management, marketing services) for a wide swath of brick-and-mortar partners: Blockbuster for videos, Ace Hardware for tools, Tower Records for music, Best Buy, Circuit City for electronics, etc.? Then, in aggregate, those deals could hasten profitability (slightly) and/or make steady-state profitability larger" (Reamer, p. 2). This platform monetization can have an enormous impact upon this industry, as evidenced by a weight of 0.15 on the EFE Matrix."Amazon posted $410MM in U.S. books, music, and video (U.S. BMV) sales. At 58% of total revenue, U.S. BMV remains the single largest contributor to total revenue. Growth in this sector continues to be fairly anemic: U.S. BMV grew just 2 [percent year over year]" (Reamer, p.2). Moving into other segments of the online retailing industry (i.e., consumer electronics) could dampen this negative trend. Lastly, "the growing number of bankruptcies among pure-play e-commerce companies should enhance the competitive position of companies, such as Amazon, longer term. In other words, fewer industry participants should lead to increased potential scale for survivors such as Amazon. Not only will fewer companies lead to less distribution of e-commerce revenues among smaller e-tailers, but [surviving companies] should also benefit from less price competition over time. Note that less discounting among pure-play e-tailers should result in higher gross margins longer term" (Patel, p. 10).However, "one could argue that the rapid e-commerce growth over the last few years reflected more of a fad that is losing momentum than a powerful secular trend. This is not to say that e-commerce is going away, rather that the overall e-commerce market may not be as large as once was projected" (D'Eathe, p. 3).Another potential threat for Amazon is that the barriers to entry in the online retailing market are minimal. Start-up costs are minimal, and anybody can start their own Internet shop. "According to M...
