In its second-largest acquisition, Amazon buys the company for $970 million.
Although retailers keep joining as sellers on the Amazon.com marketplace, others are leaving, citing lack of control over content and an inability to market to their Amazon customers.
There's one thing that Macy's, Buy.com, Gap, home furnishings merchant CarolinaRustica.com and sports merchant evo.com all have in common: They no longer sell through Amazon.com.
Ever since Amazon.com Inc. started letting other retailers sell on the Amazon e-commerce site, there has been a "swinging pendulum of support and pull-back" from major retailers who worry about Amazon getting an edge from seeing what other merchants sell on the Amazon marketplace, says Scot Wingo, CEO of ChannelAdvisor Corp., a company that helps retailers sell through e-marketplaces like Amazon and eBay.
Some retailers also complain about a lack of control over how their products appear on Amazon.com and difficulty in communicating directly with Amazon account managers.
"We didn't want to give them information on product pricing and sales that Amazon could potentially use against us," says Neel Grover, president and CEO of Buy.com. Buy.com, which stopped selling through Amazon in October, operates its own e-marketplace for third-party sellers and has a strict policy of not competing against them, he adds. Amazon does often sell the same products as retailers selling through its marketplace, and at times at a lower price, retailers say.
Amazon did not immediately return a call for comment.
Even as some leave Amazon, other retailers are flocking to its marketplace, says Eric Best, CEO of Mercent Corp., which help retailers sell through Amazon and other e-marketplaces. "We continue to see strong interest in Amazon's marketplace program," he says. "We launched more than 40 retailers among the Internet Retailer Top 500 on Amazon last year."
Best notes that many retailers recognize that Amazon accounts for a significant share of overall online retail sales, so that a presence on its site is a good way to get in front of consumers.
But retailers leaving Amazon say there are too many drawbacks. "We left not for a lack of wanting to sell on Amazon, but because of the stringent requirements," says Nathan Decker, senior manager of e-commerce at evo.com. "For us, it boils down to the fact that Amazon didn't let us market to customers we sell to on Amazon.com."
Richard Sexton, president and founder of furniture retailer Carolina Rustica, which operates a single store in addition to CarolinaRustica.com, says he decided to stop selling on Amazon.com last fall because of the lack of control he had over how many of his products appeared on Amazon. For products that were not exclusive to Carolina Rustica, Amazon often listed them next to inaccurate product images and descriptions, he says. This could confuse shoppers and leave them disappointed if they received a product that was not what they had expected. "Customer expectations could be different from our ability to deliver," he says.
That process became quite onerous when, after discontinuing feeding its product information to Amazon, Carolina Rustica found it had no direct way to ask via phone or e-mail why it was still being charged a fee for loading product data, Sexton says. "We couldn't pick up a phone and talk to anyone," he says. "It was like an e-mail black hole."
Instead of selling through Amazon, Carolina Rustica is focusing on other e-marketplaces including Shop.com, Become.com, PriceGrabber.com and TheFind.com, sites where it is easier to upload and control product information, Sexton says. He adds that he's also planning to join the marketplace on Sears.com and considering Buy.com.
Wingo says that many retailers selling on Amazon also have been concerned that Amazon can use information on their product sales to assist the merchandising and marketing efforts of Amazon.com and other retailers selling through Amazon.com. Another concern is that Amazon could use retailers' product information to deal directly with their product suppliers and cut the retailers out of the selling loop, he adds.
Wingo notes that he's unaware of any proof Amazon does this, but that such concerns have nonetheless led to retailers re-thinking the wisdom of selling on Amazon.
Amazon recently reported that 34% of total units sold in the fourth quarter stemmed from its marketplace.