Amazon.com has made a significant business for itself by helping other retailers develop and operate their own e-commerce sites. Chains such as Target have found working with Amazon provides a number of benefits in the know-how related to running an online business. but also for some of the traffic directed its way from the Amazon.com website.
Now, European retailers Mothercare and Marks & Spencer have plans to roll out new sites with Amazon launching e-commerce platforms for the two.
The time for expansion seems right based on projections for the U.K. and the European continent.
Consumers from European nations are flocking to the internet in large numbers. Between 2006 and 2011, the number of people who go online to shop is expected to grow from 100 million to 174 million. At the same time, sales revenues are expected to more than double, according to Forrester Research.
Tamara Mendelsohn, a senior analyst at Forrester, told the Puget Sound Business Journal, "The time is right for the U.K. market and other markets in Western Europe. Growth rates for e-commerce are strong. Businesses are beginning to evaluate their options, and there are many companies moving to new platforms."
There's no doubt that working with other retailers have been a benefit to the top and bottom lines at Amazon.com. But not all is rosy. The company had a high-profile breakup with Toys R Us and Borders Group is said to be looking at its relationship with Amazon to determine if it should continue. In the U.K., Amazon had engaged in a similar relationship bookseller, Waterstone's, a unit of HMV Group, which ended when the chain chose to launch its own online business.
Amazon has a number of other initiatives it has launched to support retail partners including Fulfillment by Amazon, which lets merchants selling through Amazon have access to its warehouses and/or fulfillment centers.
The e-tail giant also launched WebStore to give smaller companies the ability to create their own branded sites backed by the sophistication of Amazon's technology.
Discussion Questions: Where do you see Amazon's business in terms of being an e-tailer itself and also as being a third-party service provider? Which of these aspects of the company's business or perhaps another not mentioned here do you think offers it the greatest opportunities moving into the future?