>>For a long time, Amazon did have a leg up on the other online retailers. But most everybody else has caught up with regard to the logistics of online retail.
I have my doubts about their third party retailing business. I’d bet they lose money on 80% of their third party retailers, since the overhead of setting up the relationship and stocking a lot of low volume merchandise likely takes a lot of both call center time and warehouse space.
Odds are that the new management will find a way to terminate third parties who are either hard to deal with or have low volume products.
A lot of Amazon's offerings are drop-ship; actually sent to the customer from the 3rd party retailer, not Amazon.
The problem is more likely that Amazon has already copied so many viable product ideas for their own brands that there are few left out there to steal ideas from. Since Amazon had the data on the buyers, they would know if it was worth it.
The drop-ship program might have contributed to Amazon's problems. If a firm can drop-ship, why not deal directly with the customers, once they've drop-shipped long enough to establish the relationships.