James Bezos, the founder and CEO of Amazon, has received quite a number of accolades for the success of his eCommerce brainchild Amazon.com in 1994. Not long after the boom of his online bookstore business, James quickly branched out his business and opened his doors to third party suppliers. After 16 years of leading the eCommerce niche, Amazon has yet again launched a new online innovation – the Amazon Webstore. Catering to small and medium sized business, Amazon Webstore is a cheap solution to achieve online success. For just $79 per month and less than 3% of sales charges, small to medium sized business owners can put the fate of their website and products on the hands of the giant.
With just barely 5 years of operations, things starting spiralling down for Amazon Webstore clients which led Amazon to the decision of slowly phasing out Amazon Webstore.
Even on their website the announcement was straightforward: “The Amazon Webstore service, an eCommerce solution to build your standalone website, is no longer available new sellers. If you are a current Webstore seller and have questions or need assistance, please visit our FAQs or contact us.”
That announcement alone signals an end to what was supposed to be the ‘light at the end of the tunnel’ for small to medium sized business owners.
For current Webstore sellers, Amazon sent them an email stating that the sellers will be given a 15-month window to transfer to another similar platform. In addition, Amazon Webstore vows to assist current Webstore sellers transition to other similar platforms. A Webstore seller, MarketingLand.com, said it has received a nemail from Amazon Webstore stating that the online platform will end its operations on July 1, 2016. Furthermore, Amazon Webstore encourages sellers to prepare for the inevitable change and to start exporting their data to the new platform they are transferring to.
Interestingly there have been mixed reactions towards the closing of Amazon Webstore from the sellers’ point of view. Some sellers feel that ‘it is just about time’ that Amazon Webstore stop operations while other sellers are still at a loss of what step to take. According Peter Sheldon, an eCommerce analyst, Amazon Webstore is just sucking the life out of small-medium sized businesses. He said that since all the products sold by the Webstore sellers appear in one big platform, the small sellers do have a hard time gaining leverage over big players, such as Amazon itself. Buyers usually choose the cheaper yet similar product which almost always is offered by Amazon and not by the small sellers. The underlying message being sent across here is that Amazon just stepped on the small feet of these sellers to gain that competitive advantage.
Whatever the real reason is behind the closure of Amazon Webstore one thing remains clear – the more than $30B value of Amazon was not even dented by the letdown of one of its by-products. Closing Amazon Webstore might even do well for both Amazon and the small-medium sized businesses. It will be good for Amazon because it can reassign budget spent from Amazon Webstore to another more profitable branch of Amazon. Moreover, it will be good for the small players because it can learn to stand on its own and innovate independently instead of just putting their business’s fate on the hands of another company.