RedCloud’s CEO introduces Open Commerce, an AI-powered platform aiming to revolutionise online retail by empowering small and medium-sized businesses (SMBs) and challenging Amazon’s dominance. Allegations of monopolistic practices and mistreatment of third-party sellers prompt scrutiny of current eCommerce models.
Online Retail Practices Scrutinised as New Platform for SMBs Launched
LONDON, June 10, 2024 — In the current legal climate, Amazon, the world’s largest online retailer, is facing intense scrutiny following a lawsuit filed by the Federal Trade Commission (FTC) and 17 state attorneys general. The lawsuit alleges that Amazon has engaged in monopolistic practices that stifle competition and harm consumers.
The FTC’s lawsuit, filed in September 2023, accuses Amazon of engaging in “exclusionary conduct” that suppresses potential competitors through punitive tactics, thereby maintaining its dominance in the eCommerce market illegally. The company is also alleged to have implemented strategies such as “Project Nessie,” an algorithm purportedly designed to control and inflate prices, contributing to over $1 billion in excess profits for the company.
These allegations are compounded by concerns about Amazon’s treatment of third-party sellers, who make up 60% of the platform’s total sales. Many of these sellers report that Amazon takes up to 50% of their revenue through fees and commissions, a survey by Marketplace Pulse indicates. There are additional accusations of promoting counterfeit goods and manipulating search algorithms to disadvantage third-party products in favour of Amazon’s own brands.
In the midst of this controversy, Justin Floyd, CEO and Founder of RedCloud, has introduced an AI-powered platform named Open Commerce. Floyd’s platform is presented as an alternative to traditional eCommerce models, aiming to democratise the online retail space and provide small and medium-sized businesses (SMBs) with enhanced tools for inventory management, counterfeit prevention, and overall operational efficiency.
“Traditional eCommerce models have become increasingly predatory, often controlled by big-tech providers who own all the data and dominate the supply chain,” stated Floyd. “It’s time for a retail revolution through Open Commerce, which aims to provide a transparent and equitable trading system.”
RedCloud’s Open Commerce platform leverages artificial intelligence to offer real-time visibility of inventory, which the company claims can help resolve inefficiencies and prevent counterfeit goods from entering the supply chain. The platform aims to reduce reliance on major eCommerce platforms, where small businesses often struggle under the weight of high fees and competitive disadvantages.
The platform’s debut comes after numerous allegations against Amazon concerning the proliferation of counterfeit items and fake reviews on its site. Reports suggest that up to 60% of products on Amazon could be counterfeit, and studies have found that a significant percentage of reviews may be inauthentic.
Despite these challenges, third-party sellers have been integral to Amazon’s success. However, Floyd argues that their potential remains underutilised within the current framework. “Third-party sellers are two million strong. Imagine amassing that strength to turn the tables,” Floyd said.
RedCloud, founded in 2012, aims to provide a cloud-based platform that offers small businesses the tools to compete more effectively with larger corporations. The company’s platform provides real-time financial visibility and aims to create a fairer, more inclusive digital commerce environment.
Floyd concludes, “If we can get the purchasing power right, then the selling takes care of itself. Open Commerce provides SMBs with more autonomy and the ability to engage with trusted trading partners who offer authentic, high-quality products.”
As eCommerce continues to evolve, platforms like Open Commerce might play a crucial role in shaping a more balanced marketplace, ensuring that small and medium-sized businesses can thrive alongside their larger counterparts. Whether this new approach can effectively challenge the established giants of online retail remains to be seen.
