There Can Be Only One

Stuck in the Middle With You

Yes, we've run this headline before (August 17, Dario vs. Gavin Baker). There can be only one, except for headlines.

Yesterday we asked whether you'd want an agent doing your shopping. Today, the other side of the counter: if you run a store, do you let the agents in?

Amazon (NASDAQ: AMZN) answered first. Twelve days after Meta's (NASDAQ: META) Muse launched, Amazon walled it off. The next day Shopify (NASDAQ: SHOP) did the opposite and wired Shop Pay's agentic checkout straight into Muse. Two platforms, opposite calls. Both are right.

Amazon owns the customer and the logistics. Let an agent become the front end and Amazon keeps the warehouse but loses the storefront. Still a great business. Just a worse one. And the storefront is where the $68 billion ad business lives, which is really a toll sellers pay to get found. An agent reads the catalog, not the sponsored listings. Of course Bezos slammed the door.

Now everyone else, Walmart (NASDAQ: WMT) most of all. Every retailer on earth lost to Amazon the first time. Agents might be the rematch. Let the agent surf your catalog, keep your checkout, keep the customer's name and email, and remarket to them next week. Toys "R" Us and Borders handed their websites to Amazon around 2000, got the traffic, lost the customer, and neither is here to talk about it. Open the door. Not the vault.

Here's what the agent evangelists skip. I know I could save money spreading my shopping around. I don't. I go back to Amazon every time because the truck rolls up by 6 pm and I trust it. An agent can find me forty cents off paper towels. It can't make twenty packages from twenty senders less of a pain in the ass.

That's Michael Porter's "stuck in the middle" from 1980 (win on cost or win on being different) with the grace period deleted. Selling Bounty on your own site? The agent prices you out in half a second, or the Prime truck beats you to the porch. Two places left to stand: own the doorstep, or be a category of one.

A category of one is safe on Amazon until it gets big enough for Amazon Basics to notice. Below that line lives the Shopify layer, plus eBay (NASDAQ: EBAY) and Etsy (NASDAQ: ETSY). I collect tiki mugs, and I buy them on both. Maisie Matilda paints scenes on the fore-edges of Lord of the Rings editions and sells them on Etsy. No agent can price-shop her down. There's nothing to compare her to.

Now picture an agent whose only job is hunting 1950s Dodge hula lamps. Collecting is brutal work: forty listings a night for three years. The agent sits the stakeout. You still decide if it's real and if it belongs. Automate the vigil, keep the verdict. The catch for eBay and Etsy is that once agents search everywhere at once, a marketplace is just one feed among many. They win as the trust layer (authentication, buyer protection) or they get aggregated.

The long tail just got a salesperson. The middle just got a comparison engine.

Be the truck or be the only one. Everything in between is a search result.

At COAI today: the full Signal/Noise (the Toys "R" Us tape, the Amazon Basics threshold, and why Shopify just became the most important retailer that doesn't sell anything) is live at getcoai.com.

Outsider Labs Advisory →

$68 billion. That's Amazon's ad business last year, and much of it is a toll: the price sellers pay to get found in Amazon's search. An agent doesn't see sponsored listings. It reads the catalog, compares, and buys. That's why Muse got blocked in twelve days, not twelve months. For every retailer who isn't Amazon, the same number reads backwards. The toll just became optional. There can be only one Amazon. Everyone else gets a rematch.

1. Write your agent terms before an agent writes them for you. Shopify let Muse in through Shop Pay, which keeps the merchant as the seller of record. That's the template. Today, put three non-negotiables on one page: your checkout, your customer record, your right to remarket. Any agent that won't pass all three through gets the Amazon treatment.

2. Make your catalog readable by a machine, not just a shopper. Agents don't see your hero banner or your sponsored slot. They read specs, stock, price and return policy. Pull five of your best-selling product pages today and ask whether a bot could answer "is this the right one, is it in stock, when does it arrive" without guessing. If not, that's your new SEO project.

3. Run the stuck-in-the-middle test on your own line. List your top ten products. For each, ask: could an agent find the identical thing cheaper in half a second? Every yes needs a reason to exist (faster delivery, a bundle, a service, a story) or it's a search result waiting to lose. Keep the ones with nothing to compare against. Those are your category of one.

Wednesday, September 23

— Harry and Anthony

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