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Chapter 3: The future of commerce is happening now

Amazon is a pioneer Jeff Bezos has leveraged the Marketplace Model to become a

platform business. The platform allows Amazon to innovate

and dominate at a global scale. In a recent Gartner report

Willful Disruption: Amazon Disrupts Through Scale,

Richness, and Reach, analysts David Smith and Daryl

Plummer caution leaders to Examine Amazon s forays into

all types of services enabled by its platforms such as Amazon

Prime and AWS. Amazon s potential for disruption is almost

unlimited given the strength of its platforms and their

ubiquity.

And it all started with a simple model: The Marketplace

model, in which Amazon sells goods and services from

trusted third parties alongside its own. But what s interesting

about the Amazon story is the fact that the only reason why

Amazon is strong today is that it created this ecosystem that

provides tremendous customer value. They ve been able

to provide business for tens of thousands of entrepreneurs,

for tens of thousands of businesses, that are now relying on

Amazon to grow their business. And that virtuous cycle, that

flywheel effect, that network effect, creates a situation where

last year Amazon captured 53% of all e-commerce growth

in the US. And recently, a survey showed that Amazon s

Marketplace would represent 70% of their business in 2020.