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Amazon (NASDAQ:AMZN) and the Coming Onslaught

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Demonstrating another advantage over Amazon is Target, which allows customers to return online purchases to their local Target store. Target is also much larger than Amazon by total revenue. In the physical product marketplace, both Wal-Mart and Target sell more than Amazon. Wal-Mart and Target also sell at higher gross margins than Amazon.

In the digital world, Amazon is under a total assault by Google, eBay, and Apple. Investors should anticipate other entrants not currently in the space. For example, Facebook may ascertain an opportunity in "renting" virtual mall space, not unlike Amazon's merchant program.

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Anything sold in the virtual world is no further than two mouse clicks away from another site selling the same product. Google is actively working to promote shopping comparisons and has a payment system in place.

Additionally, the book/eBook market Amazon has so successfully dominated is already showing signs of cracks. Apple is selling greater quantities of eBooks and undercuts Amazon in pricing for many of them. eBooks now outsell physical copies and anyone with a website can sell an eBook.

With such a low barrier to entry, it's just a matter of time before selling eBooks at the retail level is a loss leader to bring customers to the site. This is not unlike how gas stations operate, except when you only offer digital products, you have no pricing power.

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