Google close to launching marketplace says WSJ
Scot Wingo, CEO of ChannelAdvisor, broke the news today on the Amazon Strategies Blog that Google are considering the launch of a Google Marketplace.
The Wall Street Journal directly compares a possible Google Marketplace with Amazon Prime (which costs $79 in the US to access free next day delivery). The WSJ says that the Google Marketplace would enable major retailers and shippers to create a service that lets consumers shop for goods on the Web and receive orders within a day for a low fee.
Scot Wingo points out that Google have the four main constituents needed for a marketplace – Buyers, Sellers, Catalog (Google Product Search) and a Payment system. If they do go ahead the WSJ suggests it would begin with a trial in the San Francisco Bay area in conjunction with retailers such as Macy’s, Gap and OfficeMax.
The Google Marketplace would join the dots between Google Shopping, Retailers Inventory and available shipping options to determine if the product could be delivered next day. This suggests technology similar to eBay’s Milo which brings local retailers inventory availability onto the web. However Scot Wingo also points out that retailers aren’t set up to accept orders over the web (a technology issue) and that also local retailers “typically have a) terrible inventory systems and b) little to no outbound shipping capabilities”.
It’s very doubtful that in the immediate future a Google Marketplace would embrace small retailers or be available outside of the US. However if trials are successful then undoubtedly it would be rolled out in more countries.
The big question has to be whether smaller retailers would ever be included or if it would be limited to larger retailers with stock held in multiple locations across the US. Having multiple locations is a very different requirement in the US to the UK – in the UK pretty much anything can be shipped anywhere in the country within 24 hours so long as it’s in stock. In the US shipping coast to coast within 24 hours across six time zones isn’t quite as simple.
However this pans out it’s going to send an electric shock through Amazon and eBay management. A Google marketplace is possibly the biggest threat to the incumbent marketplaces, although the threat may be tempered if the offer is limited to large retailers with multiple locations.
If smaller retailers can cut a slice of the action I’d predict that they’ll leave the incumbent marketplaces in droves. I’d recommend against this though, regardless how much business you gain from Goodle why would you cut off the income from existing marketplaces? If you do get the opportunity to add Google as a marketplace look at it as an addition, not a replacement for eBay and Amazon.
Debs says
2:01 am on 02/12/2011
This potential move by Google may cause eBay to embrace smaller sellers as I imagine big retailers are more likely to be drawn to Google Marketplace and abandon eBay.
James says
9:52 am on December 2nd, 2011
I dont see why people would abandon ebay & Amazon. In most markets you have a company taking most of the business/monopoly but people still buy from others, people like to support an underdog, plus you need competition to keep prices moving.
Thousands of companies across the country have invested thousands of pounds to sell vast stock specifically through eBay and Amazon, I personally think these people would hang on to eBay and amazon for as long as they could, as no doubt adapting your whole inventory and business to sell on a unchartered marketplace is going to be a time consuming job.
The problem would be the classification of small and large business’. A large business will have the resources to put a team on setting up a new marketplace, also they generally have the buying power to put out good prices/deals.
I personally think this is a major threat to the smaller sellers, the big players getting the the fancy new marketplace and continuing to put out great prices.
Chris says
9:22 am on 02/12/2011
The first question will be where do they set the boundary between Small and Large? We saw recently the UK Government call Small as being with a turnover less than £50 million. I would have thought that a turnover of a £1million per week(£50million a year) was very definitely Large).
As ebay has been bending over backwards to cater for the Larger end of the market they might be very happy if the limit was set at £50million per annum. However if the limit was set at say £5 million per annum I would imagine that ebay management would be in total panic.
Just think they would have to fill the gap left by all the larger sellers as I can imagine a mass migration to Google. In which case for the first time in years perhaps ebay would have to cater for the needs of the smaller end of the market.
Of course it would not only be ebay itself. Paypal would also find itself in trouble. Its volumes and turnover would drop dramatically. So perhaps ebay and Paypal would be looking at all sorts of ways to try to regenerate their business and the only place would be from amongst us mere mortals.
Gary says
9:59 am on 02/12/2011
There won’t be a mass migration to Google. It will just be another marketplace open to large sellers.
I would expect some dilution of ebays market share though.
The real question is will google search give a higher ranking to sellers on the google marketplace than on ebays?
Now that would be unfortunate for ebay.
