According to this article 86% of Americans who have bought something online said they’ve purchased from Amazon before and pressures on competitors as Amazon now controls more than 19 percent of all U.S. e commerce revenue, compared to 9 percent in 2001.
Google attracted only 13 percent of potential buyers as the first stop shop for product research. This is noteworthy change from 2009, when Google led Amazon among consumers 24 percent to 18 percent.
The downside for Amazon comes at the expense of retailers selling through the amazon marketplace:
There have been reports of sellers going into extreme pricing wars to win buy boxes (competing against other sellers and Amazon themselves). On top of that, there have been multiple retailer reports of Amazon reaching out direct to manufacturers that sellers on Amazon use (since retailers give up rights to all sales data that takes place on Amazon, Amazon can easily look at the big picture of their sales data and pick and choose where to expand their own fulfill by Amazon product line). Amazon may soon feel the pain as more retailers leave to list their product elsewhere.
A quick look at the Stock performance of GOOG vs. AMZN over the past 9 months shows GOOG the clear winner. Obviously this is based solely on ad and click through revenues as some things will never be sold via AMZN. What is interesting is that AMZN has set it’s sites on Groupon (GRPN) and similar competitors with their Amazon Local program.
4 Responses to GOOG vs. AMZN
Great post. I do exactly what Forrester’s 30% do: start my product search on Amazon. If the product is out-of-stock or the price too high, then I go to Google to look for vendors, or I may also go to eBay (about a 50/50 chance).
My main reason in the past to use Amazon was being able to avoid sales taxes and get free shipping on many items. But now that Amazon has to collect sales tax in my state the tax benefit is gone (or not always reliable).
I also use Amazon since I can use their rewards program thru my credit card.
Further, eBay is a decent fall-back site for products, since there are many vendors that sell new items on eBay. For example there was a Blu-Ray I wanted to buy but it was too expensive from the Amazon vendors. But I was able to find it $5 cheaper through eBay. Ironically the vendor on eBay was Buy.com (big Amazon competitor).
I do the exact same – AMZN, then ebay then finally Google.
What will be interesting is when AMZN finally does charge sales tax, will the states then go after ebay?
Yeah, with eBay it might be tricky on taxes. What about an individual selling the item? Do the states have to force eBay to collect sales tax on the product? Or is the individual seller responsible for collecting tax at check-out?