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Disclosure: My wife is a 3rd party merchant through Amazon's Fulfillment By Amazon (FBA) program. I guess I'm her "CIO".

The online retail space has been evolving over the past couple of years, as we all can tell. Since 1992, when the US Supreme Court ruled that sales tax could not be collected from a state where there was no physical business presence, online retail has operated in an essentially un-taxed environment. You were always supposed to track online sales made to customers in your own state, but there was a competitive advantage over brick & mortar (BM) retail stores. Companies like Amazon could locate their warehouses in Arizona and do business in California without being taxed in California; the Californian citizens were supposed to calculate their tax and remit it on their tax forms. You can probably see that individual citizens wouldn't report this, and the states felt they were losing out on a lot of revenue.

So, the BM stores lobbied the states to implement collection policies; it would become the online retailer's responsibility to collect the sales tax and remit it to the state. Additionally, many states have been changing their nexus laws, such that 3rd party sellers that use Amazon's warehouses to hold their products, a transaction is taxable if it is shipped from a warehouse to a customer in that state, even if the object owner is out of state. This will make online retail less competitive on the pricing side.

But, what BM retail stores forget is that they have a competitive advantage too, they are located closer to the customer at the point of sale. When someone goes into the store, they can check out and walk out of the store with the item in hand (no 2 day wait on getting your item). Additionally, they can impulse shop from the store's inventory. Amazon looks at this and says, if I'm going to be taxes as if I have a physical presence, then I might as well have a physical presence, and they have begun building "micro warehouses" in major cities across the country. Now, you will be able to order online, get the vastly superior inventory storage options that a warehouse provides, and get same-day shipping to the customer, so the customer can have the item in hand by the end of the business day.

http://www.facebook.com/advertising/?campaign_id=229565125950&placement=emu&creative=tfa&keyword=brd
http://www.amazonservices.com/content/product-ads-on-amazon.htm/ref=az_mm_pads?ld=AZPADSMakeM

Those two both seem to be strong contenders and both have a large customer base. I think Google has a strong place, but I *don't* know that they are a monopoly.

If you don't take your store online that's your fault. Amazon helps you sell online. As does eBay. A couple of weeks ago I placed an order with Amazon, and will place another in the next couple of days, and the items come from other businesses. J&R Music and Computer World is one of Amazon's stores. Etsy is a community and market place for artists, deviantART is another. And obviously the net makes it easier to find jobs whether permanent full-time employment or short term contract work.

Pretty soon, brick n mortar stores will die off and you'll never be able to see an item before you order it, and/or you'll be complaining about the walmartization of cities that destroy local mom n pop stores. I know way to many people who complain about $4.50 cables costing $40 at brick n mortar and buying online, and then complain about lack of good jobs locally.

Actually the net levels the playing field. Brick and mortar stores can only sell locally but open an online store and you can sell anywhere. Partner with an big online seller and marketing will be easier.

Falcon

Here's the info I should have linked to:
Fulfillment by Amazon

This 3rd party fulfillment seems to be one of Amazon's highest growth areas.

I used to be like you, I used to worship the ground that Steve walked on, but face reality. Apple is Microsoft.

You're making quite a bad assumption there. Just because I don't have a problem with one policy, that doesn't make me a Steve Jobs worshiper.

So lemme get this straight, if I have an application that has content(such as pizzas! Read the fine print, it actually includes physical items) that Apple pays nothing for, doesn't host, doesn't create etc, then I'm still required to offer them a cut?

This is a common thing in the retail world. Take a look at Amazon, with their Amazon Seller Central Marketplace they sell items that other people create, handle, and ship without any involvement by Amazon other than advertisement and billing. Amazon takes a cut for this service and it all works out. Ebay also has this model, as well as many other services. Apple is just doing the same, the only thing they are saying is that an app has to offer Apple's store as one way of buying products - not the only way.

If you think that's evil then basically you think a large chunk of the retail world is evil. Hey, maybe it is! The reality is that's the way it all works right now and you disagree with it you really should be out shouting at all the companies that have a merchant-type program, not just Apple in this one situation.

Err...yes, because Amazon's last auction site worked so well. Have you noticed that eBay is becoming more like Amazon? Payments to go through eBay's payment processor (PayPal). Greater concentration on fixed price (Buy It Now). Seller based browsing. Amazon had all those things first.

