EcommerceBytes-NewsFlash, Number 3131 - August 15, 2013     1 of 3

Amazon Payments Could Be Coming to a Marketplace Near You

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Merchants are increasingly becoming aware of Amazon Payments, according to Tom Taylor, Amazon.com Vice President who is responsible for Amazon Payments, Fulfillment by Amazon and Amazon Webstore. There's a lot of interest in the service, and merchants are telling Amazon that their customers are asking to pay with their Amazon accounts.

Taylor admitted it was a bit of a chicken and egg proposition - he is tasked with getting the word out about Amazon Payments.

While any one of Amazon's 215 million customers know how about Amazon Payments on Amazon.com, they might not know about the availability of the payment service on other retail websites. To create awareness, Amazon is approaching larger sellers. They're asking customers where they are spending their money in addition to Amazon - "there are good reasons for shopping elsewhere," Taylor acknowledged - then Amazon talks to those merchants.

Could Amazon Payments Become Standard on Online Marketplaces?
Online retailer Build.com appeared with an Amazon executive at this week's Etail East conference to talk about its implementation of Amazon Payments, where Amazon showed off new features that make it easier for merchants to implement Payments on their sites and make it easier for Amazon customers to checkout on third-party merchant mobile sites.

But what about online marketplaces? That's definitely on the table, according to Taylor. Amazon is open to working with any online retailer or marketplace as long it benefits Amazon customers.

"We're not being restrictive, we're going after many people," he said, and he spoke of the value proposition to marketplaces by not requiring their shoppers to enter their credit cards into yet another site, particularly new marketplaces where shoppers don't know if they will shop on that site again.

Is there an issue where Amazon wouldn't want a marketplace's listings to show up on Amazon Product Ads?

"That's not how we think about it. We think about, where do our customers shop, and we recognize that some other marketplaces have different selection than we do that have different discover and shopping. There are a lot of great sites out there that we all use. What we want to do is take away the customer pain when it comes to some of the final pieces, such as the payment and fulfillment piece where we think we can offer an advantage."

Amazon Payments Differentiators
So what's Amazon got that merchants want and competitors don't have? "You know Amazon, we're always going to talk about our customers and our customer focus," Taylor said, referencing the company's 215 million customers worldwide that have a trusted relationship with Amazon and have a big wallet and are comfortable spending online.

"We also try to be very convenient and simple" - no hidden or add-on fees, no monthly or setup fees or cancellation fees or fraud protection fees - "we try to be very transparent and straightforward."

Taylor had mentioned the synergies for merchants using multiple Amazon services in an interview with EcommerceBytes in February, and he touched on it again on Wednesday. Referring to the benefits of using Amazon Product Ads to advertise products on Amazon and offering Amazon Payments when the Amazon shopper clicks through to the merchants' website to order the item, he talked about traffic generation, increased conversions and customer engagement. On top of that, using Amazon Fulfillment to get the order to the customer in two days - "these are all things that help conversion," he said.

"When you combine payments with traffic generation - now it's an interesting conversation. It's not just about moving money around."

In addition, Amazon believes 20% of online orders will be made with "frictionless" online payment methods by 2017 - that is, stored information in lieu of setting up new accounts, which is one of Amazon Payments biggest selling points for customers who are ordering off of Amazon.com's own site.

The "Amazon Competes with Retailers" Argument
Retailers may not want to partner with someone who competes with them. Has that been a challenge for Amazon in trying to increase adoption?

Taylor laughingly said that when he hears that, he thinks Amazon must be doing a bad job, citing numbers that show 40% of units sold on Amazon are made by third-party sellers, and in 2012, third-party selling on Amazon grew 40% year-over-year during the holiday shopping season.

Amazon FBA
Taylor said Amazon has been making a lot of little changes over the last few months to Fulfillment by Amazon based on seller feedback to make things better. (See yesterday's Newsflash article, Amazon Rolls Out Enhancements to FBA Fulfillment Program, for information about some of the most recent enhancements.)

Are sellers having to deal with more split shipments as Amazon builds out its fulfillment centers? "If you're a seller selling a lot, it's to our benefit and yours if you send it to a lot of warehouses. The sellers benefit because they're getting the benefits of faster shipping." But Amazon has created options for sellers who don't want to send inventory in split shipments, though there are fees for using those options.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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