Sandeep Krishnamurthy, a professor at the University of Washington-Bothell who specializes in e-commerce and has studied Amazon's evolution, offers advice to entrepreneurs considering a partnership with a behemoth in the same sector:
What am I giving up?
"In some cases, you can have a larger company that wants to collaborate with you, but it really wants to take away your intellectual property, so the question is: How much do you give up?"
What will it mean for my brand?
Joining with a larger entity might mean subsuming your identity to theirs. "You're losing the aura of 'this name stands for greater service.' In the case of Amazon, you're really becoming just a franchisee of theirs, in a way.
Would I have a better chance going it alone?
At the same time, you may not want to go through the struggle of starting from scratch, with all the effort that entails. "Starting a brand online is brutal – you start with no name recognition." And in the case of books, "you're talking about a commodity product, so there's nothing you're selling that Amazon isn't selling."
David Milstead