You might think this is overly dramatic, but hear me out.
I had a thought when listening to the podcast “302 of a Kind” with Marcus Tandler and Kevin Indig. They were talking about how agentic capabilities and LLM research for shopping purposes are developing. It was an interesting topic, but a thought came into my head: this could be a problem for Amazon and the like.
Then, on top of this, there is the fact that Amazon has been trying to block Perplexity since March this year (when they won the right to do so in court).
One reason might be that shoppers on AI platforms just buy the thing they want and stop, rather than going down Amazon’s deeply sophisticated rabbit hole of cross-sells.
But this is just the client-facing side.
For the vendor view
Having been a pro seller on Amazon myself a while back, I thought: what about the view from a vendor?
For ages, Amazon was a necessary evil that online sellers had to deal with. Because of its dominance, you could not simply say, “I don’t sell there.” The big marketplace accounts for more than 50% of revenue. For me, it was, at times, up to 70%.
That in itself is already a problem of dependence, but even worse are the fees. Amazon takes between 8% and 15%, before other costs such as FBA, PPC, returns or aged-inventory surcharges.
As the platform works through a brutal price war between sellers, in the end, it often takes more than the vendor.
But now, if sellers can manage to surface in AI answers, why would anyone in their right mind leave most of their revenue to a third party?
If I am selling, let’s say, trainers, and the user can find my offer in an LLM, even next to offers from big shopping platforms, I can offer the product more cheaply because the fees fall away.
For resellers, this might be a bit of a stretch, because how do you stand out among hundreds of others to be recommended by an LLM?
But for manufacturers, who surely hold the most authority on their own products, this might open up a whole new world with far less dependency on third-party platforms such as Amazon and others.
I am not saying this will be the future, but it is certainly an interesting thought, methinks.