The ecommerce business model

You’ve read my earlier blogs about the ecommerce giant whose business model was found lacking by a French court a couple of months ago. Specifically, the company was found liable for damages for allowing knock-offs of luxury goods to be marketed on its site. In this country, Tiffany’s sued the same company for the same reason and likewise seeking damages, but a Federal court found that it is Tiffany’s responsibility to protect its brand, not the ecommerce giant’s- the ecommerce giant only provides a sales platform for others. When the offering of knock-offs is brought to its attention, they say they ‘aggressively’ endeavor to get them removed from the site. That’s large of them….

The giant’s business model is pretty simple, assuming both buyer and seller are honest, with the ecommerce giant functioning as an honest broker, providing, for a fee, an online sales platform to bring buyer and seller together. In a perfect world. Unfortunately, as anyone who has patronized this ecommerce site can tell you, it is fraught with abuse. Of course, the conscious sale of fraudulent merchandise is the most reprehensible, but I’ll give most sellers the benefit of the doubt and just say that a fair percentage are just plain ignorant about their material. One swallow does not a summer make, but, exemplar gratis, let me cite something that occurred just as I was about to pen this blog entry.

I received in my morning’s e-mail a wordy message from a lady who offered what she described as a ‘unique, one of a kind’ (redundant, I know, but A-level language skills are not required of online sellers) mahogany and metal lined box. She had made some astonishing claims about the materials used, the rarity of this type of box, and its provenance. The fact is, this poor benighted soul was offering something very, very ordinary indeed, and in terms of provenance- well, I guess you’d just have to take her word for it. A couple of months ago, I wrote a fairly long entry on the subject of provenance, and, without reprising that entire blog, claiming provenance isn’t enough. When we, or any other accredited antiques dealer, indicate provenance, it is backed up with written documentation- original invoice, probate inventory, or the like- that links the piece with its original owner, or photographs that show the piece in situ in its original location. Certainly, if you were to purchase a piece at a vetted antiques show, the dealer who is claiming provenance would be obliged by the vetting committee to produce such documentary evidence before the piece could be offered in the dealer’s booth. ‘Take my word for it’ cuts very little ice. Oh, and I know you want to ask what price the lady wanted for her gem of a box- let me say it was a multiple of about 10 times what it was worth, but less than what most of us would hassle over once we’d found we’d overpaid.

Of course, this begs the question- how can the ecommerce giant possibly police something like this? The short answer is, they can’t, and apparently they are, in this country at least, under no legal obligation to do so, either, even if the abuse of their model is egregious and widespread- witness Tiffany’s recent experience. Although ecommerce is the most modern of modern commercial phenomena, ironically it is one of the oldest of all business axioms that applies, in spades, to the ecommerce giant’s model- caveat emptor.

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