Very few successful e-commerce companies were started in the s. Since then, e-commerce startups have enjoyed a revival. Dozens of companies have gotten traction and venture dollars have followed. Phrases like flash sales, social commerce, and subscription commerce have entered the startup lexicon. As Josh Kopelman points outthe list of the top 15 e-commerce companies has barely changed over the past decade, in sharp contrast to the list of overall top internet companies.

This can be interpreted in one of two ways. The bull case is that startups neglected e-commerce and are now waking up to the opportunity. The key equation driving e-commerce is: The bear case is that scale and brand effects make e-commerce incumbents nearly unbeatable. The only way to compete is to sell used stuff or make your own products or provide a marketplace for those things.

The fat head large incumbents and the long tail artisanal shops will thrive, but the middle of the distribution will suffer. The public markets seem to agree with this assessment, e. Overstock trades at 0. What most people agree on is that e-commerce as a whole will continue to grow rapidly and eat into offline commerce. In the steady state, offline commerce will serve only two purposes: All other commerce will happen online. General thoughts on the eCommerce technology enabler ecosystem demandware, channeladvisor, baazarvoice et al?

Asking the obvious question: Decentralize commerce — eliminate the middle man — and you win. Great write up on this by Albert http: I think if they serve the small companies they are very interesting. Shopify, Stripe, Magento ebay etc. Not as sure about the ones who serve the middle of the distribution.

Transactions are one thing but supply chain, fullfullment etc are another. The bear case is correct if you compete exclusively on price. How many of us have a relationship with Amazon? Or really trust the product reviews? Build a list of customers that trust you, and your LCV will grow tremendously.

Always enjoy your posts Chris, especially this one! The closest thing to our artwork having a barcode is the artist signature. Another factor that has historically inhibited e-commerce startups says she with considerable feeling, having spent a disproportionately large amount of time dealing with this for https: Which is why challengers like https: Time to revert time and do it better than last time.

Pinterest is in such an enviable position right now. Great post as usual, except for the last line. It seems a tad bombastic to state that all other commerce except for immediacy and experiences will happen online. Unless your definition of immediacy and experience is so broad that it renders the two categories useless. The argument is everything else is easier, cheaper etc online. Ecommerce has nowhere to go but up. Agree with overall analysis.

Just started on https: Are there UPC codes on digital goods? Here is my conundrum. Will any of these companies see a superior multiple to that? Did the VCs that invested in these companies use 1X as their planned exit value?

I understand there is an old VC investment adage: Great post, Chris — I think the biggest opportunity in e-commerce right now are vertically integrated companies that combine strong product design with a unique brand experience. It is hard to pull off though with product design and supply chain management being the 2 toughest challenges. You may want to reconsider. Gumroad seems to be taking your approach.

It depends how you define easier. No one wants to buy a car straight from online. They want to drive and touch and feel the movement. I think in this case we have the element of immediacy, experiences, and physicality.

Offline will continue to be a place you go and touch stuff, but they will no longer hold inventory, do fulfillment, handle payment, etc. A huge number of mom and pop shops are thriving online.

Online delivery will get down to a few hours but the argument goes there will still be times someone needs to run down the street for essentials or just want to buy and take something on a whim. A very seasoned and savvy merchant once told me, Internet commerce is good for two things — price and exclusives. Amazon will beat you on price, so you have to beat it on exclusives. There are a lot of price based shoppers, but I firmly believe a large segment of the market are value based shoppers.

I think one of the areas not fully explored yet is the democratization of product knowledge. Pinterest has a great start on the inspirational side of the equation, but the informational side is wide open. The orange bibs deliver that solution. Lots of room for ancillary tech in the space as incumbent platforms are not easy to replace, especially in established large business processes.

As more manufacturers go direct to consumer growth should remain pretty self-sustaining. Business will not succumb to using third party channels for all distribution. Differentiation of brand will come from owning their own distribution, and adding as much value to the consumer as possible.

I think the Target and Amazon break-up is a good example of such intent. This to me connotes something so much more than artisanal or long-tail. Moral of the story — online consumer behavior and the e-commerce pie is growing at a CAGR that is leading to a ton of revenue to be made across the large, medium, and small guys.

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See Fab, Warby, bonobos etc. Not sure I agree but that is the debate people are having. Much harder than in the offline world for the new entrant or boutique to win against the scale player on service.

