AMAZON ‘TRUSTED BRANDS’ AIMS FOR SHARE IN AUCTION
Byline: Vicki M. Young
NEW YORK — Amazon.com is testing a “trusted brands program,” in a bid to gain market share in the auction arena.
The new program, launched Monday, with gear.com and Service Merchandise as online partners, is set to run for three months, according to Jeff Blackburn, general manager for Amazon.com auctions. Amazon, he noted, is looking to add apparel, jewelry and accessories e-tailers to the program.
Blackburn told WWD that Amazon expects a full rollout of the initiative in August, when it will have signed on more “branded merchandise” partners.
Even though retailers such as J.C. Penney are holding their own auctions, and hosting them through third-party vendors such as FairMarket, Blackburn said Amazon hopes to pick up that part of the business, as retailers look to onload excess inventory. “We can do it better at a more cost-effective price,” Blackburn contended. “Amazon’s advantage is its 20 million customers who access the site.”
According to the Amazon official, “hosting auctions is a profitable business” for the company, which is based in Seattle, because “there are no warehouses” for it to operate. From that business, Amazon gets a listing fee, plus a commission of between 1 and 10 percent for each sale. The company also gets a merchandising fee, if a retail partner wants a special placement on the auction site.
Blackburn cited the security Amazon can provide retailers and shoppers in handling payments online. Registered customers using the Amazon payment process are guaranteed for up to $1,000 in any dispute over merchandise bought at the dot-com’s auction sites.
“The average buy is under $100,” Blackburn said.
The test program complements Amazon’s existing auction site and zShops, both platforms for the smaller businesses that want to list their product for sale but have neither the distribution capability nor the funds to set up their own Web site.
Amazon’s own inventory isn’t part of the new auction site.