I have been a long-time fan of the ecommerce industry. As offline retailers were struggling to compete with online retailers, many large chains went out of business, and an increasing amount of consumer buying moved online. For a long time, ecommerce startups were printing money in what felt like a “can’t lose” industry. But, like with any gold rush, empowered by ecommerce platforms like Shopify -- that made it quick and inexpensive to get your online store up and running -- ecommerce attracted a bunch of competitors trying to get their products discovered.
But, what happens when millions of ecommerce stores are fighting to get discovered on only three primary websites -- Google, Facebook and Amazon -- where consumers are looking for potential shopping solutions? All hell breaks loose, wreaking havoc on your cost of customer acquisition and your bottom line profits. This means the only long term winners in ecommerce are, you guessed it, Google, Facebook and Amazon. These three keep raking in all the highly-profitable advertising dollars while the ecommerce businesses themselves are starting to struggle to make a profit. Allow me to explain.
Read the rest of this post in Entrepreneur, which I guest authored this week.
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