2. The capital requirement of the E-retail market is high, even though the E-retail giant Amazon also need capital to invest to their company.

2. The products are commodities which are weakly differentiated.

2. With the development of technology, especially the development of Internet, buyers are well informed about the quality, prices, and costs of sellers nowadays. These factors make buyers get more bargaining power.

2. Suppliers products are not differentiated. Members account for a large fractions of suppliers Sales. As it talked above, the Suppliers not only need to pay for the Monthly fee but also need to pay for the 8%-20% sales. Therefore, it also weaken the bargaining power of Suppliers.

3. The firms in this industry has high fixed costs and high storage costs, Amazon itself has Fulfillment by Amazon and Amazon Web Service which are cost expensively.

Ratio:9/10

3. Current market has been occupied by some main companies, customers have strong brand preferences
   

3. The most key point weaken the suppliers’ bargaining power is that the Amazon as one of the first electric business platforms has the various product channels and advantages of information. It let Amazon has the dominance in the negotiation with suppliers.

1. The cost of buyers to switch to another retailer is low, if the buyers think the price of one product is too high, they can go to another retailer to buy it.

1. Industry members incur low costs in switching suppliers. For suppliers, they may provide the membership fees for Amazon and a part of sales.However, For Amazon, they need only provide the sales platform and products transport. Therefore, Amazon actually doesn’t need to spend too much cost on switching supplies.

1. There is high economies of scale in the E-retail market, it makes the E-retail giants like Amazon have a large cost advantage over the potential entrants.

Ratio:3/10

1. Buyer costs to switch brands are low, it is the nature of retail trade. Such as one buyer want to buy a pen, they tend to open multiple websites at the same time in order to compare the price.

Ratio:8/10

Suggest：Control the quality of goods, improve their own brand image, to create their own brand goods. Only a good brand image can win the trust of consumers, so a good brand image is an important factor to improve bargaining power

Attach importance to product personalization, precise positioning of high-end customer groups. Quality customer positioning standards: Customer demand content: in line with enterprise capabilities. Customer demand: with great growth potential, customers bring good growth for the enterprise, customers can bring the enterprise reputation and innovation power

Suggest：Localize the product. This includes products designed to meet the needs and preferences of local consumers. Localization of product sales and storage to reduce distribution costs and after-sales costs. Product marketing goes deep into consumers' daily life.
Conduct operational differentiation. Amazon should seek a breakthrough in operation and optimize its product advantages to the utmost. Conduct in-depth research on the flow structure of the category, and then refine the layout. Summarize and classify the operation resources and advantages of competitive products, and find the differentiated operation entrance.

Suggest：As it becomes easier to set up online stores, check out quickly and securely, and market to niche customers, the future of online shopping will also change, perhaps moving from integrated e-commerce to a more decentralized model. For example, Amazon's consolidation in the name of consumer convenience in recent years has inadvertently hurt many three-way sellers. Increasingly high advertising and marketing expenses and costs have left sellers in the lurch, while Shopify and Square are trying to attract sellers who are outside the Amazon ecosystem. In order to control the future market of online retail, Amazon should focus on intelligence as well as automation to improve their core competencies.

Suggest：Nowadays Amazon has had the dominance in the bargaining with suppliers, so maybe Amazon can decrease the percent of sales suppliers provide. Although it would increase some pressure of bargaining power of suppliers, but it may attract more suppliers with good quality join in.

Suggest：Amazon needs to strengthen its product differentiation strategy, and it needs to further innovate on both the products and services of its suppliers. This needs to be reflected in the differentiation of brand image, so that users can trust its brand more.

1. The substitutes of Amazon are readily available and attractively priced, as the substitute of Amazon, Walmart owns the powerful retail supermarket, it also focused on low price and is available for their customers, if one thing cannot be bought from the Amazon, the buyers also can buy it from the nearest Walmart.

Ratio:6/10

2. The buyers have low costs in switching to substitutes, buyers can buy almost anything they want from other retailers. Above all, the pressure of Amazon from substitutes is strong.