– Ecommerce does not have enough profit margin to support the growth of Martech apps.
– Many existing apps will go out of business as a result.
– Apps that are subpar, charge a percentage of revenue, or have a freemium model are unlikely to survive without significant customer churn.Focus on profitability and find ways to differentiate your app in the ecommerce market to avoid being negatively impacted by the lack of margin and potential pricing changes.E-commerce doesn’t have enough margin to support continued Martech app growth. This is the truth. A lot of existing apps will also continue to go out of business as a result. If your app is subpar right now or taking a percentage of what you bring in, or charging by individual use over a certain amount, I don’t see a way that you will make it past the next year without massive churn. If you’re freemium, you’re already losing money, I can almost guarantee it. This impacts everyone. We’ve seen it with pricing changes too over the last few years. The Total Addressable Market for e-commerce, though it’s a growing sector, isn’t large enough to support a lot of these apps at scale. Subsidized by VC funds? Cool, scale as much as you can until you look at your books and realize that you can’t actually turn a profit at scale, and when you go back for round 2, don’t be sad when no one gives it to you. Not subsidized by VC funds? You’re in a better place because you don’t need to grow as fast and can sit back and wait for others to have to jack up their prices and undercut them. This is an arbitrage situation and people haven’t figured it out yet. They need to be profitable, you’re already profitable. Pay attention to this space over the next year or so because there simply isn’t enough real money to go around if you’re not in the advertising space. Things are going to change massively, they already have. #ecommerce #data #strategyhttps://www.linkedin.com/in/jivanco