Amazon already competes with eBay in online selling. Do they really need a variable price mechanism as well? It's one of those areas that scales naturally to a monopoly. Sellers want to run single auctions that maximize the buyers (more potential buyers means a higher top bid).

Auctions is actually a niche market. It works best for unique objects, where the seller does not know how much a buyer is willing to pay. One of the challenges for eBay in recent years is that many of the people who have used auctions would really prefer a fixed price setting but have had to use auctions because that was the only place they could find their product.

In far more countries than Amazon and selling through both auctions and fixed price, eBay's earnings are still lower than Amazon. Amazon would be better off launching in a new country (e.g. India or Australia) rather than trying to invade the auction market.

The reason for Checkout By Amazon is simple. Amazon is moving to a model where people can pick and choose what Amazon services to use in selling their product. There's the Amazon Advantage program, where the product is in Amazon's warehouse, discoverable on Amazon's site, paid for through Amazon's checkout system, and shipped by Amazon (possibly bundled with other items). However, if people prefer, they can purchase those services separately:

1. Store in Amazon's warehouse and ship with Amazon's discounts.

2. Discovery through Amazon's sites (if they don't use Amazon's checkout, they can't have a detail page but can still purchase a link from Amazon to their site that appears in search results and on other detail pages).

3. Pay through Amazon's payment processor. Amazon already had Simple Pay. It used to be called the Honor System. Checkout by Amazon is new only in that one couldn't use it separately previously but had to list the item on Amazon's site.

Amazon is also different from eBay in that it offers listing on defined pages where all listings of a certain product are on the same page. This is the reverse of the auctions model, where every listing is essentially its own product. Discovery is expensive and hard. Payment is straight forward by comparison. As such, if you want to see an eBay competitor, you should look for a company that is competitive in search rather than in payment. Amazon currently does not have that kind of search, and it would be expensive for them to develop it (with no guarantee of success, see A9, where years of development failed to produce results).

Err...yes, because Amazon's last auction site worked so well. Have you noticed that eBay is becoming more like Amazon? Payments to go through eBay's payment processor (PayPal). Greater concentration on fixed price (Buy It Now). Seller based browsing. Amazon had all those things first.

Amazon already competes with eBay in online selling. Do they really need a variable price mechanism as well? It's one of those areas that scales naturally to a monopoly. Sellers want to run single auctions that maximize the buyers (more potential buyers means a higher top bid).

Auctions is actually a niche market. It works best for unique objects, where the seller does not know how much a buyer is willing to pay. One of the challenges for eBay in recent years is that many of the people who have used auctions would really prefer a fixed price setting but have had to use auctions because that was the only place they could find their product.

In far more countries than Amazon and selling through both auctions and fixed price, eBay's earnings are still lower than Amazon. Amazon would be better off launching in a new country (e.g. India or Australia) rather than trying to invade the auction market.

The reason for Checkout By Amazon is simple. Amazon is moving to a model where people can pick and choose what Amazon services to use in selling their product. There's the Amazon Advantage program, where the product is in Amazon's warehouse, discoverable on Amazon's site, paid for through Amazon's checkout system, and shipped by Amazon (possibly bundled with other items). However, if people prefer, they can purchase those services separately:

1. Store in Amazon's warehouse and ship with Amazon's discounts.

2. Discovery through Amazon's sites (if they don't use Amazon's checkout, they can't have a detail page but can still purchase a link from Amazon to their site that appears in search results and on other detail pages).

3. Pay through Amazon's payment processor. Amazon already had Simple Pay. It used to be called the Honor System. Checkout by Amazon is new only in that one couldn't use it separately previously but had to list the item on Amazon's site.

Amazon is also different from eBay in that it offers listing on defined pages where all listings of a certain product are on the same page. This is the reverse of the auctions model, where every listing is essentially its own product. Discovery is expensive and hard. Payment is straight forward by comparison. As such, if you want to see an eBay competitor, you should look for a company that is competitive in search rather than in payment. Amazon currently does not have that kind of search, and it would be expensive for them to develop it (with no guarantee of success, see A9, where years of development failed to produce results).