Amazon Introduces WebStore

http://webstore.amazon.com/

by craigbellot • 18 years ago

30 21 18 years ago

webstore.amazon.com

aristus• 18 years ago

7% commission?

attack2• 18 years ago

They take 7% of your profit as a commission or you keep 7%? I'm guessing the former.

kirubakaran2• 18 years ago

"$59.99 per month + 7% commission"

So they keep 7%, not 93%

rms3• 18 years ago

There are a lot of competitors in this area; I don't see what makes Amazon better than Yahoo stores and the like.

I do wish that there was an online store provider that didn't take a fixed percentage of revenue.

hugh• 18 years ago

The Amazon version appears to be a lot prettier than the Yahoo version.

That's gotta be worth something, though probably not an extra 5% of gross revenues.

rms3• 18 years ago

https://app.shopify.com/services/signup is very Web 2.0 pretty and reasonably priced

Prrometheus• 18 years ago

My father and I tried setting up a Yahoo store recently, and it was web 0.5 ugly.

wcrosby• 18 years ago

Take a look at Go Daddy's Quick Shopping Cart (https://www.godaddy.com/gdshop/ecommerce/cart.asp?ci=9032). You have to pay a % to the payment processor, but the product is a fixed fee.

rms3• 18 years ago

Thanks, that's actually really reasonable. Might be better than hacking down zencart to do only what I want.

pg• 18 years ago

Surprisingly expensive. 7% of the merchant's revenues is very high.

kirubakaran2• 18 years ago

They are probably leaving room for future easy buzz:

"Amazon WebStore drops fee by 14%!!!" (from 7% to 6%)

They can do this 4 or 5 times.

tstegart2• 18 years ago

Its actually not, if you analyze all the costs. You get a very SEO friendly store, access to Amazon's recommendation engine, review system, and a few more pretty good things. You can sell Amazon products, if you need to fill out some areas of your store, and you don't have to worry about shipping those. You also don't have any hosting fees or bandwidth fees, no matter how many visitors you get or how big you grow. The credit card processing fees are included, and there's no need to get a merchant account either, which for some people with bad credit is hard. And besides that, it saves a person who might not have a lot of programming skills a heck of a lot of time, which I think would also be worth a lot to some people.

madmotive• 18 years ago

It's hard enough convincing people that the 1% to 2% that Shopify charge is worth it.

However, it is a slight sweetener that this seems to include all credit card processing fees.

johnrob2• 18 years ago

You can simply multiply your estimated revenue * .07, and see exactly how much you pay in fees. You'd have to be earning quite a lot before it becomes worth building the website in house.

Here is something else to consider: If you make a million/year, you pay 70K/year for the whole shopping website. Now, if I were earning that much, I'd rather spend my time becoming a 2 million/year business than saving 70k.

Perhaps there are equivalent products that take less money, and if the two are really apples to apples, one might pick the lower commission rate. However, if amazon were the only one out there, I think the fees could be justified for a large number of customers.

joshwa• 18 years ago

But what if your markup wasn't all that high to begin with? That's 7 points off your gross margin, which is nothing to sneeze at.

Assuming a 30% gross margin-- to get that $2m, you'd have to spend $1.54m in COGS, for a gross profit of $462k. Add the 70k in amazon fees, and that's starting to seriously affect your balance sheet.

johnrob2• 18 years ago

Very good point. The pricing model probably assumes a high (at least 2x) gross margin. I've heard that specialty goods (i.e. made by small shops) tend to have high margins.

SwellJoe• 18 years ago

7% is freaking huge. I cringe when I see our credit card processing fees, and they're only about 3%.

I'm sure they'll sell a lot of this service, because they're Amazon, but jebus, that's some crazy high fees.

edw519• 18 years ago

This looks like an excellent way to acquire customers if you already have your own site. 7% of the initial purchase is actually pretty cheap for a recent single buyer. If you purchase a list, rent a list, or use SEO, then junk mail or email blast (for shame), by the time you figure out your conversion rate, you'd be way ahead with WebStore.

Unless I'm reading the docs wrong, your items appear in the search results for amazon.com. This is very powerful because these are active buyers at the world's largest on-line retailer.

The trick is, once you convert a buyer (who is now your buyer), you want to direct them to your site from now on so you only have to pay the 7% once. You also want to put your loss leaders on WebStore and keep your high margin items on your own site. After all, 7% of a lower price is a lower commission.

tstegart2• 18 years ago

Wait, why is this news? This has been out for a very long time. Has anything changed about it?

schammy• 18 years ago

This story is a perfect example of why this site should have downvotes.

A) It's old B) Therefore it's not news C) Even if it was new, it's so amazingly un-exciting that it's not news anyways.

Amazon Introduces WebStore

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