Will Amazon's Exclusives Store Help Alleviate the "Commerce Pirates" Problem?
In its most recent earnings report, Amazon.com for the first time shared the performance of its Exclusives store, a site where brands can test new products and buyers hoping for exclusive deals can find their likes. Amazon said that since launch early last year, the site has generated $50 million sales from about 120 brands that offer about 10,000 products in total.
Amazon is apparently encouraged by this experiment, and plans to expand this store format.
"We do expect the broadening of the product categories and geographical expansion," according to Peter Sauerborn, director of business development at Amazon who is in charge of this effort.
It would be good news for retailers and small merchants that have truly unique merchandizes to sell. As the e-commerce market stands right now, the marketplace model opens up a great revenue opportunity for small and medium-sized retailers, but because a web store is so easy to set up, the marketplace model also invites what I call "commerce-pirates," stores that carry no inventory but list products from other sites with their own markup. Sometimes, they don't even bother to do shipping, just type in their customer's name & address and let the original store to ship the products to their customers and they pocket the margin. The worst part is that those "pirates" even post the exact product pictures from other stores, and not even bother to change SKU # or merchandise description. Of course, when returns happen and customer disputes occur, they usually offload the task to the original store to handle as well. For small- and medium-sized merchants, whether to address this issue is a true dilemma. While these stores may expand customer reach for merchants, they cause headaches such as confusing customers, adding cost to handle sales and customer support through these stores, preventing actual stores from building direct relationships with customers. Taking legal actions based on copyright law (grabbing product information and image without authorization and proper compensation) is another option, but for small- and medium-sized merchants, this option isn't worthwhile from time and money perspectives.
Maybe this type of conduct is perfectly legal, or maybe calling them "commerce pirates" is too harsh. but I muse about the possibility that an e-commerce platform like Amazon's Marketplace can eliminate these "parasite stores." (Whoops, that may be an even harsher phrase to describe them). The Exclusives store may be the first step that Amazon.com tries to do with multiple goals, one of them being the ability to offer truly unique products that are nowhere to be found on the Internet. I will keep a close eye on Exclusives' product listing, and alert the e-commerce giant that this time, its reputation is also going to be tested.
"We do expect the broadening of the product categories and geographical expansion," according to Peter Sauerborn, director of business development at Amazon who is in charge of this effort.
It would be good news for retailers and small merchants that have truly unique merchandizes to sell. As the e-commerce market stands right now, the marketplace model opens up a great revenue opportunity for small and medium-sized retailers, but because a web store is so easy to set up, the marketplace model also invites what I call "commerce-pirates," stores that carry no inventory but list products from other sites with their own markup. Sometimes, they don't even bother to do shipping, just type in their customer's name & address and let the original store to ship the products to their customers and they pocket the margin. The worst part is that those "pirates" even post the exact product pictures from other stores, and not even bother to change SKU # or merchandise description. Of course, when returns happen and customer disputes occur, they usually offload the task to the original store to handle as well. For small- and medium-sized merchants, whether to address this issue is a true dilemma. While these stores may expand customer reach for merchants, they cause headaches such as confusing customers, adding cost to handle sales and customer support through these stores, preventing actual stores from building direct relationships with customers. Taking legal actions based on copyright law (grabbing product information and image without authorization and proper compensation) is another option, but for small- and medium-sized merchants, this option isn't worthwhile from time and money perspectives.
Maybe this type of conduct is perfectly legal, or maybe calling them "commerce pirates" is too harsh. but I muse about the possibility that an e-commerce platform like Amazon's Marketplace can eliminate these "parasite stores." (Whoops, that may be an even harsher phrase to describe them). The Exclusives store may be the first step that Amazon.com tries to do with multiple goals, one of them being the ability to offer truly unique products that are nowhere to be found on the Internet. I will keep a close eye on Exclusives' product listing, and alert the e-commerce giant that this time, its reputation is also going to be tested.
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