E-commerce and Online Retail

Online retailers work on thin gross margins and are judged on fulfilment cost per order, return rates and the price of paid traffic; scale pays because warehouse and software costs are fixed while shipping stays variable. Marketplaces invert the model, since third-party sellers own the inventory and the platform collects a referral fee of 8 to 15 percent plus fulfilment and advertising charges, which is where most of Amazon's retail profit growth came from alongside AWS. Growth pulled forward during 2020 and then reversed, leaving over-built capacity and a round of layoffs across the sector. The literature covers Amazon from the outside and from the inside, eBay and Alibaba as marketplaces, the contest with Walmart, and conditions in the warehouses that make same-day delivery work.

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