Chris says
4:49 pm on December 2nd, 2011
Surely Public Image will have a significant impact. Google on the whole is liked and trusted ebay well perhaps not in the same league. So you can expect that Google will rapidly become a major site while ebay will lose a significant part of the market.
Obviously this will all be factored in by the big players when they do their calculations. If ebay is losing market share and still very expensive then you can imagine the big players taking the decision to concentrate on Google because it makes economic sense. Then there will be a mass migration from ebay and this could be in as short a time as weeks and months of the Google site going live(not just in the original experimental area but across a) the whole of the USA and then b) the rest of the World(even in only an area at a time).
The big players all will monitor the cost effectiveness of using differant sites. This will be done regularly perhaps monthly. If there are significant changes then the reaction could be very quick.
After all why do you think that ebid is not host to the big players? Because no doubt it has been monitored but the equivalent of “footfall” was just not great enough.
Warren says
4:02 pm on 02/12/2011
People have to sell multi channel to be successful so this will just be another channel.
tbp says
4:39 pm on 02/12/2011
Surely this is much more of a threat to Amazon than it is to eBay?
Gerry007 says
6:45 pm on 02/12/2011
Then there Alibaba thinking of buy Yahoo, who used to do selling anyway.
Bigger threat to small ebay sellers, as all the far east sellers will have access to global markets & all the imported stuff from HK, etc, will be offered cheaper than UK sellers can sell at.
Gary says
8:25 pm on December 2nd, 2011
Alibaba are probably after Yahoo for the mothballed marketplace. Given that ebay claim to have social networking aspirations (why?) and that Yahoo are up for grabs then eBay may well come in with a counter offer.
The Yahoo search engine surely has to be better than eBays own!
Google are big enough. Why don’t they buy eBay?
ebuyerfb says
5:43 am on December 3rd, 2011
The Yahoo search engine is Bing. Considering that they’ve hired a lot of the top people who worked on it they are basically made by the same people.
http://blog.seattlepi.com/microsoft/2009/06/26/yet-another-microsoft-exec-leaving-this-time-from-bing-team/
http://www.theinquirer.net/inquirer/news/2023539/microsoft-search-expert-bings-ebay
Chris says
8:39 am on December 3rd, 2011
There are all sorts of reasons why one company buys another or not. No doubt Google have run the rule over ebay. But for whatever reason they seem to have decided not to buy ebay and instead to go for their own Market Site.
One of the most obvious reasons is that they have decided that they can do a much better job starting from scratch than by buying ebay.
No doubt they have had a team closely analysing ebay and indeed Amazon. They have been looking at how and why these sites do things. Indeed Google has probably looked at sites like Tamebay and analysed the comments that have been made. Its not that they are going to take them all into account. But they will no doubt have thought about them.
Then when they go live experimentally(after no doubt having tested everything thoroughly) they will be looking to have everything well sorted(although from my experience no matter how much testing you do for anything when you go live for the first time something unexpected always crawls out of the woodwork).
But hopefully the first experimental area will prove that everything is basically sound and from there it will soon be rolled out across the US and then Europe(including the UK).
Hopefully when the first experimental area is rolled out we will get a good idea of just what market they are looking at. Hopefully the smaller end will get a chance on it and that it will attract a significant number of Buyers and Sellers and it will give a really good experience to all.
hawkwind says
10:23 pm on 02/12/2011
How ironic it would be if ebay complained that Google were higher ranking sellers on the google marketplace than on ebays?
Google could call it Best Match 5 perhaps
andrew says
11:48 am on 03/12/2011
Great news for Channel Advisor I would imagine as I am sure Scot will add this channel.
Digby says
6:05 am on 04/12/2011
I think Google should stick to what it does best (used to do best) ie Search.
They keep trying all these silly diversions and often end up closing them.
I mean Google Checkout is not yet world-wide.
Arn’t they happy with billions in the bank already ?
Competing against your customers is not a good look really.
Old Hand says
12:34 pm on December 4th, 2011
Gotta have growth, that’s the only metric that is considered important. Growth at any price, doesn’t matter how much money is wasted chasing it. Doesn’t matter if the effort fails, at least they tried. Can’t ever be happy with what you’ve got, the bankers always want more.
Sarah says
9:14 pm on 04/12/2011
I think Google have been using Google Shopping as a Beta Version for the New Market place .