Thought Leaders in E-Commerce: Ethan McAfee, CEO of Amify (Part 5)

Sramana Mitra: The big problem with the Shopify stock is the threat from Amazon. It has had a very good run because the trend is towards massive growth in ecommerce. Shopify has benefited from that.

Furthermore, there’s been a massive shift from brick-and-mortar to e-commerce from a small merchant point of view. Instead of setting up a shop in downtown, people now setup e-commerce sites on Shopify. That has been the trend.

For sure, Shopify has benefited from that trend. All these people who have setup shops on Shopify, are they going to continue to be on Shopify or are they going to abandon Shopify en masse and move to Amazon?

Ethan McAfee: My sense is that brands hosted on Shopify will continue to shift towards Amazon. A brand is still going to have their website but more and more of the traffic is going to go to Amazon over Shopify. I don’t want to pay $8 shipping and wait eight days.

Sramana Mitra: If there’s a brand that you like and you like to see what else the brand has, you can search on the brand’s website and do the browsing there but buy on Amazon also. That behavior is even easier to do.

Ethan McAfee: The price on Amazon is often cheaper than on the website. Would you buy a television from Sony or would you buy it from BestBuy or Amazon? If you went to Sony to buy a television, the prices are really high. You go to Amazon or BestBuy, you always see a sale.

Brands don’t want to compete against their retail channel partners. They’re going to have a website that sells stuff, but their prices are going to be at suggested retail price rather than the Amazon price.

Just a background, before starting this company I was an investment analyst for 11 years covering the internet sector.

Sramana Mitra: I have a final question for you. What do you think are open areas in the e-commerce space where if you were to start a company today, what kind of a company would you start?

Ethan McAfee: There is a huge amount of white space for brands to create products and sell them direct on the Amazon marketplace. Amazon is really opening up a huge amount of opportunity for small to mid-sized product makers.

If you take some existing product and make it better, you can sell direct to consumer on Amazon versus the old model of selling it to a retailer.

Sramana Mitra: Your opportunity identification is leaning towards proprietary products that are unique and differentiated, and that can go-to-market directly through the Amazon channel.

Ethan McAfee: Yes.

Sramana Mitra: Thank you for your time.

This segment is part 5 in the series : Thought Leaders in E-Commerce: Ethan McAfee, CEO of Amify
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