February 7, 2011, 4:01 PM

Big retailers let their Amazon channel run dry

Macy’s, Buy.com and Gap are out as third-party sellers on Amazon.com.

Lead Photo

Consumers can no longer buy products from Macy’s Inc., Buy.com Inc. and Gap Inc. on Amazon.com Inc., as each of the three retailers has joined smaller retailers in pulling their products off of Amazon.com’s marketplace in recent months.

Ever since Amazon.com Inc. started letting other retailers sell through its e-commerce platform as third-party sellers, there has been a “swinging pendulum of support and pull-back” from major retailers concerned about the ability of Amazon, No. 1 in the Internet Retailer Top 500 Guide, to use marketplace retailers' sales information for competitive purposes, says Scot Wingo, CEO of ChannelAdvisor Corp., a company that helps retailers sell through their-party e-marketplaces.

Other concerns expressed by retailers have included 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, No. 32 in the Top 500 Guide. 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.

“Macys.com previously sold product through Amazon.com but has discontinued doing so,” a Macy’s spokesman says. “We believe that Amazon no longer represents a productive source of customer business for Macys.com.” Declining to be more specific about why Amazon's customer base no longer suits Macy's, he adds that the multichannel department store retailer is aggressively marketing its online merchandise assortment through its physical stores as well as online "as part of an omnichannel strategy."

The Macy’s spokesman also notes that Macy's, No. 20 in the Top 500 Guide, “has enjoyed its partnership with Amazon.com and wishes its marketplace concept continued success.”

Efforts to reach Gap, No. 23 in the Guide, for comment were unsuccessful. A search on Amazon.com today for Gap showed product listings indicating the products were no longer available on Amazon.

Smaller retailers have also decided to stop selling on Amazon. 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.

Sexton adds that Amazon’s service to third-party sellers had declined steeply in recent years. When it began selling through Amazon nearly a decade ago, Carolina Rustica had a dedicated account manager, but in recent years was only able to communicate with Amazon through a generic customer service e-mail address—and a reply could take a day or two, Sexton says.

That process became quite onerous when, after discontinuing feeding its product information to Amazon, Carolina Rustica had to use the generic e-mail process to ask why it was still being charged a fee for loading product data, Sexton says. “We couldn’t pick up a phone a 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 their strategy of using Amazon as a selling platform.

Amazon recently reported that 34% of total units sold in the fourth quarter stemmed from its marketplace.

Sexton will speak on site navigation at next week’s Internet Retailer Web Design & Usability Conference in a session entitled “A navigation plan of action.”

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