Will Amazon adopt a “full-hosting model”?

Recently, there have been rumors that Amazon plans to launch a "full-hosting model", similar to the model adopted by AliExpress, Lazada, TikTok Shop, Shopee, Temu and SHEIN. The "full-hosting model" means that the e-commerce platform is fully responsible for store operations, logistics distribution and after-sales service, and the seller is only responsible for product development and supply, similar to the role of a supplier.

This model has some advantages for novice sellers and factory-type sellers who have no operating experience. They can save operating costs and do not need to worry about advertising, logistics, copywriting and pictures. However, this model also has some disadvantages. Sellers have no operating freedom, no right to set prices, and their profit margins will be compressed.

Sellers currently have different opinions on whether Amazon will adopt the "full hosting model". Some believe that Amazon may adopt this model, others believe that it will not, and some believe that Amazon may adopt both the full hosting and platform dual-line parallel models.

First, the full hosting model of emerging platforms has had a certain impact on Amazon, but in the long run, low-price competition is not friendly to sellers. If sellers want to maintain a low-price model, they can only do so by cutting costs, but product quality is difficult to guarantee. At the same time, high-value or patented products usually do not choose low-price competition, but choose large platforms for business.

Secondly, the full-hosting model is not new. Amazon had a VC account in Vendor Central in the early days, where suppliers could sell products directly to Amazon, which would sell and ship products, similar to the current full-hosting model. However, Amazon has not yet developed this model.

In addition, Amazon is facing antitrust charges, and if it adopts a fully managed model, it may attract the attention of regulators. In addition, Amazon's advertising business has always been the focus of profitability, and if it adopts a fully managed model, it may affect the revenue of the advertising business.

Finally, if Amazon adopts a full-hosting model, it may lead to the loss of sellers, the compression of product categories, the loss of consumers, etc. In addition, the full-hosting model may also cause sellers to lose their enthusiasm for research and development, and they will only pursue extreme cost reduction, which is not good for the entire business system.

In general, it is still unknown whether Amazon will adopt a full-hosting model. Sellers should continue to pay attention to market trends. At the same time, the focus should still be on operating their own products well and forging their own path.