The Amazon Marketplace & Liability

Marketplaces
Written By Rick Watson

A few weeks ago Amazon lost an appeal in another case regarding its marketplace sellers regarding liability for what it sells and what eBay used to call being "just a venue."

Apparently, a hoverboard caught on fire and found that California's liability laws found that Amazon was a direct link in the vertical chain of distribution.

Look, it's not as if two random strangers just meet on Amazon's website and transact in a chat room. Amazon has a lot to do with the advertising, conversion funnel, and distribution of these products.

Now this will lead to one of two things.

  1. Amazon will start booking ALL the revenue for marketplace purchases eventually. If you are liable for it, why wouldn't you? This is the "it's inevitable this is our mess" path.

  2. Amazon will continue to fight these lawsuits for a while longer, losing a few cases here and there, but not fundamentally change anything in the near term.

This is the "ignore it as long as we can" path.

In situations like this, Amazon usually takes path 2 for as long as it can, and then later shifts to path 1 once its advantage and competitive moat have been built up enough that others are too far behind to catch up. To be fair, this is the path that most corporations & investors have taken for generations in America.

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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