Will axing commission fees entice Amazon sellers to move to Google Shopping?
Google last week announced it was eliminating commission fees for sellers for purchases made directly through Google Shopping. It is also opening its selling platform to third-party selling tools.
Currently, commissions on Google Shopping range from five to 15 percent, depending on the items. Offering the service for free should help Google build out a substantial product catalog. According to Marketplace Pulse, Google Shopping had about 3,700 stores and other merchants at the end of 2019 versus three million active sellers on Amazon.com.
The change comes amid rising complaints from some small businesses that Amazon is squeezing them for more fees. Google’s president of commerce Bill Ready said in a blog post, “By removing our commission fees, we’re lowering the cost of doing business and making it even easier for retailers of all sizes to sell directly on Google.”
In May, Google began allowing merchants to list products on Google Shopping for free.
To ease the onboarding process, sellers can now use their preferred services for activities such as inventory, order management and payment processing. Shopify and PayPal are the first two added. Sellers that had an inventory of products listed on Amazon will also now be able to move them over to Google without having to reformat the data.
Finally, the company is adding a small business filter to the Google Shopping tab and promises more features supporting small and midsize businesses.
The move is being seen as a means to drive advertising revenues, an area in which Amazon has grown significantly in recent years.
Google is the second-most popular place to search for products online, but more than twice as many consumers start their search on Amazon. Product searchers heading to Amazon also have more of an intent to purchase than those heading to Google.
Adding more products to create a more relevant shopping experience for consumers will allow Google to charge advertisers more for better placement in organic search results. Mr. Ready said, “With more products and stores available for discovery and the option to buy directly on Google or on a retailer’s site, shoppers will have more choice across the board.”
- Buy on Google is now open and commission-free – Google
- Google Takes Aim at Amazon. Again. – The New York Times
- Google Is Coming After Amazon’s Marketplace Merchants – Advertising Age
- No More Commission Fees for Sellers Using Buy on Google – Adweek
- Marketplaces Year in Review 2019 – Marketplace Pulse
DISCUSSION QUESTIONS: Will waiving commission fees and easing onboarding help Google compete better with Amazon’s e-commerce marketplace? In what other ways may Google improve its positioning as an alternative to Amazon for sellers and consumers?