Imagine If The Justice Department Limited Amazon's Marketplace Fees

SaaS
Written By Rick Watson

By far one of the biggest news items recently is Uber making a bid to buy Grubhub. This could be big news for the restaurant industry. With a solid arrow pointing up long-term for cloud kitchen concepts, the industry is definitely looking to consolidate to a smaller number of players.

That coupled with news in the last month that NYC City Council is considering regulation to limit the fees from delivery apps to 10%, even with advertising/placement fees.

I can see both sides of this. One, nothing is forcing these restaurants to participate. The free market demands if the prices get too high, smaller restaurants will bypass these apps and encourage consumers to order online directly through the restaurant. Instead of DNVBs, a new wave of DNVRs would flourish. Similar to selling on a marketplace, they can offer a more limited menu, when they are on DoorDash or Uber Eats.

Imagine if the Justice Department limited Amazon's total fees to 15%, even with advertising and fulfillment services were included citing "small businesses can't pay up to 30-40% of their margin to Amazon's tax”.

It would be a sea change in the industry.

That is one thought which makes me think this legislation will not become law.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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