Reply to thread

Message: <blockquote data-quote="Olaf the Stout" data-source="post: 5063626" data-attributes="member: 13703">This is true to a certain extent.  However, some online stores have advantages over other online stores which will limit the competition.Firstly, economies of scale.  Amazon pays a cheaper wholesale price for a lot of its goods because it can buy a really large amount of them at once.  Buying in bulk gets it a cheaper price, allowing it to either:(a) sell the good for the same price as its competitors and make more proft than them;(b) sell it for a lower price than its competitors and still make the same profit as them; or(c) sell it for a lower price than its competitors can even buy the good for and therefore price them out of the marketSecond, brand recognition.  Everybody knows about Amazon.  I could create a store that does the exact same thing as Amazon but there is almost no way that I could be as successful in the short term.  Even in the long term I would need to lose millions and millions of dollars up front, just to get to near their level.  Why is that?  People know about Amazon.  People like familiarity.  Sure, some things change, but a lot don't.  I haven't seen anyone displace Microsoft in the operating software market.  Coke is pretty dominant in the soft drink market, etc.,There are other barriers but I think those would be the main 2.Olaf the Stout</blockquote>