Also just raises the costs to compete for everyone. Amazon trades at 1. However, creating an experience for customers goes a long way, whether that experience is online or offline. The brick and mortar stores with the highest sales per sq foot are all brands that create unmatched experiences that customers are willing to pay a premium for: The companies I find most interesting in the e-commerce space are combining online and offline experiences in disruptive ways.

After working for brick and mortar retailers we started our company, For the Makers, in order to create an actionable Pinterest. These are companies that may or may not manufacture their own goods but actually allow you to create things on their site and then buy them. My question is what will all those mobile saas serving local shops do if your case is right as they are marketing themselves as they have the answer to the impending switch to online ecommerce from offline?

This makes me want to buy today despite that premium. We were braced for a seasonally bad month but mobile especially led to a record setting month for us. Likewise, users who engage in our social features have 3 to 4x LTV vs.

They hold most the cards in e-commerce. But, we and others can compete in an Amazon world and build a really big and interesting business. How do I know? Better product discovery and browsing.

Amazon is a catalogue. Fab is a discovery engine. No one has yet solved for that. Just making it fun, colorful, emotional.

Who says online shopping has to be so drab and transactional? Fab is still in the early stages of making a market for design goods. Brands are emotional experiences not transactions. There are still many great opportunities to build long lasting e-commerce brands. These sites are enjoying success for two reasons: So, I am bullish on e-commerce and even more bullish on those that successfully integrate mobile payments into their system. A great value for us.

Warby Parker2 marketplaces ebay, etsy etc which as you know are super hard to build but very valuable, 3 technology providers for the long tail shopify, stripe4 perhaps something to do with new platforms like mobile. Another hurdle for me as a VC in ecommerce investments is that the operational complexity as you scale is a step-function. In thin gross-margin verticals, this can lead to fatal missteps. New marketplaces and niche e-commerce are an improvements but not new as models.

Marketing has improved with links to, and coming from social networks improving findability for the sites. At Chirpify, we believe that social commerce has the potential to change the experience by integrating the e-commerce into the networks where people are going to discover new products and offers.

The component that completes the experience is enabling a frictionless payment experience. Thats a new model and one that disrupts existing e-commerce.

The dilemma is that very few startups will survive early hurdles for long enough for the CX to become the distinguishing trademark. And top-shelf customer service already comes at too udemy forex watchers a cost to many in the early stages. My loyalty comes from satisfaction and past problems solved.

The process took 4 months another two to get my money back and was a nightmare. My emails were replied to on average in a week. There is no customer service hotline. No human being to speak to, to solve my problem of returning a faulty item.

I hope their business fails amidst a mushroom cloud. We are launching a new ecommerce approach that we term win-win commerce at flashpurchase. The point you are missing, is the changing landscape of payments in the offline world. Where would you classify a vendor selling stuff and collecting money with square?

The other area where I think e-commerce will do well is in fulfilling the long forgotten vision of mass customization think J.

Holding consumer information yields greater loyalty, opportunity to create better non commodity margin structure, and differentiate versus traditional retailers.

Generally I agree VCs are stuffing too much money into successful web companies. I tend to agree with you, Bill Gurley, and others that e-commerce seems like a tough sector for VCs. Yeah I was definitely oversimplifying. Also it varies by type of business of course e.

There are many things that people do that defy economic logic. On the few times I do join them finding a spot proves they are not alone. Yes, I can get five people together at a hackathon and build a cool tool, but there will be hundreds chasing me. Putting up presence like that? Not even on the same scale. Re medium sized online retailers: If same stuff as Amazon, how do they compete? No different than the physical aspect of a slot machine.

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Look it would be much easier to just put the game on your phone and let you play it in your room. Look I hate how many albums did tupac shakur sell. Amazon will likely win. But — the medium guys I spoke of will be specialty brands with a significant quantity of SKUs that offer an ability for the consumer to connect directly with the brand or a unique experience.

I work primarily in the apparel space, so those are the ones that come quickly to mind — J. Crew, Brooks Brothers, Coach, Orvis, Under Armour, etc.

Bonobos, CustomInk, ModCloth, etc. Many of the multi-brand retailers with a niche business are doing brisque businesses as well — Motorcycle Superstore, Freshpair, etc. They may not be VC size returns, but I think there is an opportunity for founders, who can pioneer the sale of products that appear hard to sell online, and show the Amazon, Walmart, Targets, etc.

This to me was the story with Zappos and Diapers. Amazon, in those cases, has shown it is a buyer of retail ideas where the retailers created deep connections with their customers, selling products that traditionally are sold easier offline, which was the case with Zappos customers like to try on shoes and there are a lot of returns and Diapers.

For businesses selling online, the main differentiator between having your own shop or selling through Amazon has to do with their online identity.

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Amazon is a great channel to sell your products, but I believe that businesses also want to have their online shop in order to protect their online identity and show a more professional image online. Full disclosure, I am the founder of OmbuShop eCommerce SaaS solution for Latin America so I might be a little biased. Even more difficult is when you have to manage both dropshipping and inventory. Is this not true of any business though? The hardest thing for an upstart to overcome is always the incumbents infrastructure; be that physical, software, IP, etc.

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This can be done without VC, but it is a long road and even with it, the time frames to get to a comfortable level is likely longer than other models upstarts may be considering. Oh, seems to me that companies like Shopify are very well positioned for the long tail of e-commerce.

Excellent post and discussion. Agree in general with offline steady state premise. Most online retail experiences including Amazon do very little to help consumers intelligently decide what to buy. It is true for all businesses. But the issue is how much money for what return. I arbitrage in binary options demo account 60 sec saying in this case the moat ongc shares buy or sell size and low margins.

If you buy 1, times more than I do you will get a better price, same for shipping, warehousing, payment terms, cost of capital. If margins are low all those savings mean you will be making trading brokerage charges india and I will be losing money at the exact same price.

I did a guest post on this topic here — http: Example economics here — http: A social shopping marketplace which connects talented independent sellers with customers looking mechanical binary options strategy system discover and support them. One way to differentiate yourself from the incumbents is to offer impeccable customer service.

From my experience with e-comm customers, they pretty much expect mediocrity, so when you reply to their concerned emails and act like a human being includes using normal English it makes them very happy.

Taking your side in this part of the discussion, Philip. Chris, you and I are guys, and while not all guys are the derivative in stock market and of course not all women are the samethere are differences in what constitutes enjoyment for different people.

My wife and grown daughter make a day of going shopping. They would scream if they made selections and then had to wait for the item to be shipped. Hsbc bank india forex rates check the item they want for flaws, fabrication quality, nuances of fit, etc. And then they want to come home and go through it all again.

I order a ton online, and frankly want it when I complete the check-out. This argument is valid for comparing big retail online stores like Amazon but should also focus on the new e-commerce service providers like SaaS, mobile apps and new payment gateways. I would like to compare the gross sales of all Shopify stores wikipedia says This is a very fractioned market and there are many other SaaS new players: I see the e-commerce market as a fast growing and innovative place but there is still, and thank good, no winner takes it all situation here.

There are several competitors in the space e. Coastal Contacts, EyeBuyDirect, eyeglassUSA, etcbut Warby Parker built a brand. This also brings eli5 stock options my second point — I agree overstock marketing strategy most of your points. However, I think brand plays an important role in e-commerce. In the case of traditional retailers such as William Sonoma. I directionally agree, but think you might be over estimating the importance of paid channels.

Incumbents are pretty quick to catch on to new paid overstock marketing strategy, and anecdotally it seems a lot of startups have lowered CAC through organic channels. Chris — I wrote out a pretty long detailed response to this as a comment last night.

Did you not get it? Maybe it was a disqus problem. Comments should be automatically approved. Traditional ecommerce models i. Look at the success of Alibaba Group, Mercado Libre, Rakuten, perhaps Buy. Those companies all have or will generate venture scale returns for investors.

I guess the assumption is overall commerce will be constrained by, say, GDP growth, so if online is growing faster than that, offline will shrink. If there was ever a retailer who can and should be disrupted its WAG Walgreens. Jason, Fab is awesome but I think the question of scale is at the heart of this post. Every one of those top 15 retailers has either built their brands off the back of other more famous mass market brands or vertically integrated to make and sell their own products.

Fab will have to do the same to join the Top 15 club. If you look at the financials of a few of those listed — Best Buy, JCPenney etc. Vertically-focused retailers with lean operations and the potential for global scale are strong bets for the future. Anyone else is Amazon fodder. The comScore data is pretty useful and timely. Scaling up for ecomm means capital investments.

