Platform lock-in can occur in any industry that is dependent on other companies to go-to-market. As platforms achieve more and more market power, amassing control over eyeballs (in the case of advertising) and customers (in the case of commerce), advertisers and sellers are forced to give up more economic rent (in raw dollars as channel discounts and advertising fees, or as informational control in the form of loss of data.)
Platform lock-in creates significant go-to-market challenges for manufacturers. Over-dependency on monopsonistic advertising and distribution platforms results in diminished control over pricing, branding, and customer relationships, as these platforms leverage their monopsony power to dictate terms. The consequences are far-reaching: manufacturers face intense competition within a crowded marketplace, struggle to differentiate their products, and often incur high costs for visibility through advertising or premium placements.
Strategies to Combat Platform Lock-in
Fighting expansive and accelerating market power is not a novel problem. Previous generations have had their own behemoths to deal with, both in advertising and distribution. The best practices that marketers adopted in the ages of company stores, television media dominance, and Wal-Mart can all be applied today, with slight digital tweaks.
Diversify Distribution Channels
Treat large marketplaces like traditional retail channels, evaluating them based on economics (e.g., margin giveaways), control over branding, and customer preferences. Manufacturers can explore smaller, niche retail retailers or platforms, or even direct-to-consumer (D2C) models that offer greater control over pricing and presentation. For example, partnering with specialized retailers or leveraging platforms like Shopify can enhance brand visibility while maintaining higher margins. Scarcity can also drive perceived value, so focusing on exclusive or curated distribution channels can differentiate a brand from the oversaturated marketplace.
Prioritize First-Party Advertising and Retention
Shift focus to first-party advertising strategies that strengthen direct customer relationships. Invest in retention programs, upsell opportunities, and word-of-mouth campaigns to build a loyal customer base. Email marketing, loyalty programs, and personalized content on owned channels (e.g., a brand’s website or app) can reduce reliance on third-party platforms. By owning the customer journey, manufacturers can capture valuable data and tailor experiences without intermediaries extracting rent.
Approach Third-Party Advertising with Skepticism
When using third-party advertising on platforms like Amazon or Google, manufacturers should critically evaluate algorithmic recommendations and performance metrics. Relying solely on platform-provided analytics can obscure true performance and lead to over-optimization for platform goals rather than business objectives. Instead, use independent analytics tools to measure campaign effectiveness, track customer acquisition costs, and assess return on ad spend (ROAS). This ensures advertising efforts align with broader strategic priorities.
Invest in Owned Logistics and Infrastructure
Where feasible, manufacturers should explore building or partnering for their own logistics capabilities to reduce dependency on platform-controlled shipping. While replicating Amazon’s logistics network is impossible, collaborating with regional carriers or third-party logistics providers (3PLs) can offer competitive delivery times and cost structures. This approach allows manufacturers to maintain flexibility and avoid being locked into a single platform’s ecosystem.
Educate Consumers and Build Brand Trust
Finally, shifting Combat the noise of low-quality products by investing in consumer education and transparent branding. Highlight product quality, certifications, or unique value propositions through content marketing, social media, and influencer partnerships. By building trust directly with consumers, manufacturers can reduce the impact of platform-driven competition and create demand outside of dominant marketplaces.
