How Amazon develops 'products'/offerings...
On the recent Piper call with Gene Munster, I started to think about a generalized framework for helping to describe and articulate how Amazon seems to develop new offerings.
- Beta - Offering is not announced, available to a very closed, NDA list of partners/customers.
- 1.0 product - Offering is available either in a closed program or somewhat hidden/not promoted on the site. Generally the offering is under the radar.
- 2.0 product - The offering is available in an open fashion, easily found on the site, but still not heavily promoted.
- 3.0 product - At this point the offering is tested, works and is ready to 'ramp'. Ramp in the Amazon world can mean a variety of things such as:
- Increased site 'customer' exposure
- Increased site 'buyer traffic' exposure
- Increased category adoption (e.g. started in Cat1 and is now in Cat1-X)
- Actual promotional exposure
- 4.0 product/ platform - This is the most recent, and in my mind most interesting, stage where Amazon is starting to take on-site offerings, technologies, etc. and then opening them up as a platform.
- Amazon S3 - Simple Storage Service - S3 essentially takes Amazon's internal digital asset storage mechanism and opens it up to any third party. Thus the same Amazon technology that hosts their product images and what-not is open to the World.
- Amazon EC2 - Elastic Computing - Amazon has some amazing cloud/datacenter technology and they have opened this up to the World. We are starting to use this at ChannelAdvisor with some great results.
- What if Amazon platform-ized Prime? Any retailer could offer prime to their buyers and there could be scheme for rewarding retailers/associates that drive Prime signups. Prime could go from a great Amazon idea, to a near-internet-wide free shipping subscription program.
- Amazon payments - What if Amazon decouples payments in a more meaningful way? Over night they could have the number 2 payment system behind PayPal and take a serious run at those guys.
- What about the review and recommendation systems? Retailers would LOVE to be able to integrate those systems, and maybe even the content, onto their sites.
|Vitamin C||Beta Product||Not announced/available - rumored at this point|
|Payments/Checkout||1.0 Product||Very under the radar|
|Private Label products||1.0 Product||Definitely under the radar|
|Trade-In (post coming soon)||1.5 Product||Exapnding categories, not quite a 2.0 offering yet, but heading there|
|FBA - Fulfillment by Amazon||2.0 Product||Ramping nicely|
|ProductAds||2.0 Product||Starting to really ramp thanks to increased on-Amazon exposure|
|Prime||2.5 Product||Starting to promote - (blog post coming)|
|Pro merchants / Merchants@||3.0 product||Mature - on Amazon only - offering|