How Amazon built the largest marketplace in the United States:
1. Which side of the network values the other side more?
Amazon has created the largest audience of online shoppers in the country , which makes it very valuable to sellers. It seems like Amazon's sellers value the buyers more, even though sellers have. That's why sellers keep coming back despite those challenges. 2. Is there an effective and proprietary method for distribution to each side of the marketplace, especially the more highly valued side?
Yes. One of the impressive feats that Amazon pulled off was amassing this large audience by selling products directly to consumers—which was a very difficult, low to zero margin business. Now that they've built that large and proprietary audience of , they don't need to pay to acquire traffic, unlike many other ecommerce retailers. To the contrary, Amazon can actually charge for advertisements on its platform since it already has the traffic.Cross-side network effects are very strong in any buyer-seller marketplace for goods.
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