3rd Party Products on Amazon: Should You Buy Direct?

If you’re shopping on
Amazon.com and find a
product you’re interested in buying that’s sold through a 3rd party, you have
two choices:

1. Buy the product directly from Amazon.

2. Head over to the 3rd party’s own ecommerce site to buy the product directly
from them.

Which choice is the right choice? As far as I can tell, #1 is the
better way to go. Here is one example of why that is.

The
other day, I purchased some bike pedals on Amazon for $49.99. They were
listed on Amazon by Bike
Nashbar
, so after my order was submitted, Amazon kicked the order over to
Bike Nashbar for fulfillment. Amazon makes a commission on this sale and Bike
Nashbar gains a sale by leveraging the power of Amazon’s brand and audience.
Everybody’s happy.

But wouldn’t it be cheaper if I jumped over to Bike Nashbar’s site? No. Here is
what I found:

The pedals on Amazon were $49.99 with $6.75 shipping:

Amazon Order Confirmation Email

The same pedals on Bike Nashbar were the exact same price, but the shipping was
higher ($7.25 vs. $6.75 when ordered on Amazon):

Nashbar Shipping Charges

I’m pretty sure that Amazon’s contractual relationships with companies like Bike
Nashbar forbid the 3rd party sites from undercutting the pricing they submit to
Amazon’s store. While the shipping was higher buying direct, that won’t always
be the case. But that’s not the real cost difference.

The true cost is time, measured three ways.

1. Amazon already has my shipping and billing information on file,
so I save time by not having to register with yet another ecommerce site in
order to make my purchase.

2. With every new site I register with, I can expect another set of marketing
emails to start hitting my inbox.

3. Consolidating my purchase history allows one site to provide better
recommendations to me down the line, speeding up my shopping and improving my
satisfaction.

Amazon is really in the driver’s seat here. They’re taking a fairly
significant cut on every purchase made through one of their 3rd party vendors
and they don’t have to ship anything. And for every purchase made on their site,
the odds of additional purchased by the same customer goes up. That’s one heck
of a strong business model.

Amazon's Poor Disclosure of 3rd Party Shipping Costs

Why does Amazon make it so hard to figure out which products in your shopping
cart are running up your shipping costs? Is it just me? Let me explain:

Last night, I added a few things to my shopping cart on Amazon. I knew that one
of the items shipping directly from Amazon and qualified for Amazon Prime, so
that would ship for free (shown in the middle of the first screen shot below).
In this case, that item was The Dip by Seth Godin.

The other items were going to ship from 3rd parties so would incur some shipping
charges that added up to $17.74 as the upper-right column shows.

Amazon Order Summary
Free shipping for one product. $17.74 for the other two in the order.

One of the two 3rd party shipped items was a pair of bike pedals from Bike
Nashbar, pictured below:

Crank Bros Candy Pedals

They were listed for $49.99 on Amazon, and it was clearly states that this
product, “Ships from and sold by Bike Nashbar” so I could assume there would be
shipping charges associated with this product.

Amazon Add to Cart

However, nowhere on the product page does it mention how much the shipping
charges will be. And, as the first screenshot above shows, shipping charged are
not broken out in Amazon’s shopping cart.

Since I had more than one item in my cart from a 3rd party vendor, the only way
I could determine the shipping costs of individual items would be to remove all
but one of the items from the cart. There has to be a better way to do this.

What really irks me about this is the order confirmation email I received only
minutes after placing my order:

Amazon Order Confirmation Email

Notice that it clearly breaks out the shipping costs associated with each of
the 3rd party shipped items? Why doesn’t Amazon do this in the BEFORE the
order is placed? It would have been nice to know that the product I ordered
from Northern Tool & Equipment generated $11.32 of the $17.74 I paid in
shipping.

Amazon can do better. They should give their customers the information they
need to quickly make informed purchasing decisions.

Amazon’s Digital Locker System: Proactive Customer Service

A look at how Amazon.com’s Digital Locker system makes life easier for customers and potentially will become a new revenue source for the retail giant.

Last week, I brought a Sony webcam home from work so we could test Skype’s new video chat features on a home connection. One problem: I forgot the CD with the driver at work. No problem, I figured. I’ll just download the driver from Sony’s web site. Sorry, it’s not available online. Only an acknowledgment that the product exists. I possessed a worthless piece of hardware and wasted thirty minutes on something that should have only taken a few minutes to straighten out.

