I was just speaking to this topic last night amongst a group of friends; and basically said pretty much the same thing - except that I feel that Amazon's choice significantly points to the failure of online retailing. Lack of profits, shopping agents, and fierce competition will only drive prices lower, making it less and less profitable to retail online.
The real money in e-commerce won't come from retail sales (though online sales are a nice supplement to real world sales), and it won't come from streamlining and integration of real world and online inventories (though that is a significant way to cut costs). The web is all about destroying middlemen, and retailers are the ultimate middlemen! Why not go to eBay and buy that new bestselling hardcover from a guy in Tulsa who just finished it for five bucks plus shipping?
No, the real money in E-commerce is going to come from the sale and analysis of DATA and information. The web is first and foremost a communications medium; it's greatest strength is its ability to send data back and forth... it's therefore a natural assumption that money should come from the sale and transfer of significant and valuable pieces of data.
The company I work for currently has two clients who are leveraging their databases onto the Internet, and we're designing databases and making convenient web-based search and reporting front-ends for their subscribers. These companies are going to get a hell of a lot of money from people using the same data source. Their only overhead will be maintaining the servers and databases - no inventory, or shipping costs, or anything.
Internet companies that sell services and information online are going to be the truly profitable e-commerce sites. The problem is, most people are still trapped in the "world of atoms", as Negroponte puts it. They're still trying to fit real world strategies into the online world, and when the balloon bursts and people realize it's not going to work that way, stock prices are going to crash really, really hard.
Amazon Heralds the End of E-commerce retail (Score:2)
The real money in e-commerce won't come from retail sales (though online sales are a nice supplement to real world sales), and it won't come from streamlining and integration of real world and online inventories (though that is a significant way to cut costs). The web is all about destroying middlemen, and retailers are the ultimate middlemen! Why not go to eBay and buy that new bestselling hardcover from a guy in Tulsa who just finished it for five bucks plus shipping?
No, the real money in E-commerce is going to come from the sale and analysis of DATA and information. The web is first and foremost a communications medium; it's greatest strength is its ability to send data back and forth... it's therefore a natural assumption that money should come from the sale and transfer of significant and valuable pieces of data.
The company I work for currently has two clients who are leveraging their databases onto the Internet, and we're designing databases and making convenient web-based search and reporting front-ends for their subscribers. These companies are going to get a hell of a lot of money from people using the same data source. Their only overhead will be maintaining the servers and databases - no inventory, or shipping costs, or anything.
Internet companies that sell services and information online are going to be the truly profitable e-commerce sites. The problem is, most people are still trapped in the "world of atoms", as Negroponte puts it. They're still trying to fit real world strategies into the online world, and when the balloon bursts and people realize it's not going to work that way, stock prices are going to crash really, really hard.
Mike Caprio [ldbw.com]