Amazon.com is joining the Web store-hosting business, announcing 'zStores', a new program that will allow small businesses and consumers to sell products through its Web site.
The program takes Amazon
a step closer to a becoming a general purpose Web site, offering tools and services, not just products, to consumers.
The zStores program will put Amazon in competition with portal sites including Yahoo Inc.
and America Online Inc., in addition to its current head-to-head battles with eBay
and Barnesandnoble.com.
Amazon will charge a US$9.99 monthly fee for Web space, and a transaction-based fee for the items sold through the site. Users will be able to take advantage of Amazon features like one-click shopping and transaction processing.
New customers, new competitors
While Amazon will handle the transactions, the shops will be responsible for shipping products and handling customer service.
The low fees and the fact that Amazon will process the transactions would seem to indicate that the program is focused on individuals and home or other small businesses. Yahoo Stores, for instance, charges US$100 per month for a 50-item store, although it does not charge a transaction fee.
"The intent is to be able to position Amazon to consumers as the place you go on the Web to buy anything -- not just music videos and books," said Ken Cassar, analyst at Jupiter Communications in New York.
Cassar said Amazon has also revived the "shopping bot" technology it acquired with the purchase of Junglee, which helps consumers look for products elsewhere on the Web. When a consumer types in a search request for the Dave Matthews band, for instance, they would see CDs from Amazon's store, and fan merchandise for sale in Amazon auctions or in a zStore. They could also be referred off of the Amazon site to a page selling concert tickets.
Amazon stock soars
And the fact that Amazon will be responsible for all transactions puts them at risk of fraud from the zStore owners as well. Amazon has agreed to reimburse consumers who have problems with zStore merchants, under certain conditions.
"Amazon.com's heart and soul is all about making shopping better for customers," CEO Jeff Bezos said in a release. "This is a win for customers who get bigger selection, a win for sellers who can now reach more than 12 million customers hassle-free, and a win for Amazon.com because we're now an even better shopping destination. This is all about finding what you want and saving time and money."
'The intent is to be able to position Amazon to consumers as the place you go on the Web to buy anything -- not just music videos and books.'
'
-- Ken Cassar, analyst at Jupiter Communications in New York.
While the Web-shopping technology will certainly be helpful to consumers, it could also put Amazon at risk of driving customers away from the site, Cassar said.
