Decentralied Blockchain: Why Middlemen Need to be Eliminated in E-Commerce

ApolloX wants to be your go-to online e-commerce platform. Like Amazon, just better.

With blockchain, decentralized apps and smart contracts, the ApolloX ecosystem is the future of e-commerce.

We’re going to explain some issues small businesses and vendors face with the current e-commerce system and how we, ApolloX plan to make an easier system.

Earning Customers Trust is Difficult for a New or Small Business

Any e-commerce site already has the disadvantage of being online and not having face-to-face interaction with prospective customers. This obstacle can make a company impersonal and hard to trust. In order to build a good reputation, companies end up buying the trust. How can you buy trust? Easy, join an e-commerce platform that is a household name and has millions of loyal users.

These marketplaces provide helpful services like product lists, a large audience, payment processing, customer support and even global market access. Amazon is one of the major marketplaces that small companies join to gain customer trust. As a household name, everyone can trust that Amazon will give them the product they want at a great price, with on-time shipping. But what if the brand name and perks of working with popular platforms still don’t help? If Amazon or Ebay doesn’t give enough support, companies are forced to spend money on advertisements to gain their first thousand customers. Most of the time this route takes too long to build trust ends in lost money.

Further Reading: 6 Problems Selling with Amazon

The Middlemen Profits from Trust Advantage Point

Large marketplaces are well aware of the advantage point they have over other smaller vendors. Unfortunately, instead of using their fame and leverage to promote small businesses, large marketplaces choose to only help small brands for a cost. To be a part of a popular marketplace, companies get taken advantage of and are forced to give up some of their gross sales. Ebay takes around 8–15% of gross sales while Amazon takes around 15–25% from companies who are trying to make a profit.

Diagram: Price breakdown of household item sold on Amazon.

In addition to charging expensive fees, large marketplaces promote their own trustworthiness by charging small vendors. For example, customers have such trust in Amazon because Amazon has a policy that guarantees a customer will be reimbursed if they receive lost or damaged goods, or if a seller turns out to be a fraud. Yet in these circumstances, Amazon doesn’t lose money. Instead they reimburse customers with money they made from honest small vendors. This money comes from the high fees small companies have to pay to stay in the marketplace.

ApolloX Solution:

Eliminate middlemen to Create Better Pricing for Small Vendors and Customers

Blockchain technology is the e-commerce platform upgrade which enables peer-to peer transaction and creates trust. ApolloX can prevent a majority of online scams with the help of distributed ledger and smart contracts. Once a purchase is made, a data block (including the items description, shipping, return policy, customer information and vendor information) will be encrypted and stored on the ApolloX blockchain. The encrypted data block ensures no risk of losing the data transaction or data manipulation. The customer payment will also be held in a smart contract until the product is delivered to the customers satisfaction. As a result, if a customer receives a lost or damaged item, their payment will not go through and they won’t have to wait for a reimbursement.

In a marketplace where customers aren’t charged in the case of a loss shipment, damaged item or fraud, vendors don’t have to pay high fees to cover any of those circumstances. Customers also are more comfortable purchasing from the ApolloX marketplace or individual shops powered by the ApolloX platform.

Without the middleman, you may wonder how necessary functions such as shipping and handling will be controlled from a small business? On a decentralized, blockchain marketplace like ApolloX, the seller can choose to offer various shipping choices with optional shipping and processing time guarantees. Once the order is placed and executed based on the delivery status, a smart contract for the guaranteed shipping time will be created. The customer knows the product they bought will be delivered on time or they will receive a settlement for the disappointment. This is just one of the necessary functions ApolloX plans on solving.

The main goal of large centralized marketplaces is to achieve as much profits as they can attain, rather than providing a truly efficient and fair trading environment. Only by using blockchain technology with true decentralization of the e-commerce marketplace can we fundamentally solve problems small businesses face, such as gaining consumer trust.

ApolloX will upgrade the whole ecosystem to blockchain and cut-off unnecessary intermediaries and create more peer-to-peer transactions. Not only helping buyers have trust and transparency, but helping sellers gain more sales. We anticipate a 40% price reduction for consumers.

Check back next week, for more information on how we plan to bring better data protection and our marketplace created and owned by the community.

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