Amazon has released Amazon Fire TV, and so far it’s been a success for the e-commerce giant. After losing $437 million in the fourth quarter of 2014, they surprised the industry with $25.4 billion in revenue during the third quarter of 2015. While the company is flying high right now, it’s important to remember that Amazon makes very little in terms of profit because, as many in the industry believe, they expand far too fast to make any money. Right now, life is good for them, but things could easily change as growth slows and they attempt to enter other markets. This is where altering the online playing field might end up hurting them in the long run.
When they introduced Fire TV to compete with the likes of Chromecast and Apple TV, Amazon decided to remove their competitors from their online store. Things are working out just fine for them at the moment, but this is a company that produces their own televisions, tablets, e-readers, streaming devices–they even tried a smartphone–so Amazon’s competitors are limitless. They also have the unique advantage of owning their own online marketplace, so while they made their bones as “The Everything Store,” they can still pick and choose what products they sell there. By eliminating competitors of their own products, they’re taking advantage of their unique situation, and that creates a conflict of interest that will hurt the company’s foundation.
Before Amazon goes out and eliminates the iPad or Sony televisions, they need to keep in mind that their online store is still their top product. After the success of Fire TV, Amazon could go out and eliminate other products from Amazon.com, but that will only set themselves up for more trouble in the future. The more stuff they remove from their website, the less business Amazon.com does overall, and the closer they get to a simple storefront for their own products. From there, it’s only logical that someone like Google could create their own online marketplace–let’s call it, say, Google Market. If this new service provides a more complete selection, compatible with everything Google already does, and links directly from Google search results, Amazon’s finished–and there’s evidence that the foundation for such a storefront is already in place. It’s in Amazon’s long-term interest to keep their online store as a viable and fair online space for all companies and products.
For a company that has been the first stop for online shopping for over a decade now, pulling products off their shelves is not going to do them any favors. Like many e-commerce companies, Amazon has expanded beyond their initial business model, but it can be argued that they have spread out even more so than Apple and Google have. Spending so much money in so many different sectors makes Amazon’s viable products even more valuable for them. That means they need to protect Amazon.com, first and foremost, even if they are trying to give their fledgling products a better chance to thrive. Amazon needs to remember what they’re good at, consolidate what they have, and stop discovering new things to waste money on.