what is a first mover 
a first mover is a service or product that gains a competitive advantage by being the first to market with a product or service being first typically enables a company to establish strong brand recognition and customer loyalty before competitors enter the arena other advantages include additional time to perfect its product or service and setting the market price for the new item first movers in an industry are almost always followed by competitors that attempt to capitalize on the first mover s success and gain market share most often the first mover has established sufficient market share and a solid enough customer base that it maintains the majority of the market examples of first moversbusinesses with a first mover advantage include innovators amazon nasdaq amzn and ebay nasdaq ebay amazon created the first online bookstore which was immensely successful by the time other retailers established an online bookstore presence amazon had achieved significant brand recognition and parlayed its first mover advantage into marketing a range of additional unrelated products according to forbes s the world s most innovative companies 2019 ranking amazon ranks second it has annual revenues of 280 billion and through the end of 2019 had a 20 annual sales growth rate ebay built the first meaningful online auction website in 1995 and continues to be a popular shopping site worldwide it ranked 43rd on the forbes list of innovative companies the company generates 287 billion in annual revenues with a 2 8 annual sales growth rate advantages of first moversbeing the first to develop and market a product comes with many prime advantages that strengthen a company s position in the marketplace for example a first mover often gains exclusive agreements with suppliers sets industry standards and develops strong relationships with retailers other advantages includedisadvantages of first moversdespite the many advantages associated with being a first mover there are also disadvantages for example other businesses can copy and improve upon a first mover s products thereby capturing the first mover s share of the market it costs approximately 60 to 75 less to replicate a product than it costs to create a new product also often in the race to be the first to market a company may forsake key product features to expedite production if the market responds unfavorably then later entrants could capitalize on the first mover s failure to produce a product that aligns with consumer interests and the cost to create versus the cost to imitate is significantly disproportionate 