eCommerce and

Amazon has been in the news quite a bit lately, whether it’s the Kindle, the Zappos acquisition or the creation of their outdoors specialty section. Some topics get more press than others but I find the tactics Amazon is using to bolster their eCommerce presence very interesting (as if they needed too) and doing so at the category level. It's yet to be seen how Amazon will leverage or integrate Zappos even though they state it will remain a separate business but they now own Zappos, Endless and the shoes category on Amazon.com (that’s a lot of shoes). In the outdoors space they recently announced their new specialty outdoors section which is offering gear from a selection of top tier merchants. We have seen this before with toys and other categories of products as well. While Amazon is the largest eCommerce website, they now seem to be conquering through category and acquisition, creating destinations where they now attempt to rule with the best selection, price and customer service.

What I also believe is important to note is that many large eCommerce websites also have an Amazon store.  This gives Amazon two inherent advantages, the first being that they know what you are selling, at least on Amazon, and second of those SKU’s they have access to which ones are top sellers.  This data also applies to other etailers within the same verticals.  Along with SKU data collected from marketplace merchants Amazon also gains insight on what those businesses do in sales, growth, and customer service which they monitor rigorously.

Now whether Amazon uses this data or not, or to what extent they are using this data may yet to be seen but it means that they could start stocking the best SKU's, therefore circumventing merchants through exclusive manufacturer deals. They also have an idea of which businesses might be better partners or possible targets for acquisition.  Targets based on their account performance. I sure can't think of a better place I would rather be than in Amazon's shoes right now (excuse the pun).

Since it seems that eCommerce websites may be good targets for acquisition right now, I think the bigger questions might be “What is Amazon's master plan? How do they plan to dominate eCommerce and what are they or others looking for in an eCommerce acquisition? What businesses might fit that mold?”

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• Analytics Evangelist Avinash Kaushik, wrote this blog recently and I think as far as eCommerce blogs go, this title is the best so far this year “Paris Hilton, Kim Kardashian & Telling Stories With Data”.


• Search Engine Journal shared a tool this week that shows you how your page listing might look within Google SERPs, and it’s really sweet.


• Are your landing pages in need of a makeover?  Copyblogger released an insightful case study on how they could assist Cars Helping America.


• The big story this week was the announcement that Google is working on the Google Chrome Operating System!


• Reviews are one of my favorite website features, but only when they are true.  One suspicious lawyer investigated and found that Amazon’s system is still dealing with frauds.
   

Kohler is arguably one of the most innovative brands in the home improvement industry. The new Karbon faucet has completely transformed the kitchen and more specifically revolutionized the kitchen faucet. Meanwhile Kohler seems to effortlessly create bathroom fixtures that are not only sleek but save water, like the Escale toilet.

• By now most of us have heard the news of Michael Jackson’s death, what really surprised me was the way in which many of us found out about it…. Twitter.  Twitter may be having a far greater impact than we may even know.


• This title speaks for itself: Amazon: “A Search Engine With A Warehouse”.


• We know that load times affect user behavior, but would you say that fractions of a second could have a billion dollar price tag?


• Are you ignoring important landing pages?


• Apparently there is controversy over personalized ads, but are we really surprised that people don’t want to share their social security numbers?

Kohler is arguably one of the most innovative brands in the home improvement industry. The new Karbon faucet has completely transformed the kitchen and more specifically revolutionized the kitchen faucet. Meanwhile Kohler seems to effortlessly create bathroom fixtures that are not only sleek but save water, like the Escale toilet.

After being given an excellent bill of health post Q1 2009, especially given the poor economy, rough news came from the world's largest internet retailer.

Last Friday, Amazon.com announced that it would pay $51 million to settle a breach of contract lawsuit filed against the online retailer by Toys R Us in May of 2004.  In a regulatory document filed with the Securities and Exchange Commision, Amazon stated that the payment must be delivered in quarter three of 2009, but will be accounted for in the retailer's second quarter earnings.  According to Amazon, in response, Toys R Us has agreed to dismiss all claims.

After unsuccessfully attempting to develop its own online presence, Toys R Us teamed up with Amazon by agreeing to pay $200 million for exclusive rights to sell certain products on Amazon.com.

The lawsuit, which ended the relationship between the two retailers, accused Amazon of selling products online in which the companies had agreed Toys R Us would have exclusive rights.  More specifically, Toys R Us claimed that Amazon violated the terms of their partnership, which began in 2000, by allowing other merchants to sell certain toys on Amazon.com.

In response to the suit by Toys R Us, Amazon filed a counterclaim, and a request to prematurely end the agreement.  Amazon alleged that Toys R Us failed to fulfill contractual obligations due to the inability to supply demand for top selling products and solicited $750 million in damages.  In March of 2006, a New Jersey Superior Court sided with Toys R Us which lead to the partnership being extinguished.

According to Imran Khan, a J.P. Morgan analyst, the payment reduces Amazon's Q2 and full-year EPS by $0.08, to $0.20 and $1.45 respectively.

Kohler is arguably one of the most innovative brands in the home improvement industry. The new Karbon faucet has completely transformed the kitchen and more specifically revolutionized the kitchen faucet. Meanwhile Kohler seems to effortlessly create bathroom fixtures that are not only sleek but save water, like the Escale toilet.

One of our latest projects, which I have been a part of, is optimizing our Amazon store both for dollars and seller metrics to make it a better channel for us to sell through. Our account has been upgraded a few times and we are in a prime spot to really take advantage of the Amazon Marketplace. As part of that journey I continue to be amazed at two things.  The first is how many sellers, buyers and products Amazon has on its website.  It’s amazing that such a site can exist. The second thing that has baffled me is how hard it can be to integrate with Amazon and the amount of support and partnership that can sometimes be lacking or completely unavailable.

