual onesince everyone knows about Amazon but few people know how it is challenging the existing retailers.The work starts with a deep analysis of the literature review where the reader will understand what an e-commerce is and how it is different from a marketplace: marketplaces are an evolution of the e-commerce since they allow buyers and sellers to come together in a unique online platform making commercial transactions. They allowed to simplify supply chains by creating the opportunity for manufacturers to have a direct relationship with their end users without the need of intermediaries. Marketplaces have made it easier for small companies and start-up to start their business since they attire a huge customer base, but Amazon helpedthem further by offering also logistic services. Hence, the second part of the literature review is dedicated to the ecosystem of the retail giant (common name for Amazon), including its business model, the competitive environment, the value chain and thelogistic models it offers. Three research questions arose after the study of the literature. The first one is about which variables need to be considered when entering in a marketplace: of course the scenario is different whether we talk about small and medium companies or big and consolidated ones, but both of them need to consider their size, their brand equity, their current supply chain structure and the type of product they want to offer to customers. In general small companies need to enter in a marketplace if they want to start boosting sales and be known by a higher audience but at the same time they should strengthen their relationship with the customer through their official channels (such as the company website): only by doing this they will conquer loyalty and trust by their customers. Among the marketplaces, Amazon is the most well known and it offers different options to the starting sellers: in order to understand which of the models it is better to use, a numeric analysis have been carried out through a manually built database. The drivers considered were estimated sales, price of the product, weight of the product and number of existing sellers of the same product: all these parameters revealed to be important in order understand which model to use. In fact, as an example, if the sellers are willing to introduce a bulky product in the market, the Fulfilment by Merchant model is more convenient since the fees in case of Fulfilment by Amazon would be too high and the margins too low.But, Amazonis not only a marketplace platform, it is also a retail platform selling its own products: to the best reviewed sellers in fact Amazon can ask to become its customer. In this case, companies must consider the impacts it has in their supply chains and the channel conflict.
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