Amazon Sells Itself

Discussion
Jun 23, 2003
George Anderson

By George Anderson


Amazon.com sees a bright future for itself in the B2B arena.


The Internet retailing giant has found that selling its technology to other companies is a profitable way to build its business. So profitable, in fact, the company has spun off a subsidiary, Amazon Services, to handle its MerchantsatAmazon.com and Merchant.com programs.


MerchantsatAmazon.com enables retailers such as Gap and Nordstrom to display their clothes and accessories on Amazon.com. According to The Associated Press, “Retailers’ computers link with Amazon’s to keep track of inventory and sales. Amazon handles billing and gets a commission or fee, while the retailer ships the product.” Apparel is the fastest growing product line on Amazon.com.


The Merchant.com program involves Amazon building and running Web sites for other retailers such as Target and Borders.


Moderator’s Comment: Does Amazon make itself more vulnerable
or stronger through increased reliance on business with other retailers? What
challenges and opportunities do you see for the Amazon Services susidiary?


Amazon invested approximately $1 billion to get its technology
to its current point of sophistication. Even at half that, is there any company
that would be willing to make the type of investment necessary to fight Jeff
Bezos and company for its Amazon Services’ customers and prospects.


The AP reports 19 percent of all items sold at Amazon.com
in its last fiscal quarter were by third-party merchants. That was up from 13
percent for the same quarter a year before.
[George
Anderson – Moderator
]

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