Few noteworthy events / articles around Amazon from the last 2 weeks (yes — I am THAT behind).
- Amazon announced the acquisition of Fabric.com, a “leading online fabric store that offers custom measured and cut fabrics, as well as patterns, sewing tools and accessories.” Amazon did not disclose how much it paid for the site or its strategy behind it. Fabric.com which attracts about 200K unique monthly visitors (according to Compete.com), will continue to operate as a stand-alone operation although I assume that “leverage Amazon’s technology and Customer Service expertise” means that most of its infrastructure will move to AWS (to immediately cut costs). Buying a well-established niche site with loyal customers for probably a very reasonable price seems like a smart move.
- Announced in late 2007, it appears that the new payment kid on the block, Bill Me Later, is now available on Amazon as a payment option. Bill Me Later even added an Amazon Featured Store on its site. The company has grown rapidly and this new option should incrementally drive revenue in 2008 (which means more sales for you, Mr. Third-Party Amazon Seller).
- Jeff Bezos invests in Twitter, the fast-growing micro-blogging platform. There’s no revenue model - yet. Amazon does support UPC-based price look-up via SMS (which really hasn’t made a big splash) but maybe make it easier to Twitter about my Amazon purchases?
- Thanks to an Amazonite, last week I held for the first time a Kindle in my hands — I was quite impressed with the “readability” of the content (easy on the eyes). But not everyone’s convinced Amazon should be in the hardware business and for me it’s not a core competency or big revenue driver (not buying additional shares as a result).
- Investor’s Business Daily published a silly article late last week on the painful Amazon Toys R Us “breakup” as Border’s separates its ties with Amazon to go it alone. While no official numbers are available, I think Amazon - in hindsight - is probably happy about no longer needing to comply with TRU-mandated category restrictions (mention this at Amazon and watch eyes roll around …).
- In response to questions from online retailers that I get in my role at ChannelAdvisor, I checked with Amazon if there are any plans to give 3P sellers more visibility into Amazon’s fraud queue (either via Seller Central or the API). Meaning, will it be possible for Amazon to indicate if an order is being reviewed to help with customer communication. In short, the answer is “no”. I am hoping that PayPal’s increasing openess (with its new PayPal Payment Review feature) will put some “market pressure” on Amazon since I hear about this a good deal. Anyway, I tried.
| 3.2 |
Amazon launches Office Supplies store
Filed Under Amazon Announcements, Amazon in the News | 2 Comments
Amazon announced on Monday the launch of its latest mini site, Office Supplies, at www.amazon.com/officesupplies, “a single shopping destination that offers competitive prices on hundreds of thousands of products for the classroom, home office, small office, corporate office and everything in-between.”
I skipped a weekly update due to eBay Live! last week in Chicago, but there have been a few interesting tidbits around Amazon that are worth noting.
- Amazon is rumored to take its Amazon Payment System where all checkout solutions have gone before: according to Cantor Fitzgerald analyst Derek Brown, Amazon is preparing to launch a Google Checkout / PayPal Express Checkout competitor that would allow consumers to complete an online purchase with their Amazon credentials on any e-Commerce site. I assume that this would initially be limited to the US with subsequent launch in the UK, France, Germany and Japan (maybe even China). Pretty compelling offer since I don’t have to create a new account and may even be able to view purchases in my Amazon account history.
- If you live in Phoenix, head on over to Amazon’s job fair this Thursday to apply for jobs in its new Goodyear, AZ warehouse. The 600K+ sqf facility will eventually have 1,300 full-time and part-time employees and bring the number of US-based fulfillment warehouses, according to my count, to 15.
- Goldman Sachs is bullish on Amazon and forecasts that Amazon will continue to grow 20-30% annually to double its revenue in 3-4 years. Interestingly enough Goldman partially attributes this future growth to Amazon closing the eBay GMV-per-customer gap (Amazon GMV/C is about 50% of eBay’s GMV/C).
- The rate of issues at Amazon following the well-publicized recent two-hour outage has been “above average” over the last few days. That or Amazon is getting better at reporting them. Don’t think it’s something to be overly concerned about, just worth monitoring as an active Amazon seller.
| 3.2 |
Here’s what happened this past week that’s interesting and news worthy around Amazon:
- Consider selling on Amazon your safest growth strategy. Sanford C. Bernstein analyst Jeffrey Lindsay published a report this past week that has both Google and Amazon dominating the internet and e-commerce for the foreseeable future.
- There were few news sites and blogs that did not report on Amazon’s two-hour outage on Friday, costing Amazon approx. $1.9M in lost revenue. While not confirmed by Amazon, the outage corresponded with a heavily-marketed promotion for a popular video game bundle that started 20 mins earlier. And, no, Amazon didn’t “crash and burn” (int’l sites and EC2 were unaffected) and the decline in its share price was in line with the heavy sell-off on Wall Street on Friday.
- Amazon released v4.9 of its WebStore with usability, performance and reporting improvements (new Knowledge Center!). Most importantly, sellers now can see if a sale occurred on Amazon or the WebStore.
