Amazon Fee Hikes Could Spark More Interest In Google From Sellers

    March 18, 2013
    Chris Crum
    Comments are off for this post.

Third-party merchants selling goods on Amazon aren’t thrilled with recent fee hikes from the company that have been happening over the course of the past year or so. Nothing new there, but Reuters has an interesting report out today about how a growing number of sellers are exploring alternatives, including eBay, which has its own fair share of critics.

The report is gaining some attention in Amazon’s own seller forums. The reaction is a mix of criticism of the piece itself, some who think disgruntled sellers just aren’t doing their job well enough, and some agreement with various points made in the article.

Regardless, Amazon has raised fees, and cites rising costs (like those for fuel, for example) as the catalyst. While the report names other competitors like Walmart and eBay, author Alistair Barr suggests “Google may be the bigger threat” to Amazon, as it “already owns most of the necessary pieces, such as product search, listings and a payment service.”

“It began testing a same-day delivery service with retailers in recent weeks, sparking speculation it’s building a marketplace,” he notes. “A spokeswoman said Google is always working to improve the user experience, including shopping.”

Google, as you may know, recently switched to a pay-to-list model for Google Shopping, which is based on its product listing ads. So far, this seems to have been going quite well for Google, and for advertisers, as report after repot has come out talking up PLA performance. Soon, Bing, another Google rival, will also offer product listing ads.

Google and Amazon are direct competitors in a variety of areas, and a possible new service called Google Shopping Express could raise the stakes further. This is what Barr was referring to.

Google is also testing the B2B retail waters, don’t forget.

  • David

    It’s no surprise that sellers are starting to get upset with how Amazon is treating them. I could understand the price increases if there weren’t any competitors in the market, but with big players such as eBay and Sears already offering marketplace and fulfillment capabilities, I don’t think it makes sense. Sellers can easily switch to something like Sears Commerce Services which offers sellers the ability to sell their products to customers who visit Sears.com and they even allow sellers to ship them their inventory and when the products sell, either on Sears.com or a third party site, Sears will pick, pack, and ship the products to their customers. Amazon should just keep in mind that they aren’t the only player in the market.

  • http://www.cpcstrategy.com/blog CPC_Andrew

    Great article Chris. Here’s the thing: Sellers are going to be stretched by whatever big conglomerate ecommerce firm they choose to be partners with.

    On one end you have Amazon’s fees and incredibly strict to the point of losing 3p profits customer service standards, and on the other you have Google who provides great traffic but you have to be able to watch the channel with a close eye to make sure nothing happens with your data feed or your traffic and sales in general.

    As you know we reported on the success of Google Shopping vs Amazon Product Ads last month (http://www.cpcstrategy.com/blog/2013/02/google-shopping-vs-amazon-product-ads/), I think the results hold well for Google but Google may be moving in a market that has less profit for the company over the long term course of their growth, which could be a death trap for the company.

    Why continue to move into a market that Amazon can barely make a profit from? It seems like Google sees Amazon as a threat to search as product searching is becoming a bigger and bigger market. However their ability to move into a market that is so different to what they’re used to could be trouble.