Stand up to Amazon: a combination of different services makes this possible
When it comes to the effects of coronavirus, the meteoric rise in online business is undoubtedly the second biggest trend after working from home. In the same breath, there are reports of local retail dying out and increased vacant units in cities.
Amazon is enjoying a large share of the pie: online giants account for around 50 percent of American online retail sales. However, around half of these sales are not completed through Amazon itself, but through third parties that use Amazon as a sales platform, often including very small shops or specialised online shops. They benefit from the giant logistics infrastructure and, as well as logistics centres, from Amazon’s planes and chartered boats.
Yet, this service comes with a price tag: Amazon’s fees lower the profit margin. Furthermore, well-known brands have to combat imitation and counterfeit products that do not always disappear from the retail platform immediately. This often makes it more difficult for manufacturers to present their products as they wish. For this reason, several big brands, like shoe manufacturers Nike, Birkenstock and Vans, have removed their products from Amazon to establish their own shops.
One of the companies helping them is a start-up from Silicon Valley: Darkstore. According to the company, it offers warehouse-as-a-service. The start-up’s aim is to be able to offer delivery services like Amazon, even up to same-day delivery. It relies on urban logistics warehouses for this purpose. These are as close as possible to the customers and are already being set up in empty retail spaces. As opposed to classic contract logistics, clients do not pay for warehousing, but only pay for each sent item when the goods are shipped. The company is collaborating with other services in the supply chain. For example, it is working with Doordash for its deliveries, which recently became a listed company. The service is currently available in New York and Los Angeles, but is likely to expand further soon.
Together with other service providers in the online business segment, such as online shop configurator Shopify, payment service providers like PayPal or delivery services like Doordash, infrastructure is gradually emerging that will also allow medium-sized companies to keep their service promise to their customers like with Amazon, but without having to use the top dog’s logistics and branding. This allows them to stand up to Amazon and keep growing independently.