Fast forward to today, where I was presented with the following display after purchasing a Belkin Pre-N Router for a friend:

amazon-digital-locker.gif

It turns out that Amazon is now providing manuals as PDF downloads from within account “Digital Lockers.” Now that’s customer service. The Motley Fool recently described this last month as Amazon’s Secret Weapon since it can be used to store a lot more than manuals. Rob Hof of BusinessWeek has theorized that the Digital Locker will become home to a digital music service .

The Fool also sees a digital music service in the future, but a hybrid service may also exist: “One of the technology’s more obscure new features lets customers who preorder upcoming CDs download a streaming digital copy of the album before their physical copy ships.

Great potential for improved customer service and growth in new markets.

To Belkin’s credit, they provide much superior than Sony their site where I can easily find and download manuals and drivers for the Pre-N Router:

belkind-pre-n-manual.gif

I’ve mentioned previously that Amazon is doing a lot of things right. Add one more thing to the list.

What do you think?

Have you used your Amazon Digital Locker yet? If so, for what?

What businesses use the web most effectively for post-sale customer service?

Who frustrates the heck out of you?

Share your thoughts in the comments below.

Cyber Monday One Week Later

A look at Cyber Monday a week after the fact.

A week ago, I wrote a post called, “Does Cyber Monday Exist?” where I said revenue for an online retailer I’m familiar with does, “as much as 2-3 times more revenue per day over the 2-3 weeks following Cyber Monday.” What’s happen?

Here’s a graph of daily online revenue from November 1st through Monday, December 5th:


Monday over Cyber Monday results: 25% increase in online sales. Not 2-3 times Cyber Monday, but significant enough to show that the Monday following Thanksgiving is not the peak of the online holiday shopping season.

What is the biggest concern online holiday shoppers have over the next two weeks? Will my order arrive on time?

Smart retailers find smart ways to address customer concerns. Amazon is one of the best at this. Here is a message currently running on their product pages:

Clicking on the holiday shipping link takes consumers to a table outlining what shipping options are appropriate for each day of the holiday shopping season:

And they reinforce their delivery promise during checkout by displaying the following message:

 

Amazon has done a great job addressing their customer’s main concern both when customers are considering adding a product to their cart and at checkout.

What concerns do your web site users have when using your site?

  1. Are they afraid you’re going to spam them?
  2. Do you address their shipping concerns?
  3. Do they understand your products?

The more concerns you can identify and address, the higher your conversion rate (percentage of visitors who “convert” to a sale/lead/subscription, etc.) will go.

Takeaways:

  • Cyber Monday isn’t the Monday following Thanksgiving.
  • Increase transactions by addressing your customer’s concerns throughout your site’s work flow.

Have you made any changes to your web site that have helped increase transactions? If so, please share an example in the comments field below.

Amazon.com’s Product Wiki: Customers Rule

Amazon.com has long been a leader in customer participation among retail web sites. If you haven’t been to Amazon in a while, take a quick look at the page for Freakonomics to get a feel for what Amazon is doing now.
Product pages include tons of user contributed information, including:
Customer Reviews
Customer Ratings
Ratings of Customer reviews
Customers who bought this also bought ______
Customers who views this also viewed ______
Listmania (customer generated lists of items that include this item)
And now they have new features, including tagging:
Customers tagged this item with ______
Customers who tagged this item are ______
And now the ProductWiki ( Customer-editable product information).
What the heck is a product Wiki?

Wikis are collections of information that are editable by all. For example, maybe you know something about the book Freakonomics that isn’t already mentioned on Amazon. Now you can share that knowledge with all future visitors to that page of Amazon’s site with a couple clicks. The wiki evolves over time as people add their two cents, ideally improving the content.
Why is Amazon getting into Wikis?

Amazon is in the business of selling products. A lot of products. Their expertise is in managing inventories and making good use of customer data. They do not know, or pretend to know, anything about the individual products they carry on their web site. That expertise comes from a combination of customer behavior (people who bought this also bought ___) and user contributed data in the form of reviews, ratings, and now Wikis.
How does Amazon benefit from this?

Anything that increases the odds of an Amazon customer having a good buying experience is a good thing. What are the odds that you’ll find a given book you buy on Amazon memorable? Those odds go up as Amazon provides more guidance through aggregated consumer behavior, and now wikis. Descriptive product content coming from genuine experts (people who’ve read the books, used the kitchen gadgets, bought the plasma TV) increases consumer confidence, increases the odds that Amazon will have a satisfied customer, thus increases Amazon.com’s bottom line.
What do you think? Will Amazon’s ProductWiki catch on? Do you think the success of Amazon’s wiki will correlate with future sales? Does Amazon already provide enough information for consumers without a Wiki?