Amazon's lower fees may draw antiques, collectibles dealers away from eBay and other online marketplaces
When I was a kid in the 1950s, monster movies were all the rage. There were dozens of monsters on the big screen; King Kong, Mothra and Rodan were a few of my favorites. Of course, the undisputed leader in the monster movie category was Godzilla. To date, there have been more than two dozen Godzilla movies, more than twice as many as the next-highest contender: King Kong. Godzilla was alternately a good guy or a bad guy, either destroying cities or protecting them from other monsters.
Today, Google is the Godzilla of the online world. They are so big that for 15 months the Federal Trade Commission has been investigating them as a trade monopoly. But Google’s days are numbered as the World Wide Web Monster. These days, Google-zilla is shaking in its lizard suit.
Google is losing significant revenue to the toughest competitor it has ever had. No, it’s not Facebook; it’s not Microsoft, eBay or Apple. It’s Amazon. Amazon is having a major impact on the retail world, both online and offline. Retailers that have recently closed their doors – most notably Borders and Circuit City – have pointed fingers at Amazon as a factor contributing to their troubles. Even Wal-Mart has started to feel Amazon’s pressure, as the Big Box giant has begun to remove all Amazon Kindle products from its stores.
This is good news for antiques and collectibles dealers, because Amazon takes antiques dealers’ inventory out of the labyrinth that is Google Search and away from the costly listing fees of eBay.
Consumers are discovering that they can find products faster and pay for them easier when they use Amazon rather than Google. According to Forrester Research, 33 percent of online users now start product searches on Amazon, opposed to 13 percent who begin their product searches from a traditional search site (i.e., Google). comScore found that product searches on Amazon have grown 73 percent over the last year, while shopping searches on Google have been flat. Google is threatened by this change because its revenue comes from product searches (advertising sales) not informational searches.
Currently, 20 percent of Google searches are for products, but that number is dropping steadily. Here’s why: Which of these processes would you find easier?
Google (or other search engine):
- Search for “baseball cards”
- Analyze the search results
- Click through several sites to compare prices and products
- Find what you want, click “Buy Now”
- Enter your shipping and credit card information.
- Search for “baseball cards”
- Browse for a product you want, without changing sites
- Buy via the “One-Click” button, which you have already set up with your shipping and payment information.
Without question, Amazon is easier and faster. For those searching for products on a mobile device, Amazon has an even bigger advantage over Google. More than half of all product searches are done on a mobile device, and Google is frustrating to use on a smartphone. All Google offers is a search bar, and the majority of retailers don’t have mobile website applications. Websites and search results that are designed for desktop computers don’t translate well to smartphones; there is too much scrolling involved.
Amazon, however, offers a mobile application interface, and they’ve been giving their application away for free for years. It’s been predicted that within two years 90 percent of U.S. cell phones will have been replaced with mobile devices (smart phones). Amazon is positioned to become the dominant force in Internet product searches.
To become the Net’s dominant product search engine, Amazon is actively broadening its product base and is seeking new third-party sellers, including antiques and collectibles dealers. In an interview with ecommercebytes, Matt Williams, Director of Business Solutions for Amazon, said, “As a seller, antique dealers can submit to a kind of a global category called ‘Everything Else’ and those items will surface in search (results). We have a number of antiques and collectibles sellers today that are selling on Amazon, as well as those that have Web Stores that are selling antiques and collectibles on their own website.”
Dealers who have been selling on eBay find Amazon particularly attractive, because it usually costs less to sell (depending on the type and value of the inventory). Unlike eBay, which charges listing fees, final value fees, postal fees and PayPal fees, Amazon charges no listing fees, credit card fees or closing fees. For dealers listing 40 or more items per month, there is a fixed monthly fee of $39.99, plus a referral fee on each sale (15 percent on most items, less for some collectibles). Dealers listing fewer than 40 items pay 99 cents per item sold, plus a referral fee. If an item doesn’t sell, dealers don’t pay anything. Net proceeds from sales are transferred to a dealer’s bank account every 14 days, but arrangements can be made to transfer money as often as every 24 hours.
Google, while it may send “free” organic traffic to your website, is actually a dealer’s most expensive selling option. When you factor in the cost of a good e-commerce website, a mobile website, credit card processing fees, Adwords fees and the cost of search engine optimization, “free” search engine traffic is actually quite expensive. And, you’ll pay most of these costs whether Google sends you any traffic or not.
At the moment, it appears that the future of online retailing belongs to Amazon. But the online environment changes so quickly that it’s hard to predict what retailing will look like five (or even two) years from now. Today’s Godzilla is tomorrow’s cartoon Purple Dinosaur.
For dealers who have the basics of online selling in place (a database with descriptions and photos), making the change from one selling platform to another should be as easy as setting up a new account.
Wayne Jordan is a Virginia licensed auctioneer, certified personal property appraiser, and accredited business broker. He specializes in the valuation and liquidation of estate and business assets. His column Behind the Gavel appears monthly in Antique Trader. Learn more at www.waynejordanauctions.com, 276-730-5197 or firstname.lastname@example.org.
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