- Amazon extends its muscle-flexing in the book space to the UK by removing all titles of the UK’s largest publisher, Hachette Livre UK, from its site.
- The Great ASIN Catalog Merge of 2007 continues with no date. Occasionally sellers encounter products with multiple or incorrect product listings on Amazon which can cause listing headaches and a poor shopping experience. Amazon is committed to cleaning this up and sellers contact Amazon for assistance.
| 3.2 |
Summary of noteworthy articles and events on Amazon for this past week:
- New Amazon Seller Central Help — Amazon has significantly overhauled its seller help documentation. Not only are topics aligned with the order life cycle, but the topics themselves are more self-explanatory. Faster learning = faster selling = more revenue.
- Amazon to launch streaming media — While no details are available on this upcoming service, it’s not a surprise and a good fit.
- Amazon announced the launch of its Health & Beauty category on Amazon UK. with a catalog of over 25,000 products, leaving Digital Downloads, Groceries, Tools, Automotive and Industrial as “to do”.
- Borders.com goes from an Amazon partner (the site was run by Amazon) to a competitor with a focus on an online bookstore look + feel. Would be surprised if they would NOT need to rely on third-party booksellers to expand their inventory but doesn’t appear to be offered at this time (”sell here”).
- Amazon lowered the price of the Kindle by $50 and Jeff Bezos hints that it has gained 6% share of sales of books available on the device. Not a home run but there’s definitely life.
| 3.2 |
Quick summary of interesting Amazon-related news / events for this past week:
- Great new Amazon MP3 Widget for Amazon Associates that allows your visitors to listen to and purchase music right from your site.
- Several enhancements were released on May 14th to Amazon’s Packing Slip functionality (necessary tweaks such as removing the seller’s email address).
- Amazon Web Services (AWS) releases a Marketplaces Widget based on its Flexible Payment Service (FPS) to facilitate the transfer of money between buyers and sellers. Go build your own shopping cart in only a few steps!
- Citibank’s Mark Mahaney forecasts that Amazon’s Kindle could be quite popular in 2010, to the tune of $450 - $750 million in direct revenue. Not everyone’s convinced this is on track.
- Amazon invests in multimedia company Animoto which allows users to create videos from their photos and music (deal with Facebook). Animoto will use Amazon’s technology infrastructure.
| 2.3 |
Amazon reported earnings tonight after market close and there are a few interesting highlights:
- Sales in North America are up 31%, International grew 41%. That’s about 13% (in the US) more then the anticipated 18% YOY e-commerce growth rate for 2008. Continuing to gain share of the overall pie.
- Fulfillment By Amazon adoption grew 50%, showing strong momentum. Probably a result of both good media coverage, sellers competing with FBA listings (tough one) and resigning to “if you can’t beat them, join them” and Amazon sales efforts (one seller on a Yahoo! store sent me a note that he was contacted by Amazon on basic fulfillment opportunities).
- Media as a product category continues to shrink with only 28% growth (CE/general merchandise grew 56%). Points to growing 3P sales as a share of overall revenue.
- Amazon’s “developer network” grew 10% to 370,000 developers in the last quarter. As opposed to eBay’s developer program which is laser-focused on growing traffic and sales, this is cool to see but really doesn’t have a significant impact on merchandising revenue on Amazon.
| 2.9 |
Amazon in the news
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Here are a three interesting articles on Amazon with its Q1 earnings coming out next week (April 23rd). In particular I recommend the Fortune article which pegs Amazon’s total share of US online retailing at 6%, up from 5.1% in 2006, and gives more information on its German, UK and Japanese sites (each is about $1.5B in revenue, or 10% of total global revenue of nearly $15B) which is not something Amazon shares.
- The charmed life of Amazon’s Jeff Bezos
- Amazon Takes On IBM, Oracle, and HP — distraction?
- Peter Gabriel to take on Amazon’s recommendations
The launch of The Filter is interesting since it has already accumulated over 50M transactions on which to base its recommendations. That is one piece where I wonder if Amazon should find a way (beyond its Webstore product) to share product recommendations outside of Amazon, and ultimately drive traffic back to the site. Maybe a recommendation catalog based on UPC or even ASIN that I can query through Amazon’s web service platform?
| 2.9 |
It’s the customer, Stupid!
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Need more evidence why Amazon continues to see phenomenal growth (and needs to be a top channel for any online retailer)? Today’s New York Times has a great article on a Christmas saved by Amazon. The author ordered and had delivered to his door step a PlayStation 3, but it was stolen. He calls Amazon, explains the incident and receives a replacement just in time to be a hero for his sons. Read more
Amazon announced this morning that it has invested in payment super star Bill Me Later (formerly known as I4Commerce), in my opinion the leading and easiest-to-use credit payment method. The aim is to offer Amazon buyers in the US Bill Me Later as an option so that they can get 90+ days financing for qualifying orders.
I have used Bill Me Later before and it was very easy and fast. I assume that once the user signs into Amazon I will not have to identify myself again using my birthday speeding up the process even further (after all, Amazon knows me).
| 2.9 |