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I was wondering about this topic, and hope everyone can contribute their wisdom to this top?
What do you guys think of the potential of ecommerce
in the future?
Lately, all the social networking websites, online information gathering website (ie myspace, delicous, digg.com ect) seems to be getting all the buzz. Ecommerce seems to be the basterd child of internet business model. With Stock of Amazon.com, overstock.com, (buy.com couldn't go IPO), Ebay at a pretty low point.. ecommerce seem to have lost a lot of its glitter since the boom. Also because of how easily it is to compare price on the internet, the profit margin of ecommerce site seems to be razor thin.
What do you guys feel about the future of ecommerce? Is there any potential to it.
I personally feel:
More people make a decent living, with a decent business from ecommerce than anything else. However, potential for greatness for ecommerce site is limited due to the low barriers of entry. It really operates very much like a small business in today's world.
The next level up are social networking or information aggregation type of website(myspace, craigslist, ebay). These website attracts "advertising dollar"(except craigslist, because he's weird) or has a business model within itself which seems to be more vaulable in today's world.
Then even high level are for people who can come up with new technology related idea to make internet more efficent. For example Google and their searches.
What do you guys think?
Everyone thought Expedia & Travelocity had the travel sector locked up. Then along came Orbitz. Then a whole bunch of last minute travel sites. Now we have travel comparison sites that grab rates from multiple sites. Who knows what tomorrow will bring?
I think that ecommerce is going to continue to grow at a steady rate. The goldrush is long over and that is why Amazon/ebay et al, is out of favor with investors. Wall street looks for growth, the faster the better.
The real growth will be in the click and brick type of site. Where existing businesses will continue to move online to keep up with the competition.
That being said, there is always going to be a "better moustrap" come along. Like somebody mentioned for the travel sector, all you need is a small share of the market and you will be successful.
Companies that have a normal, real world commerce operation, whether it is B2C or B2B, will open ecommerce operations. Or expand ecommerce operations by adding more lines and more products.
Instead of pure ecommerce only businesses being the driving force, such as Amazon or Pets.com (oops that failed). It is easier for an existing company to absorb the losses for the first few years, and they have the existing supply chains, manpower, shipping contracts and technology.
I think ecommerce actually levels the plainfield for the big and small businesses. True that existing business can use ecommerce as a extra channel for sales, and they can leverage their existing infrustrture, but you have the consider the tremedous baggage that comes with that advantage. Say best buy, they have so much leases to maintain and stupid teenagers to feed, they can't even come close to beating the price of JOE importor of Sony products or even Newegg. These existing business have to maintain a certain level of margin that small business don't need to. Of course, we always hear about services. I am sure service matters, but small business can have good service just the same way as big business. Pure ecomemrce companies can also have better services than existing brick businesses.
So from what I am getting, Ecommerce is truly becoming a stablized industry. We probably could expect stable growth from it, but nothing spactacular.