From the abuse of markets to the holy grail of non-mediation

How the mediation of platforms, particularly those of marketplaces, has reduced the importance of the relationship with the customer by breaking the quality of the relationship between the producer/merchant and the customer.

I’ll illustrate my point with some personal anecdotes and provide you with ways to reverse this harmful trend in terms of purchasing power and good consumer information. I will not talk about the Chinese model, which is very far from ours.

a little history

In 1997, she co-launched Alapage.com (a book and record store), the first successful e-commerce site in France, but it was not to hold for long after it was acquired by France Telecom.

We have been pioneers in many areas of online sales, especially belonging to small partners, an e-business principle that quickly propelled us to the top of merchants at the time.

After setting up the affiliate process, I quickly realized that selling the book would not be a huge financial gain for affiliates who only earned 5%. Especially since from the second purchase the customer bought directly on Alapage.com. However, for an affiliate site to recommend a book or register with a link to a sales site, it has real editorial value.

Affiliate still exists, especially on high-tech product consulting sites, but relationships are no longer exclusive between merchant and affiliate partner.

Who are the mediators who ask the questions

Today, e-merchants in particular have become affiliates in established markets such as Amazon, Rakuten, La Fnac, Uber, Ebay, etc. These merchants pay exorbitant commissions to the markets, in return for the benefit of the purchasing power of the consumers.

During the launch of Alapage.com, I received many people who offered me loyalty programs of all kinds. For example, points that customers earn according to incomprehensible mathematical laws, cashback systems with promotional codes, referrals of customers after purchase with partial redemption promises, etc.

I soon thought that all these forms of loyalty were parasitic on our activity because they added a medium in an ecosystem with fairly low margins. However, many startups have nonetheless managed to present themselves in the selling process and create margin with added values ​​that often seemed dubious to me.

I have naively thought since 1999, that the Internet would be an ideal tool for letting go of intermediaries, and that after quick shopping, direct sales by the manufacturer would become the norm, and merchants would have no place in the world of online sales.

From the 2000s, there were other brokers like price comparisons (Kelkoo, Leguide, etc.). For manufacturers and merchants of non-manufacturing products, this was a godsend, it was truly one-stop shopping search engines.

But for merchants of identical industrial products, the comparison was only interesting to customers. Margins plummeted causing the deaths of many e-retailers who did not build their small margin business model on mega-volumes.

Google has partially killed those comparison services that depend entirely on ranking.

Platform inefficiency

Let me share with you a story that happened to me a few days ago with Rentalcars. Car was pre-booked near Rio airport by me. When we arrived from Paris (exhausted), the rental car company made us wait at 1:30 before explaining to us that we were late (we arrived at 9:15 pm instead of 8:30 pm due to a plane delay) and that we no longer had cars. Rentalcars did not respond to our call through the rental company. Unfortunately the rental amount has been deducted. After I complained to Rentalcars, they explained to me that I should have contacted them immediately and that I was completely wrong.

Here is another anecdote that happened to me with permisapoints.fr. I had booked a points recovery course there. She showed up one morning at eight in the morning, it was raining, it was cold and there was no shelter. We were 5 people waiting with me for 2 hours but no one came, permisapoints.fr didn’t reply until several days later, without apologizing and explaining that I had to book again only for 80€ more expensive than my first order. I soon found a professional online who offered me a price under 60€ from the platform.

I had the same kind of problem booking a plane on Edreams with an Air France flight. The two organizations went through the money and I was settled after only one year. Today, purchase prices are almost the same on the platforms as they are on the websites of airlines. The platforms’ only concern is the completeness of the offer. So it is enough to buy well to consult with the platform and book directly with the company; It seems to me that the future of these platforms is in jeopardy.

One can also question the real interest in buying from Amazon Marketplace or Ebay when the seller already has Prestashop or Shopify.

Even worse, what is the concern with merchant demand when a manufacturer must be able to deliver directly in B2B or B2C and be able to organize logistics and temporary stock locally. As for Made in France, the question does not arise.

Finally, why go with Uber when VTC services often leave something to be desired; That drivers’ loss of profits, which is equivalent to the exorbitant commission for pallets, clearly affects their working conditions, hourly overloads, and directly affects their mood and road safety. An online service operated by VTC with ratings would be more than enough to give me confidence.

Most of these platforms, like Uber Eats, seem to aim to break the direct relationship between the seller and the customer, and in fact we see the Uber Eats logo too big and the restaurateur logo too small. If one wishes to request information on allergens, it is impossible to get an immediate and lively answer. In addition, Uber Eats, like others, in addition to the large commission that they give themselves, is now charging for placing restaurants in the results lists, which is clearly incompatible with the quality of customers.

Doctolib cannot even guarantee the quality of all providers.

One aberration in this model is also that manufacturers and sellers often abandon the right digital tools to communicate and sell directly by depriving themselves of margins and constructive customer relationships.

The added value of e-commerce

The three keys to success in e-commerce are price, completeness of supply, and trust; Everything that goes in this direction is heading towards success.

  1. price, we immediately understand the reason; It is an asset for the e-commerce trader. A broker who promises a lower price will never have an added advantage of purchasing power. Even a loyalty service like Amazon Prime (free transfer), is a small gain for a customer who will in any case pay the intrinsic price over time. In fact, this subscription encourages customers to use it without comparing prices. Let’s not talk about cashback programs, loyalty coupons, and even worse companies that drive a customer away after a purchase with the promise of permanent discounts.
  2. Trust does not have to think when placing an order, product quality, match, and any issues with payment, delivery and after-sales service.
    Uber, Amazon Marketplace, Rentalcars, Permisapoints, Airbnb, Booking, Opodo, etc. Claiming two main value-added qualities: being a trusted third party to the customer and demonstrating the merchant. It is clear that trust is not present on most of these platforms. Only Amazon Marketplace, for image reasons, makes good customer relationship management with great service a point of pride. But at what cost? The commissions that merchants pay to the markets depending on the services and platforms range from about 8% to 30%.
  3. Comprehensiveness means covering an entire show, at least in its category. This is what allows an online bookseller to sell all available books, while most physical bookstores only offer 10%. It is also what allows the market to market a very large catalog of products like Amazon or Aliexpress and thus each becomes a search engine in its own way.

The truth is that most of these brokers express themselves and do not care about the end customers.

Since 2010, I have co-developed Allobois.com, a marketplace that aims to provide firewood consumers to order their fuel directly from forest workers and pellet manufacturers (compressed wood).

Allobois margin is 2.5% on products sold. Although the project was not very successful, it still stands and does not lose money. With this note, I confirm that the margins for intermediate platforms are often inappropriate.

Which direction to take

It’s time to find new ways not to be intermediated, and this is in all areas of e-business.

Most professions today are only accessible after diplomas, and often rely on certifications, the role of which can only grow.
I am convinced that part of the future of trusted third parties will belong to the markets deployed by business sectors, manufacturers groups, trade associations and agricultural cooperatives.

The technology of these new markets must be realistic to gain speed and cost. For example using very light databases, capable of opening in RAM; These technical items have been around for a long time but unfortunately are of little use.

Those who launch platforms with small margins, open and adaptable to all types of sales services, which will combine the advantages of price, reliability and completeness, will provide beneficial and sustainable service to manufacturers, dealers and customers.

There’s a lot of money to be made for “new barbarian” startups in the sense that Jean-Louis Gash, former No. 2 at Apple, gave them 10 years before Google, Amazon and Facebook came along.

The icing on the cake: these platforms can be hosted with European tools because all the publishing and hosting technologies are on our continent, even the hardware. That’s not what people sensitive to pro-American lobbyists, who are close to our government and much of our administration, think so quick to push AWS, Google Cloud, or Azure as the absurdity of the Health DataHub.

The data will benefit from being transparent to the general public, and thus will make it possible to monitor and optimize polluting energy and expenditures from manufacturing to delivery.

Let’s dream again.

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