Finally it appears that a company is putting the tools and infrastructure together in order to create a marketplace that will be able to compete against Amazon.
That company is Shopify and that marketplace should consist of hundreds of thousands of small to large companies essentially selling their products direct to the end consumer on the Shopify marketplace.
Imagine having the option of buying everything you need from Amazon or Walmart, OR direct from a small business.
Which would you choose?
Right now, you choose to purchase on Amazon because of free next day shipping and the fact that you can get get anything you want in 1 transaction. Basically it’s easy and fast.
Hopefully in the near future we will have a new option that is easy, fast and benefits the merchant and not the big company.
Right now, almost everyone with a product is selling direct to consumer via an eCommerce site AND on Amazon. Typically Amazon volume far surpasses the direct to consumer volume, so people like me put up with Amazon and pay the fees and jump though the hoops that it takes in order to sell to this pool of Amazon Prime customers.
When an Amazon customer makes a purchase, my product that is stored in one of the many FBA warehouses is picked, packed and shipping in an Amazon smily face box, typically with no packing slip or anything that will link the product back to my company.
As a merchant I am given as little information as possible from Amazon about this customer that just bought my product. Mostly, because this is NOT my customer. It’s an Amazon customer. This customer is not allowed on my email list, in fact I don't even get access to the customers email address. The customer will likely not even remember who the merchant they bought from while shopping on Amazon.
Right now I can sell my product on my eCommerce site without any issues. But in order for a customer to find me I need to spend thousands of dollars on advertising and search engine optimization in order to get that customer to my tiny website to buy one of my products.
Let’s say I buy 7 items per month online. In order to shop direct with the small business, I would need to go to Google and search for the product I am looking for. Then sort through all the Google ads, Amazon & Walmart SERPS and find the small business that actually makes the product that I am looking for. Next I need to navigate the website add the item to the cart, create a login, pull out my credit card and make the purchase.
Wonderful, now I feel good about shopping direct with the small merchant and NOT Amazon. Oh.. Wait… I need to do that 6 more times to complete my shopping for the month. The problem, It takes time and it’s not easy and fast.
Most people will not take the time to do this and they will end up on Amazon buying everything with Amazon Prime and not even knowing or caring who the third party seller of the item really is.
The Shopify Marketplace.
I am not even sure if Shopify is planning on doing this or not, but I sure hope so. Here are the tools that they are putting in place in order to make this happen very soon. I think all these will be requirements in order to be in this hypothetical Shopify Marketplace.
- Shopify Pay. Shopify Pay is a payment gateway to allow merchants to accept credit cards. Nobody really cares about this right now, because you can process cards through many different merchant accounts like PayPal, Authorize.net, CyberSource or any other merchant provider. The key to Shopify Payments that’s makes this different is IF and only IF you are using Shopify Payments you can allow the customer to save their payment information with Shopify and use this payment information on any other Shopify website that accepts Shopify Payments. This allows customers to checkout faster and not have to get up from the couch to find that credit card, because it is stored on the account along with Billing and Shipping information. So essentially this makes it fast and easy to checkout on any Shopify website. This will be requirement number one.
- Shopify Fulfillment Network. SFN as they call it is a series of fulfillment centers that Shopify will either own or partner with to store products throughout North American and eventually the World. I have one of my products in SFN already and it takes the strain off my warehouse staff. When an order comes in for this item, SFN will pick, pack and ship this item for me. All the information is still in my Shopify account like tracking numbers, status etc… Plus Shopify has more shipping volume with the shipping carriers, so they get better shipping rates. My price to have SFN do the work is less than what I could do for it myself. Here is where SFN gets interesting. All these fulfillment centers will use what they call smart inventory-allocation technology that is powered by machine learning to predict where in the Country your orders will come from and then allocate inventory in the network accordingly. Basically you can ship your products to SFN and they will scatter them throughout the Country so they are closer to the end user that is eventually going to buy your product. The closer your product is to the customer, means faster and cheaper shipping. Faster and cheaper means we are one step closer to providing what Amazon already does.
- The Shopify Marketplace. A marketplace that will offer FAST guaranteed shipping, because all the product will be scattered around the World in SFN warehouses ready to get shipped to the customer immediately.
The Shopify Marketplace is not completed yet or even announced yet, but it exists in my mind and I want to see this built. It appears that the tools Shopify is putting in place right now are showing signs of the ability for a Shopify Marketplace in the future.
What is a Shopify Marketplace?
The Shopify Marketplace will be an Amazon like site that consist of products from hundreds of thousands of Shopify merchants all available for search, discovery and purchase through a single checkout. Basically just like amazon. If multiple items from different merchants are ordered at once, great! SFN will box all the items up and ship them out to the customer. Oh… btw.. SFN allows you to use your own custom packaging, so you can specify that your items are shipping with your branding if you want.
How will this work for the merchant? I would think that this would be a sales channel inside Shopify. I envision a checkbox under Sales Channel called Shopify Marketplace that will open up a series of options for the product. These options will allow you to categorize the product on the marketplace. Very similar to how to categories a product on Amazon right now. Once the item is in the Shopify sales channel it will be listed for sale alongside all the other merchants products in the marketplace. Eventually I envision millions of products in a huge Amazon style site that will benefit the shoppers and the great companies that build these products instead of the Amazon's and Walmarts of the world.
Let me know your thoughts.