I understand that Amazon is the 10 ton gorilla in this arena but at the same time it seems like there might be some issues and limitations with their merchant model. Just to note a few of the areas we have had issues with are: Their entire integration process (although much of it was finally worked out), product normalization (Amazon has an extreme reliance on UPCs), the feedback system (which in some cases I am still unsure if it is calculating right), and customer metrics (we found out the hard way that these metrics play an extremely important role in how Amazon treats your account.  Not only do they play an extremely important role in how your account is measured and judged by their “Seller Performance Team”, but they just started giving sellers access to this information a couple of months ago.  You would think, and maybe this is just me, that if these metrics are so important to the seller’s account status that Amazon would make the reporting on these metrics readily available to sellers… from the get go).

The highlight of one of my frustrations with Amazon was over the phone with a contact that was helping us with our account. After I explained that the first person who had worked with us to upgrade our account (you know during the courting phase of the account upgrade process) was really helpful and talked up partnership, and a better relationship and process with Amazon.  He proceeded to tell me that there was little he could do with the issues I was asking about and mentioned that Amazon was simply too big to help us in that regard. This made me think, “Is Amazon too big to effectively help merchants and will merchants continue to deal with that?”

I don’t know about the rest of you but I have no idea where this week went?  This next week is special to us here at Gordian Project, as we will be celebrating the PlumberSurplus.com four year anniversary!  Time flies, whether it is just this past week or four years since PlumberSurplus.com went live.

• Google wants us to sign a petition to free the airwaves; if you are interested in signing click here.   The Houston Chronicle reports on the subject and seems to honestly try to present both sides of the argument between those who oppose what Google is trying to do and those who are for it. 
• I liked this article because I think the author did a good job of comparing two very different consumer internet companies, Blue Nile and WebMD.  What surprised me was in the very first sentence where the author referenced web 3.0.  I think I know the new buzz word for this year, as web 2.0 is soooooo 2007.  It totally reminds me of that commercial from IBM… bingo! 
• SmartBargains 1, Overstock 0 
• Is there anything that Amazon won’t do?  In my opinion, not really.  On Wednesday Amazon unveiled A9.com, their version of a Google Product Search?
• This weeks Google Olympics logos:
  

Like other online retailers, we have a presence on the Amazon Marketplace. Amazon has a great model that allows quality sellers to make their products available to millions of buyers. However, their integration model for Marketplace sellers is kind of like the Bejing Olympics; dirty and dirtier.

We began with a smaller offering of some of our most popular products, and gradually increased the offering (and sales) on Amazon. Recently we were offered the chance to become an Amazon Gold Seller, meaning among other things that we’d offer more products for sale on Amazon. More products listed on Amazon = more sales from Amazon. A good thing, to be sure; however, we were currently manually entering Amazon orders into our site, and this was about to flood our customer service department.

Never fear, IT would come to the rescue (I left the cape at home though). As we had successfully integrated with PayPal and Google Checkout over the past year, I was pretty confident that the Amazon integration would be pretty straight-forward. After all, we are talking about the world’s largest online retailer. Why, they probably had a team of monkeys on standby to help with my every need, sample code to do the work for me, and color coded, easy to follow documentation that would point me right where I needed to go. Heck, I may put this one on autopilot and go golfing with my son.

So I began this integration the same way as always – looking for documentation online. Hmmm… that’s funny, I can’t seem to find what I’m looking for. No, that’s not it. No, I don’t want Amazon Web Services.

After a couple fruitless hours of searching, I finally just emailed our Amazon representative...

Matt: “Hi, can you email me the documentation to integrate with Amazon so we can process orders programmatically” 

Amazon: “Let’s schedule a call with your technical team and we can discuss the options.  We currently don’t have a formal document that describes this process.” 

Say what?!?!? The world’s largest online retailer and Marketplace to thousands of merchants doesn’t have documentation for integrating with them? Turns out no, they don’t. 

Some key paraphrases from that call and subsequent emails:

Matt: “Can you tell me how to access our orders?”

Amazon: “In order to download your orders, you have to use this tool (AMTU) that is open source. We wrote it, but we don’t support it at all. You have to download it from somewhere else”.

Matt: “I see online that you have a sandbox for testing this integration. Can you set me up with access to that?”

Amazon: “We no longer have a test environment. You have to test it live.”

Matt: “How can I push our order ID back into Amazon’s system?”

Amazon: “That option is not supported using flat file or manual fulfillment.” (The method they recommended we use)

This story does have a mostly happy ending. In a matter of a couple of days, we were able to integrate with Amazon and import our Amazon orders into our order management solution, relieving a large burden from our awesome customer service team and freeing them up from data input to actually helping our customers.

If you are interested in more information regarding integrating with Amazon, PayPal, or Google Checkout, feel free to comment. I’m here to help!

I am happy to say that today is intern appreciation day at the SurPlex.  An excellent lunch, a basketball tournament, foosball and video games will be enjoyed this afternoon; I, for one, am quite excited.  Let’s get down to the business of eCommerce, and check out my updates for the week.

• Free sales-tax will no longer be a benefit of shopping online in New York. 
• Amazon uses friends to help create product recommendations, and a few other tools you may not be aware of. 
• Blockbuster throws Netflix for a loop by offering to purchase Circuit City. 
• Apple may be more susceptible to economic slow down in the United States because of their presence is strongest here as opposed to overseas. 
• Microsoft is testing Live Mesh, a system that enables users to synchronize their handheld devices and computers by way of an internet based application.