> The startup wants to help Amazon competitors think about pricing in as sophisticated a way as Amazon does.
The catch is that if several big retailers apply the Amazon strategy, a self-reinforcing feedback loop will drive the prices for popular products to zero and the prices for less popular products to +inf. This will make popular products even more popular, which further strengthens the effect. The question that this startup has to answer is thus how they are going to keep the market from exploding and how they can benefit several clients at the same time.
The catch is that if several big retailers apply the Amazon strategy, a self-reinforcing feedback loop will drive the prices for popular products to zero and the prices for less popular products to +inf. This will make popular products even more popular, which further strengthens the effect. The question that this startup has to answer is thus how they are going to keep the market from exploding and how they can benefit several clients at the same time.