Amazon.com Inc. will shut down its e-commerce platform hosting venture in 2016, sources tell Internet Retailer at the IRCE Focus: Digital Design conference this week in Los Angeles.
Four retailers in the Top 500 Guide and two retailers in the Second 500 Guide report using Amazon for at least some of their e-commerce platform work. Amazon, No. 1 in the Internet Retailer 2014 Top 500 Guide, declines to comment today about the future of Amazon Webstore.
But Amazon “seems to be notifying customers today” of the coming change, says Scot Wingo, CEO of ChannelAdvisor Corp., which facilitates retailer sales through Amazon and other web marketplaces. “We have about 100 customers that utilize the Amazon storefront technology. We are working with them to find new solutions.”
At the Digital Design conference, Kevin Richards, CEO of Ventura Web Design, told attendees that Amazon is telling clients Webstore will be phased out as of July 2016.
The current version of the service stems from at least 2010 when the e-retailer, according to an Amazon announcement, launched “a full-featured e-commerce product that enables small- to medium-sized retailers and manufacturers to quickly design, build and manage their multichannel e-commerce businesses using Amazon’s technology.”
One retailer that used the service reports a less-than-positive experience.
Past Generation Toys, which launched in 2007 and had been using Amazon since 2011, moved to a Shopify platform about seven months ago, says Joshua Kluger, who owns the toy e-retailer. “It just really seems the functionality (Amazon) provided was not up to spec (in regards) to what customers want,” he tells Internet Retailer today. Amazon still promotes a Webstore case study involving Past Generation Toys.
Another problem motivated Kluger to move: Online shoppers would see the Amazon branding on the platform and often decide to simply go to Amazon and buy what they wanted. Past Generation Toys had desired Amazon branding “in an attempt to gain credibility,” he says, but the prospect of more lost sales encouraged the move to Shopify, which provides e-commerce platforms to four merchants in the Internet Retailer 2014 Second 500 Guide. “I’m not saving any money,” he says about the move to Shopify. In fact, he says, because he took part in the Fulfillment by Amazon program, his Amazon Webstore had cost about $10 per month. Amazon Webstore today is promoting a price of $79 monthly, plus a 2% transaction fee.
Kluger adds that even though he left Amazon months ago, his Amazon representative had sent a recent email requesting time to talk.
In 2011, Target Corp., No. 18 in the Top 500, migrated its e-commerce site off of its long-time home on a platform hosted by Amazon. The migration led to multiple site crashes and contributed to the departure of the chain’s e-commerce head.