South Africa - The search giant said it will eliminate the fees it charges retailers to let people buy directly through the Google Shopping service. Picture Courtney Africa/African News Agency(ANA)
South Africa - The search giant said it will eliminate the fees it charges retailers to let people buy directly through the Google Shopping service. Picture Courtney Africa/African News Agency(ANA)

Google is coming after Amazon’s marketplace merchants

By Bloomberg Time of article published Jul 23, 2020

Share this article:

By Gerrit De Vynck

Google unveiled a major initiative to woo Amazon.com Inc. merchants on Thursday, part of a broader quest to be the main place people go when they want to buy something online.

The search giant said it will eliminate the fees it charges retailers to let people buy directly through the Google Shopping service.

It’s the latest in a series of moves the company has made to make it easier and cheaper for retailers to get products in front of millions of people who use Google’s search engine every day.

Google is the world’s dominant search engine, but almost half of Americans start looking for things to buy on Amazon, while only 22% start on Google, according to a survey last year from research firm CivicScience.

Google Shopping has been around for years, but until recently retailers had to buy ads to list their products, and if people bought directly on Google the seller was on the hook for commissions of as much as 12% of the transaction. The company is nixing both these barriers, and has also started showing free product listings directly in the main search results.

In terms of functioning as a online marketplace, Google is nowhere near Amazon. Google Shopping had about 3,700 stores and other merchants at the end of 2019, compared with 3 million active sellers on Amazon, according to e-commerce research firm Marketplace Pulse. Without these merchants, Google won’t have enough product listings to be a leading e-commerce destination.

Google’s new shopping push coincides with rising complaints from some small businesses that Amazon is squeezing them for more fees. As much as 40% of every dollar in sales generated by third-party merchants on Amazon goes to the e-commerce giant. That includes warehouse storage fees and ads that push their products higher in product search results.

The Alphabet Inc. unit is rushing the changes to market to make them available for the massive wave of small businesses forced to sell online by Covid-19 lockdowns, said Google Commerce President Bill Ready. Searchers who want to support local or small businesses can add filters to find these types of merchants, he added.

Google said on Tuesday that merchants can upload their products to its shopping site in the same format Amazon requires, making it easier to list on both marketplaces.

Ready wouldn’t comment on competing with Amazon, but said Google’s vision is to make it as easy and affordable as possible for businesses to sell online. The company also announced integrations with Shopify Inc. and PayPal Holdings Inc. to help merchants manage their inventory and sell directly on Google. More integrations are coming, Ready said.

BLOOMBERG

Share this article: