Digital Book World has an intriguing analysis up today about Amazon’s “weak points.”

AmazonWith all the chatter about how “invincible” Amazon is and how much power they wield in publishing today, Andrew Rhomberg highlights some of the areas where Amazon actually might not be the Best of All—areas where a savvy competitor might find a way to wedge their foot into the door.

So what does Rhomberg perceive the weaknesses are?

 Social media
• A too-established user base who won’t welcome interface changes
• Nobody is ‘addicted’ to it
• Does not share its data well with other stakeholders

There’s more in the article. Happy reading!

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  1. I beg to differ with one point. Amazon Prime is addictive! Once there is no shipping charge, Amazon becomes the retailers of choice. Don’t feel like dragging yourself to the pet supplies store for those treats the grocery store doesn’t carry? Amazon’s got them! Running low on K-cups? Amazon has a huge variety. Prime is the gateway drug to online shopping.

  2. Were Amazon in the third grade, its report card would include the note, “Doesn’t play well with others.” Amazon both angers and scares publishers and authors who supply it with ebooks and that can be a dangerous game to play.

    Boeing provides a double illustration of how that game is played.

    First, Boeing is huge enough it could save money by running its own package service and quasi-airline shuttling mail, parts, and staff between its various plants. It could even supply and service those planes cheaply itself. It doesn’t because UPS, FedEx and the airlines are its customers and its executives are smart enough not to compete with customers.

    Amazon isn’t that clever. It’s started its own publishing company, competing with the publishers whose books it needs. In the short run, that means sales. In the long run, that’s a major blunder.

    Second, it’s no secret that’s there’s a lot of ill-will between Boeing management and Seattle’s aerospace unions. Boeing moved its upper management to Chicago, a terrible city in which to live, to make sure it isn’t under pressure to tilt toward Seattle for design and production. It can’t leave Seattle entirely. It has too much investment in the region. But it can use its decision-making power to squeeze Seattle’s unions.

    In much the same way, publishers (particularly the larger ones) are searching for ways to acquire leverage over Amazon. The Obama-administration’s DOJ may have blocked one of those moves (much as it has tried to block Boeing’s shift of some production to South Carolina). But in the end, where there’s a will, there’ll be a way. Amazon is already recognized as the enemy of independent publishing, invading areas other than retail, hoarding data and dictating how business is done. But it’s reign on top can’t last forever.

    In short, Amazon is the rich kid who dominates the playground and controls the toys but ‘doesn’t play well with others.’ There’ll be more than a little rejoicing when its slid begins. It’s chief weakness is how it has been using its strength.

  3. Hmmm so what I take away from this is that there are some key areas where Amazon is not doing well but everyone thinks they have the capability to do better/more in.

    So the argument is that Amazon is going to expand and do better when it (some say inevitably) fills in those niches.

    From a stock holders point of view that is a very good thing. I do not think any bank/financial institution is on anyone’s ‘plays well with others’ good list but they all are making record profits and earnings for their stock holders.


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