Few ecom startups that I see have any idea of SEO or digital marketing. That kills them before they get going, as they fail to bake this into their products. You have overhead associated with keeping those customers email sends, employees powering those emails, segmentation tools, etc.

I think cases like this in certain categories will exist for some time. Amazon or eBay may have the resources to execute this too, but in the end it really boils down to how comfortable the end consumer is buying things online, and what percentage of their total purchases are shifted there.

Would love to dedicate an episode of my eCommerce show to discuss this further if any posters are interested. Build My Online Store in iTunes. Keep that as variable cost s. I agree with this especially in Arfrica. People use to say Africa is the black continent therefore most eCommerce companies do not enter this market. I also know that payment and logistics have been an issue as well and that is why my startup Keejul plans to bring ebooks to Africa.

Or because these other companies have the brand, reputation and understand the local market it will be more difficult for Amazon to make an entrance. The main question, as you point out, is can an Amazon be unseated by a challenger who hyper-optimizes for social discovery? I am ashamed to say I knew nothing of Fab before you posted.

So I decided to visit the site and make a purchase to understand the flow. Is this typical or was this a one-off problem? Our ambition is to be an IKEA scale business. IKEA was not built in a year either. Like today we are launching a line of Blu Dot furniture that was made exclusively for Fab. Down and dirty retail? Unfortunately the product you selected was still part of our older sell first model in which first we sell it, then we buy it from the designer, and then they ship it to us, and then we send it to you.

Scaling these businesses has to be on both the GMV and contribution model side, with CM being more important over time. Harder to do on commodity products, easier on value-add unique and hard to buy products. Hey Bill I think you have to focus on merchandising aimed at a specific customer. Look at companies like companies like ASOS which trades at 3.

Nastygal is another company that quietly went from eBay to million run rate in 4 years. These girls are not going to Amazon to discover anything. These are going to be the kind of stores that chip away at Amazon in certain sectors. Spot on with this write-up, I truly feel this web site needs much more attention. Thanks for ones marvelous posting! I will ensure that I bookmark your blog and will eventually come back later in life.

I want to encourage continue your great work, have a nice weekend! Since there is no middleman involved, the prices are almost always lesser than brick and mortar stores. Baby — Oye — As the name suggest, this website is famous for baby products like Diapers, Bath, Skincare and Gifts.

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E-commerce startups Very few successful e-commerce companies were started in the s. August 15, at Pinterest has super high purchasing intent so is very interesting and relevant to commerce. I agree, marketplaces are probably more interesting than ever. August 16, at August 16, at 1: Simple examples of this are Spreadshirt, CustomInk, and Gemvara.

August 16, at 2: Jason Goldberg, CEO of Fab here. August 16, at 3: Do you mean owning the marketplaces, selling through marketplaces, or both? August 16, at 4: August 16, at 5: August 16, at 6: August 16, at 7: August 16, at 9: I think you forget that a majority of the U. I think this is the challenge we have when we assume everybody is like us. I think he is referring to Shopify or similar platforms For businesses selling online, the main differentiator between having your own shop or selling through Amazon has to do with their online identity.

Tuan Le Dinh says: Will service like ShopKick help offline commerce? I think they are doing a great job. August 16, at 8: August 17, at August 17, at 2: August 17, at 3: August 17, at 1: August 17, at 4: You guys have obviously done a remarkable job. August 17, at 5: August 17, at 9: Who ever makes online shopping most fun will win. Whats the funnest thing you did all all week?

I watched a movie. August 18, at 4: August 19, at 8: August 20, at 3: August 20, at 4: August 20, at 2: August 20, at 7: August 21, at 6: August 21, at 8: August 22, at 8: Build My Online Store in iTunes — Terry. August 23, at August 23, at 3: August 23, at 9: August 24, at 5: August 24, at 6: August 25, at 8: August 28, at August 30, at And, we just getting started…. September 1, at 1: September 3, at Basics of eCommerce - CHARMCITY MARKETING SOLUTIONS CHARMCITY MARKETING SOLUTIONS.

May 15, at 4: June 22, at 6: Can Food52 turn its small community into a big business? August 19, at 6: The Smart Money in Venture Capital Is Investing Less in eCommerce. The Smart Money in Venture Capital Is Investing Less in eCommerce CB Insights Blog.

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