Note : This post describes how I would kill Amazon.com but not why . For information about the why , start here .
You create a website where vendors can add their products to a shared catalog. Customers shop by searching this catalog. Purchases are handled by the website and orders are fulfilled by the vendors. Vendors are paid by the website based on the purchases the vendors fulfill minus a percentage to support the operation of the website.
The website categorizes the contents of the catalog to allow products to be sourced by multiple vendors. The vendor with the closest physical proximity to the customer is selected to fulfill the purchase. This allows the customer to receive the product as quickly as possible while supporting the customer’s local businesses as well.
Over time, the website can identify needs which can be used to attract additional vendors to the system. These include a) products that are searched for but are not available from current vendors and b) products that are regularly purchased but not available from vendors local to customers. This data is then used to “recruit” existing vendors to join the system to meet these needs or to encourage entrepreneurs to start new businesses to satisfy these demands.
This process is automatic, and the data is generated as a side-effect of regular customer interaction with the website. The result is a means of expanding the value of the system to both vendors and customers without one exploring the other, and without rewarding unhealthy growth or competition.
The beauty of this design is that it doesn’t have to start big to be successful. It could start with a single site focused on vendors in a single small town. Local customers can be recruited to use the site as a way to discover and buy from local businesses. As the system uses these initial interactions to identify unmet needs, additional vendors can be recruited to meet these needs as described above. This results in a self-perpetuating cycle of attracting new vendors and customers into the system. As the customer base expands geographically, the need for vendors local to these new customers will be identified by the system and recruited to meet the needs of local customers ad infinitum.
The technical challenges of implementing such a system are trivial (at least to me) compared to the social challenges. What this approach requires is one community committed to cultivating an initial local marketplace and especially vendors who are excited enough about participating that they are willing to endure the inevitable growing pains of getting things off the ground. However, if such a “critical mass” of participants can be found, the rewards could be significant. I believe this is one way to unseat Amazon as the primary way people shop online, and revive the once thriving relationship between local customers and businesses without throwing away the continence, safety and efficiency we have all come to enjoy from online retail.